Buying real estate: pay attention to "hidden" fees!
12 OCT. 2018 | PROPOSED BY OUR PARTNER ING LUXEMBOURG
When you buy a property for the first time, the classic mistake is to limit yourself to the purchase price of the house and not to consider the ancillary costs. To avoid unpleasant surprises, here are the 6 "hidden" fees to keep in mind when you want to become an owner.
1. Notary fees
As a buyer, you have to bear all costs related to the deed of sale and paid to the notary. These expenses include the remuneration of the notary, the reimbursement of the expenses incurred by the notary's study for the services and documents necessary for the realization of the sale and the taxes. The latter correspond to the registration and transcription fees due to the Registration and Domains Administration and amount respectively to 6% and 1% for acquisitions for a fee (subject to payment).
You can, however, benefit from a tax credit immediately applicable when signing the deed of sale and limited to € 20,000 (€ 40,000 in the case of a joint acquisition) if you buy a building for the purpose of personal home. This tax credit can be used progressively for other acquisitions until exhaustion and you are granted that you are resident or not (provided of course that you committed to become resident in Luxembourg in the building acquired).
If you are a non-resident living in a third country in the European Economic Area (which brings together the 28 Member States of the European Union, Iceland, Norway and Liechtenstein), you will have to advance the rights registration and transcription and claim the tax credit thereafter upon presentation of a residence certificate in Luxembourg.
In all cases, you are required to personally occupy the dwelling within 2 years (4 years if it is a building plot or a building under construction) from the date of the notarial act of acquisition and uninterrupted for at least 2 years. Otherwise, you will have to repay the entire deduction.
2. Mortgage fees
If you have to borrow to buy your property, your credit institution will require a mortgage that will allow it to sell the property and recover the amount owed in case you have difficulty repaying the credit and all the solutions are amicable. would have been exhausted.
This mortgage must be registered in one of the Mortgage Offices in Luxembourg by notarial deed, which generates additional notary fees.
3. The file fees
At the time of the provision of your loan, your credit agency will charge a fee.
In general, these are not very high.
4. Home insurance and outstanding balance
The law does not require you to subscribe to these two insurance policies, but they are recommended and often required by the organization that grants you the mortgage.
Home insurance covers your home but also furniture and personal belongings against the risk of fire, water damage, theft, breakage of ice and storm.
The outstanding balance insurance is a form of term death insurance taken out as part of a mortgage loan. If you die prematurely, it allows you to repay the balance to your credit institution and avoids any financial problem to your partner or heirs.
5. Interim interest
If you are planning renovation or construction work and do not wish to repay your mortgage amount until after a certain period of use , consider the interim interest.
These are calculated on the basis of the amount borrowed (or actually used in the case of a new construction) until the beginning of the repayment.
6. The fees for the enjoyment of the property
Finally, remember to keep an envelope for all costs after acquisition such as landscaping to put the place to your liking (painting, flooring, partitions to knock down, attic to develop ...), moving expenses, possible furniture to buy back or condominium fees if you bought an apartment in a residence.
For more information, please visit www.ing.lu/immo or visit us at the branch.
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