The Property Banks Buyers Guide to Luxembourg
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.
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.
There are no restrictions on Foreign Ownership.
Property and Real Estate Prices in Luxembourg
Range Varies, for example:
From around £100,000 / $145,000 for a villa / house
Locations to buy property and real estate in Luxembourg
Luxembourg-City and its immediate surrounds represent nearly a
quarter of the population of Luxembourg.
Oesling, in the north is part of the Ardennes, an area of scenic
beauty with large wooded sectors.
Mosselle is the wine producing part of Luxembourg situated in the
centre and south.
Living Costs in Luxembourg
Living standards are high in Luxembourg with a home ownership rate
of over 65%.
The general cost of living would be slightly less compared to the
United Kingdom.
Luxury goods, like cars, compared again to the United Kingdom, would
be less expensive.
Fuel prices are set by the government and tend to be cheaper than
neighbouring countries.
Buying real estate in Luxembourg
When you have found the right property for you, a written contract,
or "sales agreement" is used to conclude a buyer/seller agreement,
which is also governed by the law. Oral contracts to bind both
parties are also accepted. Please note that it can be notoriously
difficult to find a home for sale in Luxembourg due to population
and demand, with "for sale boards" not being widely used. "Word of
mouth" can be an advantage! 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.
Solicitor / Lawyer
A solicitor/lawyer or notary should be used to draw written contacts
for submission to the public notary.
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%).
Property Tax
Tax is payable for municipal services and vary between 0.7-1% per
annum but can be multiplied for various co-efficients based on the
official value of the property. Net wealth tax at a rate of 0.5% can
also be levied annually.
Mortgages
Luxembourg is a 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.