Tips on successfully buying real estate in Luxembourg

You have surely noticed that the real estate market in Luxembourg is going really fast. Every new property on the market gets sold immediately. The increase in demand requires reactivity if you really want to become a property owner.

Fortunately, there are a few tips to optimize your search and speed up your purchase.

1. Optimizing your real estate search time

Finding an apartment or a house is really time consuming. Everyone knows how lost you can get when you’re faced with hundreds of properties to check one by one.

To optimize your time, concentrate your search where you have the best chance of finding a high number of properties matching your criteria. Here is how:

• Set-up an alert system: create an account on atHome.lu, save your searches, and get notified by email everytime a new ad matches your search criteria.
• Want to go even faster? Download the app: you will be able to activate the notifications directly on your smartphone and get notified at any time and wherever you are. You will be among the first to respond to new listings on atHome.

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2. Preparing a solid checklist for your visits

As the real estate market is quite competitive, you need to analyse properties quickly. Go with a funnel-analysis technique: check the most general points (direct environment of housing, equipment of the property, external environment…), then focus on the more detailed ones (energy consumption, pipes, traces of moisture, taps…). If you stumble on a huge red flag on the general points, drop the property, and move on to the next.

Here is some advice for your own checklist:

• Check the direct environment of the property: it is always essential to visit the property to get a real idea of the setting you are looking for. You might love it on paper. But with a real visit, you will instantly know if the property and the area fit your lifestyle.
• Pay attention to the equipment of the property: kitchen equipment (fridge, dishwasher, oven, stove, cupboards… is it included in the sale?), heating, floor or wall coverings, storage space and many other things. If the quality isn’t good enough, prepare a budget for renovation work.
• Don’t be afraid to ask questions: ask about the windows and doors: is the insulation of good quality? But also about the Internet connection? Also, never forget to ask about the charges (electricity, gas, condominium fees) : because you will have to pay those monthly fees.

Finally : take pictures. A lot of them. You need to be able to review any details you might have missed during the visit. But remember to ask for permission before taking pictures

3. Anticipate the need for a mortgage

Just like with visits, you need to prepare your mortgage beforehand. Here is how:

Optimize your budget and your loan with a broker:

The best way to anticipate and optimize your financing is to meet with a broker. Not only you get access to special loan conditions and terms that you wouldn’t get otherwise, but you can also be coached in your project. The loan broker will help you optimize your mortgage to pay as less fees as possible.

Here are some benefits of going with a mortgage broker

• It’s time saving: you won’t have to investigate rates and conditions, nor meeting with every bank in town. The broker will take care of it for you, for free.
• You get advice: brokers will get you the best plan for your finances, and will help you optimise every component of your mortgage (rate, duration, contribution, insurance fees…).
• Flexibility: you can discuss your project at anytime – see them as personal financial coaches!

Getting a financial capacity certificate?

In Luxembourg, you can get dozens, even hundreds of candidates for a single property. Properties are often sold really fast. You need an advantage to stand out from the competition.

To make a really good impression, you can get a financial capacity certificate (called “Finance Check”). This certificate will reassure sellers and realtors: they will be more enclined to sell the property to you, instead of saving it for your competitors.

With atHomeFinance brokers, you can get a Finance Check for free! Just make a simulation and ask for an appointment.

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4. Optimizing your tax return when buying a property in Luxembourg

Investing in real estate pays off, even if it’s your first purchase! In Luxembourg, you can deduct your loan’s interests from your tax return – this will help you save up to a couple thousand euros per year!

To know more about the conditions, read this article.

How do you deduct interest?

In order to declare your loan on your tax return you need to go to taxx.lu, create an account, and following the onboarding tutorial. When declaring your taxes, you will be able to check the appropriate box in the “Real estate” category.

If you move into your property during the year, all you have to do is enter the move-in date on taxx.lu. The system will then automatically calculate the deductible amount for the Luxembourg tax return, according to the pro rata rule.

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