REGISTRATION FEES WHEN PURCHASING A BUILDING IN LUXEMBOURG
Regular registration and transcription fees: 7%
Registration and transcription fees with resale clause: 8.2%
Sales of built and unbuilt properties are subject to a proportional registration fee of 6%, as well as a transcription fee of 1%. The calculations are based on the value of the property. When the building is destined for personal, and not commercial use, it is not subject to the municipal surcharge applicable within the territory of the City of Luxembourg (equivalent to 50% of the proportional registration fee). As a result, the property rights amount to 7% for private-use properties located throughout the territory of the Grand Duchy and 10% for commercial properties located within Luxembourg City. In the absence of any provision to the contrary in the deed of sale, the registration fees are borne by the purchaser.
Purchase for resale: Special transcription fees are foreseen for the standard re-selling of properties. The property must, however, be resold within a strict time frame. Thus, when the purchaser declares in the deed of sale that they are buying the property in order to re-sell, the initial registration fee of 6% increases to 7.2%. The transcription fee remains unchanged at 1%. In the case of a purchase with a planned short-term sale, the purchaser is entitled to a partial refund of the registration fee of 7.2%, depending on the date of registration of the resale act. The refund is 6% when the resale act is registered within 2 years of the first sale and 4.8% when the act is registered between 2 and 4 years following the initial sale. This is only applicable in the event of a purchase with a strict plan for resale. Indeed, a purchase followed by an operation other than a sale (e.g. exchange) is not eligible for reimbursement of registration fees.
Principle of tax credit:
Each person residing in one of the countries of the European Economic Area (EU Member States, Iceland, Liechtenstein and Norway) is entitled to a tax deduction of up to € 20,000 per person, or € 40,000 in the case of a couple, without the registration fee being less than € 100. This abatement can be used during one or more purchases.
Living in the purchased property.
Moving and registering with the commune where the property is located, and residing in this same property for 2 years following the date of purchase in the case of an existing property, or 4 years when purchasing a building plot or a property under construction.
If you need advice regarding real estate purchases or sales, just get in touch!