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Buying Property

Luxembourg - Buying Property

There are no legal barriers preventing migrants from purchasing property in Luxembourg, regardless of whether they intend to live in the country or not.

Luxembourg has high rates of home-ownership, and as a small country, it has limited amounts of available building land. Many important industries such as banking and IT have bases in Luxembourg, attracting well educated, aspirational professionals. These factors combine to make Luxembourg an expensive place to buy a home, especially in Luxembourg City.

There are several routes to finding your ideal property, but most people will contact a real estate agent, known as agents immobiliers. It is rare for an owner to sell a property without an agent. Agents will have helpful websites showing the properties they are currently under instruction to sell, with filters according to price, location, type of property and so on.

Sale boards are also placed outside properties for sale, if the owner agrees to it. The boards will include the real estate agent’s contact details. This is useful if you have a specific location you would like to move to, as you will be able to spot new properties coming onto the market.

All estate agents in Luxembourg are regulated, and must be covered by professional liability insurance. This protects both buyers and sellers, and ensures a level of service appropriate to the significance of the business.

The real estate agent will arrange viewings with the owners, so you can visit the property as many times as you like before making an offer. Most people will visit twice. You can also look at the ministry of housing’s website to find out whether the asking price is reasonable.

By law, all properties about to change hands must be inspected and given an energy performance certificate, known as the energiepass. This will tell you how energy efficient the property is and what improvements could be undertaken.

Once you have decided you definitely want to buy somewhere, you will make an offer via your agent, who will communicate that offer to the seller. You may be accepted, asked to increase the offer, or rejected outright.

Once an offer has been made to the satisfaction of both parties, a legally binding purchase document will normally be prepared. This is not compulsory, but once signed it is enforceable and protects both parties. The contract should include the names and addresses of the buyers and seller, a full description of the property and buildings, the agreed purchase price, mortgage data, and details of the penalties should one party default.

You will normally be asked to pay a deposit at this stage. Your solicitor will keep the funds in a client account until it is eventually transferred to the seller on completion of the property transfer.

A building surveyor can be hired by the buyer to investigate the condition of the property. There are different degrees of investigation that can be done, with a range of charges to match. A mortgage company will ask for at least a basic check and report to be completed, to ensure their loan is being used for a property which is in good condition and being bought at a reasonable price. In the event you default on the mortgage, they will repossess the property and sell it.

If you are buying your new home without a mortgage, you will not be obliged to commission a building surveyor’s report. However, you may wish to make this investment anyway, so that any issues of concern can be identified and investigated by the experienced professional before the sale progresses further.

Apartment blocks have a number of charges and responsibilities levied on all the residents. This could include maintenance of elevators and corridors, employment of a concierge or handyman, general repairs and other costs which may be levied monthly. It is possible that significant repairs, such as to the roof, may require additional payments. Meanwhile, residents may be required to deal with refuse in a particular way or to a timescale, or be required to follow other rules such as where to store bicycles or allow visitors to park. Each property will be different. Make sure you have received written notice of all charges, obligations and rules, and that you are happy with them. Your solicitor will normally include this in the purchase papers but you must have reviewed it thoroughly too.

Your solicitor must register your title with the Administration de l’Enregistrement et des Domaines. A tax charge will be levied, which the buyer pays. The rate will be between six percent and 10.20 percent. A transcript tax of 1.2 percent will also be levied on the property buyer. The registration tax can be increased to 7.2 percent if a resale clause is added to the property deeds. In Luxembourg City, a further three percent is also added.

Solicitors in Luxembourg are regulated and covered by professional indemnity insurance. Their work protects your legal rights to a property which you have paid for. They charge 1.5 percent of the property purchase price to cover the cost of their work, which is paid by the buyer. The legal work for the seller will be typically done by a different solicitor, and the seller will pay their own costs.

On successful completion of a house sale, the agent will receive a fee of three percent (plus VAT). This will be paid by the seller, and is normally deducted from the property sale funds by the solicitor, who then makes the appropriate payment to the agent. The property buyer does not pay the agent.

It is also possible to purchase property through an auction. You must have your finances in place before the auction takes place, and comply with all terms and conditions. You are advised to visit the property and perform enough checks on the property and area to satisfy yourself it is a good purchase before the auction date. Once you have given the winning bid for a property in the auction, you are committed to purchasing that property, making the immediate deposit and settling the balance within tight deadlines.

House builders also sell apartments and houses off plan. This means you choose the property from its plans, usually after having looked at the ‘show home’, which is an example of the property type about to be built. The purchasing process is similar to that for existing homes, except that you will pay the purchase price in agreed instalments. Once the property is completed, you will need to sign an acceptance agreement, and to note on it anything that you have found to be missing, incomplete or requiring repair. The builder will have to deal with these issues and resolve them as quickly as possible. You will have a 10-year warranty, which means all issues relating to the property construction can be referred back to the builder during the warranty period.

The government can offer and promote schemes to help homebuyers and home builders finance their purchase. This can be through tax credits, grants, saving schemes or allowable tax deductions. Each scheme will have rules and conditions, and will change in response to economic conditions. They will normally only be available to those purchasing their primary home, and all the scheme criteria will be strictly applied.



Expat Health Insurance Partners


Bupa Global

At Bupa we have been helping individuals and families live longer, healthier, happier lives for over 60 years. We are trusted by expats in 190 different countries and have links with healthcare organisations throughout the world. So whether you're moving abroad for a change of career or a change of scene, with our international private health insurance you will always be in safe hands.

Cigna

Cigna has worked in international health insurance for more than 30 years. Today, Cigna has over 71 million customer relationships around the world. Looking after them is an international workforce of 31,000 people, plus a network of over 1 million hospitals, physicians, clinics and health and wellness specialists worldwide, meaning you have easy access to treatment.