The country boasts a higher home ownership rate than most European countries at over 75 percent. Most people live in the south of the country and nearly a quarter of the population of the country reside in Luxembourg-City and the surrounding areas. There is somewhat limited supply and growing demand in the cities. It is a popular option to purchase a plot of land and build a dream house.
The real estate market is expensive, but there are options for buyers on a budget. Staying outside the downtown area is the biggest money saver. Commuting is fairly inexpensive and, because of the small size of the country, quick.
Price per Square Meter to Buy Apartment in City Centre 6,000.00 euro
Price per Square Meter to Buy Apartment Outside of Centre 3,000.00 euro
Most flats are unfurnished and come with a cellar for storage. Most houses and some apartments have a garage or parking space for automobiles.
There are no restrictions on foreign ownership of property. Most expats rent as the economic benefits of buying property are unsure unless you stay for at least 5 years. If you do choose to buy, the purchase of property is relatively straight-forward. If you are not familiar in the languages of Luxembourg, you should make sure to hire an advisor or attorney who is fluent. It is advisable to have a local attorney help you with the purchase so all laws and regulations are adhered to.
Online listings can give you a great feel for the market and allow you to determine if a place fits your specifications before you spend time going to look at it. Accommodation agencies are called immobilieres, with sale listings under acheter or vente.
Expat classifieds are another useful resource. Check for the area and type of place you are looking for.
Papers offer local listings as well as realtor advertisements. Some newspaper only offer listings on a specific day (i.e. Sunday) so check before purchase.
Many places have boards in which people advertise goods and services. Laundrettes, cafes, churches, grocery stores, community centers, and bars all might have private ads. Some places cater to expats and these are often the best places to look. You can also post a wanted ad specifying what you are looking for.
A real estate agent (agents immobiliers) is vital to finding the right property for you. A good agent knows the legal pitfalls, ins-and-outs of housing in the area, and how best to navigate a contract and mortgage. Most sellers list with an agent to get their house sold and the agent's fees are paid by the seller. Agents are particularly helpful in Luxembourg for translation if you are not completely comfortable with French, German, or Luxembourgish. This can save you hundreds of thousands of dollars in the long run.
Property agents must be approved by the Ministere des Classes Moyennes after passing an exam and acquiring a professional card. Estate agents must also have a professional liability insurance. A number of listings can be found at http://www.athome.lu/find-agent.
If you have been relocated by your company, there is usually an agent employed by your company to help facilitate the move. At the least, the company can usually recommend an agent. Co-workers are also an excellent source of information and recommendations.
Before you sign any documents, including your contract with your realtor, have it looked over by a lawyer or advisor. It is extremely important that every element of a contract be understood before signing.
A solicitor/lawyer, estate agent or notary should be used to draw up the purchase agreement (compromis de vente).
On the day the contract is signed, a deposit is usually placed. This is usually around 25 percent of the purchase price and will apply to the purchase of the home. The amount should be paid into an escrow account held by a notary of the buyer's choice. The deposit is refundable if one of the let out clauses of the contract are not met (i.e. unable to obtain a mortgage).
Luxembourg's many banks offer many opportunities for finding a loan. Mortgages are available to foreigners, though Luxembourg's banks rarely offer fixed rates. To provide a mortgage, banks may require the buyer pay directly from their salary to a current account. A long term payment plan can be arranged over a period of 20-30 years.
Tax is payable for municipal services and vary between 0.7-1 percent per annum. Net wealth tax at a rate of 0.5% can also be levied annually.
The cost of property registration is 6 percent of the house's value. An additional 1 percent transcript tax is also required. There is also a 6 percent transfer tax and annual property taxes range from less than 1 per cent to around 8 per cent of the purchase price (depending on the commune).
If you declare in the purchase deed an intent to resell the property, the registration tax would be raised to around 7.2 percent. 5 percent of that cost can be recovered if resale is registered within a four-year period. V.A.T would not normally be applicable.
Buying at auction is very exciting and can offer you a significant savings. Note that this is not the best way to buy for new buyers. You should be experienced in the purchase of real estate, or bring someone who is. Sales are listed in most national newspapers and at notary's offices.