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.

The 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 Luxembourg.

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.  

Sales 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.

A solicitor/lawyer or notary should be used to draw written contacts for submission to the public notary.

 

Registration: 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 of signing.

 

 

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%)

 

Annual Taxes: 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.

 

Loans/Mortgages: 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.

 

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Disclaimer: This guide is for information only and should not be relied upon as definitive. Details have been obtained from various sources and although we have done everything possible to ensure that it is correct, we cannot accept responsibility for it or guarantee its accuracy. This is because processes and laws change frequently, and may also vary dependant upon personal circumstances. You are welcome to use the information provided, but should always obtain confirmation of specific details and get independent specialist and legal advice in the country that the information refers to.

20-10-2009