The keys to understanding property better.

The costs, the support schemes and the steps, from preliminary contract to deed.

• Purchase costs

  In Luxembourg, the duties payable on the purchase of a property generally amount to 7% of the purchase price, plus the notary’s fees. When buying a main residence, the Bëllegen Akt can reduce a significant part of these duties.

  The essentials

  • Registration duty: 6% of the purchase price.
  • Transcription duty: 1% of the purchase price.
  • Notary’s fees: calculated according to a regulated scale, plus VAT.
  • For a main residence, the Bëllegen Akt can reduce the registration and transcription duties.

  The team's advice

  Factor these costs in as soon as you work out your personal contribution. Our notary fees calculator gives you a quick first estimate of the budget you will need.

• The Bëllegen Akt

  The Bëllegen Akt is a tax credit that reduces the registration and transcription duties when you buy a home that is to become your main residence in Luxembourg.

  The essentials

  • Up to €40,000 per buyer, subject to the conditions of the scheme.
  • When two people buy together, each buyer can benefit from their own tax credit if they meet the conditions.
  • The home must be intended for personal and actual occupation as a main residence.
  • In particular, the buyer must live in the home for at least 2 consecutive years, within the time limits set by the scheme.
  • The application is made by the notary when the notarial deed is signed.

  The team's advice

  Make it clear from the start of your project that you wish to benefit from the Bëllegen Akt. The notary can then check your situation and include the tax credit when calculating the duties payable.

• Super-reduced 3% VAT

  Under certain conditions, the construction or renovation of a home used as a main residence can benefit from the super-reduced VAT rate of 3% instead of the standard rate. The tax advantage is capped per home.

  The essentials

  • The super-reduced rate of 3% may apply to certain construction and renovation works on a home used as a main residence.
  • The total tax advantage is limited to €50,000 per home.
  • To have the 3% rate applied directly on invoices, prior approval from the AED is required.
  • Where the standard rate has been invoiced for eligible works, it may also be possible, under certain conditions, to apply for a refund of the difference.

  The team's advice

  Start the process before the works begin. If you want the 3% rate applied directly on invoices, make sure the AED approval has been obtained.

• Home ownership grant

  The home ownership grant (prime d’accession à la propriété) is a state financial aid intended, under certain conditions, for households buying or building their main residence in Luxembourg with a mortgage loan. Its amount depends in particular on income and the composition of the household.

  The essentials

  • The grant ranges from €500 to €10,000, depending on income and household composition.
  • The home must become your main and permanent residence.
  • You must have taken out a mortgage loan to finance the purchase or construction.
  • The grant is increased by 40% for a flat in a co-owned building or a terraced house, and by 15% for a semi-detached house.
  • The application must be submitted within 1 year of the notarial deed or, for a new build, of the declared start of works.

  The team's advice

  Do not count this grant as funds available before the purchase. Check your eligibility as soon as you start preparing your financing, so you know which aids your project may qualify for.

• Interest subsidy

  The interest subsidy is a state aid designed to reduce the monthly cost of a mortgage loan taken out to buy, build or improve a home used as a main and permanent residence. Its amount depends in particular on income and the composition of the household.

  The essentials

  • The subsidy rate can range from 0.25% to 3.50%, depending on income and the composition of the household.
  • The calculation takes into account a mortgage loan of up to €200,000, increased by €20,000 per dependent child, up to a limit of €280,000.
  • The home must be your main and permanent residence.
  • The loan must have been taken out to buy, build or improve a home located in Luxembourg.
  • The aid is subject to several conditions, notably regarding income, ownership and financing.

  The team's advice

  Remember to check your eligibility as soon as you start preparing your financing. An interest subsidy can significantly reduce the monthly cost of your mortgage over its term.

• State guarantee

  Where the personal guarantees required by the bank are insufficient, the State may, under certain conditions, guarantee part of the mortgage loan taken out to buy, build or renovate your main residence. This scheme can make financing easier to obtain when your deposit or available guarantees are not enough to meet the bank’s requirements.

  The essentials

  • The guarantee can be up to €303,862, according to the legal value currently applicable.
  • The guarantee cannot exceed 40% of the cost of the property project.
  • The financed home must become your main and permanent residence.
  • The loan must finance at least 60% of the project cost and be granted by a financial institution that has an agreement with the State.
  • Among other things, regular savings over at least 3 years are required.
  • The application is submitted by the lending institution on your behalf, jointly with you.

  The team's advice

  If your deposit or personal guarantees are limited, raise this option with your bank at the very start of your project. It can check your eligibility and submit the application with you.

• The preliminary sale agreement

  The preliminary sale agreement (compromis de vente) is a legal commitment between the buyer and the seller, signed before the final notarial deed. It sets out the main terms of the transaction and must state all the essential elements of the sale precisely.

  The essentials

  • The agreement specifies, among other things, the sale price, the property concerned, the deadlines and any conditions precedent.
  • The condition precedent of obtaining a loan is particularly important when the buyer is financing the purchase with a mortgage.
  • A deposit may be paid on signing, according to the terms agreed between the parties.
  • If a condition precedent set out in the agreement is not fulfilled under the stipulated terms, the sale may fall through without the buyer necessarily being penalised.
  • Outside the cases provided for in the contract or by law, withdrawing may trigger a penalty clause or other contractual consequences.

  The team's advice

  Take the time to check every clause before signing, especially the conditions relating to financing, deadlines and any works or documents still outstanding. A well-drafted agreement secures the rest of the transaction.

• Off-plan sale (VEFA)

  An off-plan sale (vente en l’état futur d’achèvement, VEFA) allows you to buy a home before it is built or while construction is under way. The buyer gradually becomes the owner of the property as it is built, while payments follow the progress of the works.

  The essentials

  • The price is generally paid in instalments, according to the progress of construction.
  • The developer must provide the guarantees required by the regulations, notably completion or refund guarantees.
  • The plans, specifications, materials and features of the home must be precisely defined in the contractual documents.
  • At handover, the buyer must report any defects, poor workmanship or non-compliant elements so that they can be remedied.
  • After handover, various warranties may apply depending on the nature of the works and the defects found.

  The team's advice

  At handover, take the time to inspect the home carefully and record every reservation in writing. For a major purchase, it can be useful to be accompanied by a professional so that nothing is overlooked.

• The steps of a purchase

  From setting your budget to receiving the keys, buying a property involves several main stages. Financing generally plays a central role in the timetable of the transaction.

  The essentials

  • Confirming your budget and borrowing capacity before you start viewing lets you target suitable properties and make credible offers.
  • Once you have found the property, you can make a written offer and then sign the preliminary sale agreement, including any conditions precedent.
  • If the purchase is financed by a loan, you then need to obtain the bank’s approval within the deadline set in the preliminary agreement.
  • The notary then prepares the file for the signing of the authentic deed.
  • On the day of the deed, the balance of the price is paid and the buyer officially becomes the owner of the property.

  The team's advice

  Allow enough leeway in the financing deadlines and send the documents requested by the bank and the notary promptly. Good preparation avoids most delays between the preliminary agreement and the final signing.