Luxembourg is situated between Belgium, Germany and France and is also
known as the "Grand Duchy of Luxembourg", an independent sovereign
state. Despite a small population it has become an important
international financial centre and acts as the capital for European
monetary policy with foreign residents representing over 30% of the
population of Luxembourg.
official language is "Luxembourgish", French, German and some English is
also widely fluent.
Luxembourg in the EU including links to Luxembourg government sites
and Tourist Information
You should give very careful
consideration as to if you are better off buying or renting property in
If you are planning to live there
for less than five years, then you are probably better off renting.
Owning your own home is not considered an important an investment as it
is in most other countries. Property prices ‘boomed’ in the late ’80s
and early ’90s, but property increases have slowed and the high transfer
(conveyance) costs discourage home ownership as an investment. The tax
benefits of home ownership vary greatly.
The process of buying a home in
Luxembourg is similar to the UK system, except that in common with most
other European countries you must use a notary to transfer the title
once an agreement has been reached on the price.
It cab be notoriously difficult to
find a property in Luxembourg. ‘For Sale’ signs are very rarely
displayed outside property. Prices for houses are high, and many Luxembourgers prefer to buy a plot of land and build their own home.
Deposits for property purchases are around 25 per cent and estate
agents’ fees are high. There’s a 6 per cent transfer tax, and annual
property taxes range from less than 1 per cent to around 8 per cent of
the purchase price, depending on the commune.
Agreement: When you have
decided on a property a sales agreement is used to conclude a
buyer/seller agreement, which is governed by the law. Oral contracts by
both parties are also accepted.
solicitor/lawyer or notary should be used to
draw written contacts for submission to the public notary.
The property transaction is always registered and recorded in the
notary's deed. A public notary will present the sale deeds for recording
in this register. You would then be expected to pay duty within 15 days
Costs and Fees:
The cost of property registration would be 6%, with an additional 1%
transcript tax and is based on the acquisition price, which is expected
to be not lower than the market value. If you are to declare in the
purchase deed your intention to resell the property, the registration
tax would be raised to around 7.2%, however up to 5% can be recovered if
resale is registered within a four-year period (the taxes due within
Luxembourg City can be up to 50% more). V.A.T would not normally be
applicable (current rate 15%)
Tax is payable for municipal services and vary between 0.7-1% per annum
and is based on the official value of the property. Net wealth tax at a
rate of 0.5% can also be levied annually.
Capital Gains tax is chargeable at a maximum
rate of 37.5%, but if you pay local taxes and the sale is of your
principal home, you would normally be exempt.
Luxembourg is a
recognised financial stronghold with
many banks and institutions offering both local and international
services. Mortgages can be found over various repayment terms with 80%
and beyond being available. These can also be arranged for payment over
agreed periods, for instance 20-30 years.