Several expenses are directly linked to the purchase of a property. These must be taken into account in the budget, especially when taking out a mortgage. Here are the details.

Notary fees

The notary's fees include all the costs associated with a property purchase, paid to the notary.

Taxes due to the tax authorities

• Registration and transcription fees

The standard rate for the acquisition of a building (house, flat, building land) for consideration is 7%, of which 6% is registration duty and 1% is transcription duty, calculated on the price of the land and any buildings that may have been built.

• Registration fees

There are several cases depending on the place of residence and the use of the property purchased:

• A purchaser domiciled in Luxembourg and intending to live in the building himself is entitled to registration and transcription duties at the flat rate of €100 if these duties - i.e. 7 % calculated on the amount of the land and any constructions carried out - do not exceed the tax credit of €20,000 granted per person (see below point D. Bellegenakt) ;
• A purchaser who is not domiciled in Luxembourg and who intends to live in the property himself will have to pay the registration and transcription fees in advance, but will be able to recover them later by sending the notary a certificate of residence proving that he is indeed domiciled in the property acquired;
• The purchaser who plans to rent out his flat does not benefit from a tax credit and will have to pay the full registration and transcription fees, i.e. 7 % calculated on the amount of the land and any constructions carried out.

Notary's expenses

This amount corresponds to the reimbursement of any costs incurred by the notary in relation to the property acquisition, for example costs relating to the request for cadastral extracts, obtaining certain administrative documents from the co-ownership syndicate, administrations, etc.

Notary fees and emoluments

This is the notary's remuneration, set by grand-ducal regulation. It corresponds to approximately 1 % of the price of the land and any buildings that may have been built.

Mortgage fees

It is a real security interest in real property that guarantees the repayment of the amount borrowed.

The notary is responsible for drawing up the conventional mortgage deed, which entails notary fees that must be taken into account.

In order for the mortgage to be enforceable against third parties (i.e. potential creditors of the future owner), it must be registered in one of the mortgage offices in Luxembourg.

For example: for a property purchased for €400,000, the mortgage costs (registration and recording costs and notary's fees) will be approximately €2,700.

If the property is sold before the end of the mortgage period, the seller must obtain the release of this mortgage. This formality requires a new notarial deed and therefore additional costs.

Outstanding balance insurance

The credit institution usually requires a outstanding balance insurance which covers the balance to be repaid in the event of the borrower's premature death.

"Bëllegen Akt" or tax credit

In order to reduce the ancillary costs of acquiring a home, the government has introduced an allowance, known as a tax credit, on registration and transcription fees (also known as "Bëllegen Akt") for purchasers of real estate for personal habitation.

This tax credit is limited to €20,000 per purchaser. For a couple, this amount is doubled.

The Registration and Domain Administration will in any case charge a minimum of €100 as registration fee.

The purchaser must effectively and personally occupy the dwelling within a period of 2 years from the date of the notarised deed of acquisition and must undertake to occupy the building for an uninterrupted period of at least 2 years for buildings acquired after 1 January 2008.

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