How To Buy An Apartment In Luxembourg
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If you’re thinking of buying real estate in Luxembourg, make sure you know how the process differs from your home country, including the procedures and fees involved.
When moving to Luxembourg, you might consider buying somewhere to live. However, properties in Luxembourg can be very expensive, so it’s important to think carefully about whether buying a home is the right option for you and to do your research to ensure the numbers add up. Get started by reading this step-by-step advice on buying real estate, including what’s happening to the property market and tips on how to find a suitable home.
Buying a property in Luxembourg City
Luxembourg City is the most populated commune of Luxembourg, home to the country’s financial center and international schools.
The city is split into 24 districts. House prices are high across the board – this has been the case for a number of years. A Deloitte report in 2020 found that Luxembourg City was the second most costly place in Europe to buy a square meter of property after Paris.
Data from Immotop shows that the average house price in the city in early 2022 was €2.1 million, while the average cost of an apartment was €940,000. In some districts, such as Bel Air, you can expect to pay well above €1 million for an apartment. High prices in the capital are one of the main reasons workers buy homes over the border in neighboring countries.
Costs of buying real estate in Luxembourg
Buying a house in Luxembourg isn’t just about property price. You’ll also need to factor in some additional charges.
Registration fees are the biggest additional cost of buying a property in Luxembourg. Fees are charged on the overall value of the transaction. In total, you’ll pay 7% of the property price (a 6% registration fee and a 1% transcription fee).
This can be reduced, however. Buyers can get a tax credit of up to €20,000 (€40,000 for a couple). This is called the Bellegen Akt. To be eligible for the credit, you must commit to living in the property for at least two years and pay a €100 fee. The credit is available to legal residents and expats who aren’t yet residents but state an intention to remain in Luxembourg. If you rent or resell the property within two years, you’ll need to repay the credit.
If you buy a property intending to resell it, you need to pay higher registration fees of 7.2%. A proportion of the fee will be refunded if you sell the home within four years.
Homebuyers in Luxembourg usually pay for a notary (solicitor) who oversees the legal aspects of the transaction. Notary fees are enshrined in law and amount to 1.5% of the property’s price.
Estate agent fees
As a buyer, you won’t usually need to pay an estate agent fee in Luxembourg – this is the seller’s responsibility. In a competitive market, some buyers appoint their own agent to find them properties as soon as (or sometimes even before) they come on to the market. Naturally, you’ll need to pay if you want this kind of service. Estate agents must have a permit to operate in Luxembourg.
When you take out a mortgage in Luxembourg, you’ll usually need to pay mortgage fees. These can include application fees (to review and process your application), advance fees (to arrange for the money to be sent to you), and account handling charges (for the upkeep of your mortgage account). Rather than charging fees as separate lump sums, lenders generally build them into the rate of interest you pay on the mortgage.
If you buy a property with a mortgage, the lender will likely require you to take out payment insurance and buildings insurance as part of your contract. You can set these up in advance to come into force on the day you move into the property. Shop around before accepting insurance products offered by your mortgage lender. Contents insurance isn’t required by law, but you may wish to take out a policy to protect your belongings against theft or damage.
The process of buying real estate in Luxembourg
Viewing and choosing a property
You can view properties by setting up an appointment with the estate agent in charge of the sale.
The agent’s primary aim is to sell the property and get their commission, so make sure you do your own research on the property and create a checklist of key things to look out for and ask about during your viewing. Properties sell quickly in Luxembourg but don’t rush into making an offer on a home you’re not sure about.
Making an offer
When you’ve found a property you like, you can make an offer through the estate agent.
Once your offer has been accepted, you’ll need to sign a commitment to buy the property (compromis de vente). This is a legally binding document that confirms you’ll buy the home subject to your mortgage application being approved. If you pull out of the purchase for a different reason, you’ll need to pay a charge, usually 10% of the property price.
The compromis is an important part of buying a home in Luxembourg. Before signing, ensure that the seller has clearly stated exactly what is and is not included in the sale.
Paying the deposit
As we explained above, you’ll usually need a deposit of at least 10% of the property’s value to buy a home – though there are some instances where you can purchase a home with no deposit. You’ll need to ensure you have the necessary funds for the deposit before exchanging contracts.
Hiring a solicitor
The estate agent conducting the sale will usually recommend a solicitor or notary, but you are free to choose someone else. The same notary usually works for both parties involved in the transaction. The notary is responsible for dealing with the necessary paperwork and registering the change of ownership. You can find a list of notaries on the Chambre des Notaires website.
Arranging a survey
Before agreeing to buy a home, you might want to carry out an independent survey to ensure it has no significant flaws. You should do this before signing the compromis. There are many registered surveyors in Luxembourg – the Royal Institute of Chartered Surveyors provides a directory.
On the day you exchange contracts, you must visit the bank to verify you have the required funds to pay your deposit. The bank will provide you with a document confirming proof of funds and that you have a legal right to buy a property in Luxembourg.
Your notary will prepare the contract (based on the compromis) and agree a moving-out day with the vendor. This can sometimes be as long as six to eight weeks after the date you exchange contracts.
Completing the sale
Once the sale is complete, you’ll sign an acte de vente and exchange keys. Your notary will arrange for the funds to be transferred to the seller.
As soon as you move in, you’ll need to register your new address at the local commune. You can take your property contract as proof of residence and provide meter readings for utilities.
Moving into your property in Luxembourg
You’ll be responsible for local taxes, insurance, and utilities from the official day of completion.
When it comes to setting up your broadband, the more notice you provide, the better. Try to give one month’s notice to the provider, who will arrange for an engineer to visit the property soon after you’ve moved in. Electricity and gas supplies should continue without interruption, so you’ll just need to inform the providers that you’re the new owner.
You can either have new waste bins delivered or use those already at the property. If you keep the old ones, you’ll need to get a barcode for them from your local commune.
How much is an apartment in Luxembourg?
Cost of Living in Luxembourg
|Apartment (1 bedroom) in City Centre||1,671.38€|
|Apartment (1 bedroom) Outside of Centre||1,411.22€|
|Apartment (3 bedrooms) in City Centre||2,978.95€|
|Apartment (3 bedrooms) Outside of Centre||2,300.00€|
How much does it cost to buy a house in Luxembourg?
The average cost of an apartment in Luxembourg is now 690,000 euros. The average price of a house in Luxembourg is about 1 million euros, while in the north of the country the price can be half as much. Secondary housing in the center can be purchased cheaper than in a new building.