Property purchase costs

Property acquisition costs Luxembourg

Are you a resident or future expatriate in Luxembourg looking to buy a property? How much will the purchase cost you in the end? Are you wondering about the cost of notary fees, registration fees and mortgages?

Here you'll find answers to all your questions about the costs involved in buying a new property. This will help you plan the purchase of your dream home in Luxembourg.

Notary fees on a property purchase in Luxembourg

When buying real estate in Luxembourg, additional financial costs, known as "Frais de notaire", must be taken into account in addition to the sale price of the home or land. On the day the deed of sale is signed at the notary's office, the buyer must pay the notary additional fees.

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

Calculate below the notary fees you need to factor into your total budget for the purchase of your new property.

Reduced registration fees and Bëllegen Akt

Luxembourg registration fees

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

"Bëllegen Akt", tax credit for a principal residence

However, thanks to the "Bellegen Akt", the new buyer can benefit from a tax credit on these registration fees. From January 1, 2024, these fees can be reduced by up to 40,000 euros per head, or 80,000 euros for a couple.

Previously 20,000 euros, then 30,000 euros, this new tax break demonstrates the government's determination to revitalize the real estate sector, which has been suffering since 2023.

These reduced registration fees are reserved for individuals purchasing a property in Luxembourg for the first time as their principal residence. To qualify, the new buyer must commit to living in the property for at least 2 years. If the property is rented out or resold before the 2 years have elapsed, the purchaser must repay the full amount of the reduction granted.

If the entire envelope per person is not used for the first purchase of a principal residence, the remainder can be used for a subsequent purchase until the derogatory tax provision expires.

Reducing notary fees on a rental property investment

A new "Bëllegen Akt Investisseurs" tax credit has been introduced to boost investment in new-build property in 2024. It enables VEFA rental investors to benefit from a reduction in notary fees of up to 20,000 euros per person. To qualify, the investor must rent the property for at least 2 years. This measure applies retroactively to all purchases made on or after January 1, 2024.

Notary's fees for a real estate deed of sale

The sale of a property in Luxembourg must be sealed before a notary. A Grand-Ducal regulation sets the notary's fees for completing the transaction.

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

In addition, the notary also invoices the costs incurred by his office to complete the real estate transaction. This is because the notary's office has had to request cadastral extracts and collect all the other administrative documents required to complete the sale. These include, in particular, statements of account from condominium managers, mortgage statements, etc. ....

To estimate the registration fees and notary's fees you'll have to pay when you take possession of your property, you can use our notary's fees calculator below.

VAT on goods in future state of completion

In Luxembourg, when you buy a property in a future state of completion (VEFA), you must pay value-added tax (VAT) on the property to be built.

The VAT rate applied depends on the buyer's status.

VAT on the purchase of a principal residence

If the buyer is acquiring a property (apartment or house) for use as his orher own principal residence, he or she 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 tax concession is limited to a maximum of 50,000 euros. Beyond that, the notary will apply a 17% tax.

VAT on the purchase of rental property in Luxembourg

An investor who buys a property in a future state of completion with a view to renting it out will not be able to benefit from this tax break. They will automatically pay 17% VAT on the entire property, which has yet to be built.

Please note that the prices advertised by developers for new buildings generally include 3% VAT. The investor will have to recalculate the final price with VAT at 17%.

The same principle applies when you renovate your principal residence .

Cost of a mortgage to buy a home

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

Cost of borrowing to finance your new property

If you can't finance your entire property purchase from your own funds, you can apply for financing from a bank or financial institution. After examining your personal file and your ability to repay, the bank will lend you a certain sum to help finance your purchase. Generally speaking, a bank will lend you up to a maximum of 30% of your income.

In return, you'll have to make monthly repayments, taking into accountinterest charges to be added to the principal repaid.

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

You'll need to take these costs into account when calculating the total cost of your property purchase. However, you should know that you can benefit from tax deductions on these costs when purchasing your principal residence.

Mortgage fees for bank guarantees

By lending the sum requested to finance a property purchase, the bank aims to ensure its repayment. To this end, the lender also takes out a mortgage on the property in question.

This mortgage guarantees the bank repayment of its loan in the event of default by the borrower.

If you have a Luxembourg life insurance policy, you can pledge it as collateral for your mortgage.

On the day of the sale, the notary draws up the mortgage deed at the same time as the loan deed. This additional guarantee is registered at the Bureau des Hypothèques.

These mortgage fees will be added to the costs payable to the notary. The amount of the mortgage loan granted determines the amount of these fees.

If the property is sold before the loan matures, or if the loan is repaid early, the Bank will lift the mortgage with the Mortgage Office. This may result in new mortgage costs.

Would you like to take out a loan to finance your new property purchase? Ask your bank. 

Outstanding balance insurance and death and disability insurance

To guarantee repayment in the event of death or disability, the bank will probably ask you to take out death/disability insurance. This is calculated on the outstanding principal.

This will cover repayment of the loan in the event of death or disability of the buyer(s) before the end of the loan term. We advise you to take out this insurance. Ask your bank for details.

Under certain conditions, these insurance premiums can be deducted from your income for tax purposes.

On the websites of the various Luxembourg banks, you'll find a simulator that allows you to easily calculate the cost of your mortgage. This cost is calculated on the basis of the total amount of your property purchase project and your personal contribution. You can also calculate the monthly instalments you'll have to pay, depending on the loan you've taken out.

Other tools to calculate the cost of your real estate project

On the website, in the "Tools" section, you'll find a number of tools for calculating your property acquisition project: costs and monthly acquisition charges . You'll also be able to assess whether it's better to sell or rent your home, and how much property you can afford to buy based on your income.

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