{"id":9178,"date":"2023-11-19T13:10:34","date_gmt":"2023-11-19T12:10:34","guid":{"rendered":"https:\/\/www.fidem.lu\/eigenkapital\/"},"modified":"2024-02-24T14:27:42","modified_gmt":"2024-02-24T13:27:42","slug":"equity-capital","status":"publish","type":"page","link":"https:\/\/www.fidem.lu\/en\/equity-capital\/","title":{"rendered":"Equity capital"},"content":{"rendered":"\t\t
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Equity for real estate financing<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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How much down payment do I need for my real estate financing in Luxembourg? And how to calculate the acquisition fees?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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When a question implies many variables, the answer is often “it depends”. Calculating the minimum down payment or the optimum down payment for a real estate acquisition are no exceptions to that.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Down payment in Luxemburg<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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In Luxembourg, the costs related to the acquisition must be covered by the real estate property buyers and from their own savings. Because it is not part of the property value, the banks are not financing these acquisition costs. Depending on the buyer profiles, they can benefit from the Bell\u00ebgen Akt which can significantly reduce the acquisition fees compared to Belgium, France and Germany.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Acquisition costs and applicable fees<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Acquisition costs contains mainly notary fees for the real estate purchase deed, mortgage deed, the applicable registration rights, or stamp duty (Inscription tax duty), potentially life insurance premiums, and ultimately bank fees.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Down payment in Luxemburg<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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In Luxembourg, the costs related to the acquisition must be covered by the real estate property buyers and from their own savings. Because it is not part of the property value, the banks are not financing these acquisition costs. Depending on the buyer profiles, they can benefit from the Bell\u00ebgen Akt which can significantly reduce the acquisition fees compared to Belgium, France and Germany.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Acquisition costs and applicable fees<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Acquisition costs contains mainly notary fees for the real estate purchase deed, mortgage deed, the applicable registration rights, or stamp duty (Inscription tax duty), potentially life insurance premiums, and ultimately bank fees.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Notary fees include two deeds (due on notary deed): <\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\u00ab Acte de Vente \u00bb (Purchase deed)<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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This first deed transfers the asset ownership from the selling party to the buying party.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u00ab Acte hypoth\u00e9caire \u00bb (Mortgage inscription)<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Giving a guarantee to the bank, If the owner is defaulting on due payments, the bank can legally force the sale of this asset to recover its due amount.<\/p>

The applicable notary fees are calculated by the appointed notary, so \u201cit depends\u201d on the purchase price and on the loan amount. Thus, it is generally estimated between 5.000 EUR and 10.000 EUR.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Registration Rights fees (Droits d\u2019Enregistrement)<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Existing property<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The notary must account 7% registration fee on the purchase price for existing properties.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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New construction (VEFA)<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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For new constructions, the registration fee is based on the land value (\u201cQuote-part terrain\u201d). If the construction has already started, the calculation must integrate the constructed value of the building at the time of the notary deed. (VEFA & EXIST Article)<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Tax credit - Bell\u00ebgen Akt<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Luxembourg state authorities have increased the tax allowance reducing the due registration rights fees for any deed signed on or after 7th<\/sup> of March 2023. Till then, this tax credit, Bell\u00ebgen Akt, of 20.000 EUR was applicable for the first acquisition of a main personal residence. This tax credit is now raised to 30.000 EUR per property buyer, and it remains subject to conditions of effective occupancy as main residence.<\/p>

\u00a0<\/p>

Check your existing Bell\u00ebgen Akt tax credit on MyGuichet.lu<\/a>.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Buyer\u2019s obligations<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The main buyer’s obligations are to occupy effectively and personally the property acquired within a timeframe of 2 years from the date of the notarial deed of acquisition, or within 4 years if the acquisition is a building plot or a building under construction and then with an effective occupation of at least 2 years.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Minimum registration rights fees<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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If the total of due registration rights fees is lower than the available tax credit, the minimum due amount is 100 EUR.<\/p>

In case of unused tax credit after the first acquisition, the remaining amount is available for the next main residence acquisition in Luxembourg.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Tax credit repayment<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The buyer must repay the tax credit in full plus applicable legal interests if he or she fully or partially rents out the building, or transfers the property, or changes his or her legal address\u00a0before the completion of the 2 years of occupation period.<\/p>

For complimentary details, please refer to us and you can read more from these following official sources :<\/p>