Administrative and financial steps to buy real estate in Luxembourg
The purchase of real estate is one of the major steps in a lifetime. Before buying a home in Luxembourg, it is essential to learn about the administrative and financial procedures to be carried out. This guide informs you step by step.
Administrative procedures related to the purchase of housing in Luxembourg
You found a property matching your expectations? Compared to other countries, the purchasing process is quite simple in Luxembourg. Before buying the property, make a careful visit of the parts . You can join the services of a real estate expert who will identify any hidden defects (humidity, cracks ...). If renovations are necessary or if you wish to carry out alterations, you will have to ask for authorization from the municipal administration beforehand. Also make sure that the accommodation has an energy passport . Mandatory since 2008, this certificate gives you an overview of the energy needs of the property. High energy performance guarantees lower loads.
The sale of an apartment or house is often preceded by the signing of a compromise. Not mandatory, this document constitutes an agreement between the seller and the buyer. It is a realization of the act of purchase. The possession of this document will help you obtain a loan from your bank. The sales agreement can be drafted by a notary, a lawyer or a real estate agent. After the signing of the sales agreement, the first step is to contact a notary to proceed with the signing of the deed of sale and the registration of the property in the register (Administration of Registration and Domains). In addition, on the basis of the sales agreement, the latter will be able to carry out research relating to the property and its owner. The notary verifies the presence of any assumptions and other charges as well as the quality of the seller's owner. This research is a guarantee for the purchaser. The payment of the deposit to the notary usually takes place on the day of the signing of the deed of sale.
Establish a financing plan and obtain a loan
Buying a property involves establishing a financing plan . This must include the various costs related to the proposed purchase, ie the price of the property itself, the notary fees, the price of any repairs and conversions, mortgage fees, incidental expenses (connection to water, electricity ...) as well as a small reserve for unforeseen expenses. This financing plan will allow you to determine the amount to borrow.
The first expenses will be for the real estate agent who deals with the sale of the property. These fees are generally between 2% and 5% of the purchase price of the property. During your steps, the agent will be a great help, especially if you do not master the Luxembourgish or German. He can also help you with the contraction of a loan from your bank and inform you about the legal aspects related to the purchase of a property. To apply for a loan from a bank, the ideal is to submit a sales agreement.
In addition to the price of the property, you must take into account notary fees . These correspond to approximately 7% of the selling price of the property. They include the registration fees paid back to the State (about 6% + 1% of administrative fees), the disbursements made by the notary relating to the acquisition of the property and the fees of the notary. Getting a loan in Luxembourg is quite easy. The repayment can extend over 20 to 30 years. Some banks will require that the refund be taken directly from the salary. The bank will usually ask you to provide a personal contribution.
As for the mortgage , it can be of two types: variable rate or fixed rate. The amount of the monthly repayment will depend on the length of your credit, the total amount to be repaid and interest rates. In order to obtain collateral, the bank may require you to purchase outstanding balance insurance. This allows the bank to recover the amount of the loan in the event of death.