The words of property, explained simply.
Sale agreement, notarial deed, charges, energy class: the vocabulary of buying, renting or selling in Luxembourg, without the jargon.
50 terms explained simply
- Financing
3% housing VAT
The 3% housing VAT is a super-reduced rate applied to the construction or renovation of a home used as a main residence, instead of the standard 17% rate.
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Agency commission
The agency commission is the estate agent's fee when a sale or a letting succeeds thanks to their work.
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Bëllegen Akt
The Bëllegen Akt is a tax credit that reduces, or even cancels, the registration and transcription duties due when buying your main residence in Luxembourg.
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Bridging loan
A bridging loan is a short-term loan that lets you buy a new property before selling your current one, by advancing all or part of its sale price.
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Building lease right
The building lease right (droit de superficie) allows someone to own buildings constructed on land that belongs to someone else.
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Building permit
The building permit (autorisation de bâtir) is issued by the mayor and authorises a construction, an extension or certain alterations to a building.
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Cadastre
The cadastre is the public register describing every plot of land: its location, area and number.
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Capital gain on property
A capital gain on property is the profit made by selling a property for more than it cost, purchase costs and works included.
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Co-ownership
Co-ownership is how a building shared by several owners is organised: each owns a private unit and a share of the common parts.
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Co-ownership regulations
The co-ownership regulations set the rules by which a building runs: use of the units, use of the common parts, split of charges.
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Completion guarantee
The completion guarantee assures the buyer of an off-plan home that the construction will be finished, even if the developer runs into difficulty.
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Condition precedent
A condition precedent is a clause that makes the sale depend on a future event: if it does not happen, the sale falls through without penalty.
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Debt-to-income ratio
The debt-to-income ratio is the share of the household's net income spent each month on repaying its loans.
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Detailed development plan (PAP)
The detailed development plan, or PAP (plan d'aménagement particulier), sets out precisely what can be built on a neighbourhood or group of plots, within the framework of the PAG.
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Down payment
The down payment is the money the buyer puts into the purchase from their own funds, without borrowing it: savings, a gift, the proceeds of a sale.
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Emphyteutic lease
An emphyteutic lease is a long-term right to occupy and build on someone else's land, in exchange for a ground rent.
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Energy passport
The energy passport, or energy performance certificate (CPE), is the official document that rates a home on its energy consumption and thermal insulation.
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Energy performance class
The energy performance class rates the energy performance of a home, from A (very efficient) to I (poorly performing), according to its consumption and the building's insulation.
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Exclusive mandate
An exclusive mandate entrusts the sale of a property to a single agency for an agreed period.
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Fixed rate
A fixed-rate loan keeps the same interest rate for its whole term, or for an agreed period: the monthly payment does not change.
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Flatshare
A flatshare is the letting of a single home to several tenants, who share the common rooms and each have their own bedroom.
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General development plan (PAG)
The general development plan, or PAG (plan d'aménagement général), is each municipality's zoning document: it divides its territory into zones and sets what may be built there.
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Housing aid
Housing aid covers the grants, subsidies and guarantees the Luxembourg State offers to help people buy, build or renovate their main residence.
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Inventory and condition report
The inventory and condition report (état des lieux) describes the condition of a rented home, room by room, when the tenant moves in and again when they move out.
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Klimabonus
Klimabonus is the Luxembourg State's aid programme for the energy renovation of homes and the use of renewable energy.
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Living area
The living area is the floor area of the rooms in a home that can actually be lived in, measured inside the walls.
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Loan-to-value (LTV)
Loan-to-value, or LTV, is the share of the property price financed by the loan: an LTV of 90% means the bank lends 90% of the property's value.
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Managing agent (syndic)
The managing agent is the person or company appointed by the co-owners to administer the common areas of a building and to carry out the decisions of the general meeting.
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Market value
Market value is the price at which a property could reasonably sell on the market at a given date, between a willing, informed seller and buyer.
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Mortgage
A mortgage is the security the bank takes over the financed property: if the borrower stops repaying the loan, the bank can have the property sold to recover what it is owed.
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Mortgage life insurance
Mortgage life insurance (assurance solde restant dû) repays the outstanding capital of the home loan if the borrower dies before the end of the loan.
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Mortgage release
A mortgage release (mainlevée) is the deed by which the bank gives up its mortgage, once the loan has been repaid or when the property is sold.
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Notarial deed (acte authentique)
The acte authentique is the legal document signed before a notary that formalises and transfers ownership of a property from seller to buyer.
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Notary
The notary is the public officer responsible, in Luxembourg, for drawing up and authenticating property sale deeds, guaranteeing the legal security of the transaction.
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Notary fees
Notary fees bring together the registration duties, the notary's own fees and the incidental costs payable when buying a property.
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Notice period
The notice period is the time that must elapse between announcing the end of the lease and the tenant actually leaving.
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Off-plan sale (VEFA)
An off-plan sale (VEFA, vente en état futur d'achèvement) is the purchase of a home that has not yet been built: the buyer becomes the owner as construction progresses.
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Preliminary sales agreement (compromis de vente)
The compromis de vente is the written agreement by which buyer and seller commit to each other on the sale of a property, before the notarial deed is signed at the notary's office.
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Purchase offer
A purchase offer is the written proposal in which a buyer tells the seller the price they are willing to pay for a property, and on what conditions.
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Registration and transcription duties
Registration and transcription duties are the taxes levied by the State when a property is bought: 6% for registration and 1% for transcription in the land register.
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Rent adjustment
A rent adjustment is a revision of the rent during the lease, which Luxembourg law limits in frequency and amount.
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Rent cap
In Luxembourg, the annual rent of a home may not exceed 5% of the capital invested in it.
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Rent commission
The rent commission is the local body that settles, free of charge, disagreements between landlords and tenants over the amount of rent and charges.
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Rental deposit
The rental deposit is a sum paid by the tenant to the landlord when the lease is signed, intended to cover any failings (unpaid rent, damage) at the end of the tenancy.
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Residential lease (bail à loyer)
The bail à loyer is the tenancy agreement by which a landlord makes a property available to a tenant in exchange for rent, for a fixed term.
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Right of pre-emption
A right of pre-emption allows a person or a public body to acquire a property as a matter of priority, ahead of any other buyer, when it is put up for sale.
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Sale mandate
A sale mandate is the contract by which an owner instructs an agency to sell their property, setting the price, the duration and the agency's fee.
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Service charges
Service charges are the costs linked to the day-to-day use of a rented home (upkeep of the common areas, water, communal heating, etc.) passed on to the tenant in addition to the rent.
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Share (thousandths)
The share, expressed in thousandths, is the portion of a building's common parts attached to each co-ownership unit.
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Variable rate
A variable-rate loan has an interest rate that moves with a market benchmark, usually Euribor: the monthly payment can rise or fall.
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