Costs associated with purchasing real estate

Are you a resident or future expatriate in Luxembourg and looking to buy property there? How much will this purchase ultimately cost you? Do you have questions about notary fees, registration fees, and mortgage costs?

Here you will find all the answers to your questions about the costs involved in purchasing a new property. This will allow you to plan the purchase of your dream home in Luxembourg with peace of mind.

Notary fees on a real estate purchase in Luxembourg

When purchasing real estate in Luxembourg, additional financial costs, known as "notary fees" or "notarization fees," are to be expected in addition to the sale price of the home or land. On the day the purchase deed is signed at the notary's office, it is the buyer of the property who must pay these additional fees to the notary. The seller of the property does not contribute to these notary fees.

These registration fees amount to 7% of the price of the property. They consist of 6% registration fees and 1% transcription fees.

Calculate below the notary fees to be included in your total budget for the purchase of your new property.

Reduced registration fees and Bëllegen Akt

Registration fees in Luxembourg

When purchasing a property, the buyer must pay registration fees to the notary on the day of the sale. These are calculated on the value of the land and the buildings on it. These registrationfees amount to 6% of the purchase price of the property.

"Bëllegen Akt," tax credit for a primary residence

However, thanks to the "Bellegen Akt," the new buyer can benefit from a tax credit on these registration fees. Today, these fees can be reduced by up to €40,000 per person, or €80,000 for a couple.

These reduced registration fees are reserved for individuals purchasing real estate in Luxembourg to use as their primary residence. To benefit from this , the new buyer must commit to living in the property for at least two years. If the property is rented out or resold before these two years are up, the buyer will have to repay the entire reduction granted.

If the entire allowance per person is not used when purchasing the primary residence for the first time, the remainder may be used for a subsequent purchase until the special tax provision expires.

Reduction in notary fees on rental property investments

In order to boost investment in new real estate in 2024, a new tax credit called "Bëllegen Akt Investisseurs" has been introduced. It allows investors in off-plan properties to benefit from a reduction in notary fees of up to €20,000 per person. To qualify, investors must rent out the property for at least two years. This measure applies retroactively to all purchases made on or after January 1, 2024.

Notary fees for real estate sales

The sale of real estate in Luxembourg must be notarized. A Grand Ducal regulation sets the amount of the notary's fees for completing the transaction.

These fees are equivalent to 1% of the purchase price (land and buildings).

In addition, the notary also charges the costs incurred by their office in order to complete the real estate transaction. The notary's office has to request cadastral extracts and collect all the other administrative documents necessary to enable the sale. This includes account statements from co-ownership associations, any mortgage statements, etc.

To estimate the registration fees and notary fees you will have to pay when you sign the deed for your real estate purchase, you can use our notary fee calculator below.

VAT applicable to off-plan properties

In Luxembourg, when purchasing a property under construction (VEFA), the buyer must pay value added tax (VAT) on the property to be built.

The VAT rate applied depends on the status of the buyer.

VAT applicable to the purchase of a primary residence

If the buyer purchases a property (apartment or house) witha view to making it their personal primary residence, they will benefit from a reduced VAT rate of 3% on the part of the property still to be built at the time of purchase.

However, this benefit is limited to a tax benefit of €50,000. Above this amount, the notary will apply a rate of 17%.

VAT applicable to the purchase of rental property in Luxembourg

An investor who purchases a property off-plan with a view to renting it out will not be able to benefit from this tax benefit. They will automatically pay 17% VAT on the entire property still to be built.

Please note that the prices advertised by developers in real estate listings for new buildings generally include 3% VAT. Investors will need to recalculate the final price with 17% VAT.

The same principle applies when carrying out work on your main residence.

Cost of a mortgage to buy a home

When you take out a loan from a bank to finance your new property purchase, you will also have to pay financial costs. These are added to the overall cost of your purchase.

Cost of credit to finance your new property

If you are unable to finance your entire property purchase with your own funds, you can apply for financing from a bank or financial institution. After reviewing your personal file and your repayment capacity, the bank will lend you a certain amount so that you can finance your purchase. Generally, a bank will lend you up to 30% of your maximum income.

In return, you will have to make monthly repayments on your loan, taking intoaccount the interest to be added to the principal repaid.

You must also add the amount of the fixed application fees.

You will need to take these fees into account when calculating the total cost of purchasing your property. However, you should be aware that you can benefit from tax deductions on these fees when purchasing your primary residence.