Luxembourg

1. Parties and Ownership – Who can own real estate and what types of ownership are there?

Parties

Any person can own real estate.

As to legal capacity, Luxembourg law distinguishes between individuals, legal entities and foundations.

Legal entities may either be private law entities (such as non-profit making associations, commercial companies or organisations of economic interest), or public law entities (such as the State, districts, public establishments).

Owners of real estate therefore include private developers, insurance companies, banks and other financial institutions, private or public companies, government and local authorities, etc.

There is no restriction on real estate ownership based on the citizenship of the owner.

Ownership

Ownership is either private or public, depending upon whether the person entitled to own is a legal person under private law or a legal entity in public law (State, districts, municipalities, etc.).

Private ownership can also be either individual or plural, according to whether the legal person with title is an individual or a group of individuals, e.g. co-ownership. Co-ownership is where two or more people each have a portion of legal ownership of the same thing. The co-owner can encumber its portion of the rights in rem (e.g. mortgage).

The Civil Code governs the regime for enforced co-ownership, in particular the enforced co-ownership of buildings such as apartment blocks.

Luxembourg law draws a distinction between ownership and possession. Possession is where a person behaves as the owner of the thing regardless of the question of whether or not the possessor is the owner. The law offers protection to a person in possession, granting him possessory actions allowing him to defend himself quickly, at little cost, against each person interfering with his possession.

A person in possession for a certain period can, subject to compliance with certain conditions, become the owner. This mechanism is known as adverse possession. In this regard, article 2262 of the Civil Code stipulates that a real property is “adversely possessed” after 30 years, meaning that ownership will only be acquired by adverse possession after 30 years have elapsed.

2. Interests – What types of real estate are sold?

Luxembourg law distinguishes two categories of patrimonial rights: real rights (rights in rem) and personal rights (rights in personam).

In property law, rights in personam essentially have their origin in the relationship between landlord and tenant pursuant to a lease agreement.

There are four types of property lease agreements under Luxembourg law: the standard (civil) lease, the commercial lease, the residential lease and the agricultural lease.

In contrast to rights in personam, there are a limited number of rights in rem. Under Luxembourg. The following are considered as real rights:

  • Ownership
  • Usufruct
  • Rights of usage and residence
  • Emphyteotic lease
  • Easement
  • Right of superficies (also referred to as building right)

The most absolute right in rem is the right of ownership.

Real estate ownership entails all the rights and privileges afforded to the owner. This includes the right to use the property, the right to receive all revenues flowing from the property and the right to abuse the property (including its destruction), subject to restrictions imposed by any applicable laws and regulations and subject to sanctions arising from the rules of civil liability when the owner is either causing damage to others through his/her fault or, without fault, is causing abnormal damage to neighbouring properties.

In addition, ownership of land includes in principle ownership of the ground and of the subsoil, together with all the proceeds and income deriving from them.

Pursuant to the principle of accession, ownership of land automatically brings with it ownership of all that is built on it. Accession is therefore a method of acquiring ownership where the owner of a principal asset becomes the owner of all that is incorporated in it.

According to this principle, the owner of a plot of land automatically becomes the owner of any construction on the land, regardless of the identity of the person who built it and/or the ownership of the building materials, unless otherwise agreed with that person. It is possible for the owner to waive its right of accession. Such waiver results in the builder becoming owner of the building and generally creates a right of superficies or an emphyteotic right (long lease) both limited by law to 99 years.

Rights in rem (other than the right of ownership) over property are from time to time created to grant a right of use over property, being usufruct, emphyteotic lease and the right of superficies. For the “lessee” they usually offer more stability than a mere lease. For the “lessor” they usually guarantee an income over a longer period of time.

Moreover, in certain circumstances, the acquisition of rights in rem can be considered as an alternative to a purchase. Rights in rem are usually granted for a long period (up to 99 years), and carry extensive rights for their holder.

Transactions having the effect of transferring title to a real estate property or of creating a right in rem encumbering such a property have to be recorded at the Mortgage Registrar Office. Such registration is required in order to have a valid title against all third parties, who may take precedence in the absence of registration (see section 12).

3. Employees – What employment issues affect real estate acquisitions?

Employment issues are not common in relation to the acquisition of real estate. Those which may be relevant to real estate transactions typically concern the transfer of undertakings and redundancies.

Transfer of undertakings – TUPE

TUPE is likely to have significant consequences on employment issues. TUPE applies when the “acquisition” brings a change of employer. There is no change of employer when the operation only consists in the change of a shareholder. It may apply when a sale or transfer of a business or, for example, the outsourcing of the management of a property to a third party. This might occur in the sale of a shopping centre having its own management and security staff. The broad effects of TUPE are that:

  • the employment contracts are automatically transferred from the transferor to the transferee
  • the working conditions (seniority, salary, responsibilities, working time, etc.) and collective bargaining agreements (working hours, thirteenth month, salary, etc.) existing with the transferor have to be maintained, except in principle for the old-age, invalidity and pension benefits payable under schemes supplementing the official social security system
  • transferor and transferee are in principle jointly liable for the debts resulting from the employment contracts existing at the time of the transfer,
  • dismissal for a reason connected to the transfer is automatically unlawful – unless for an “economic, technical or organisational reason entailing changes in the workforce” and
  • employees’ representatives must be informed and consulted about the transfer in advance (if there are no employees representatives, the employees concerned by the transfer will have to be informed).

Although the legal effects of TUPE cannot be avoided, it is possible to allocate TUPE liabilities by agreement between the transferor and the transferee. Normally the transferor will agree to be responsible for all claims and liabilities relating to employees up to the date of transfer, and the transferee will take on all post-transfer employment liabilities. Such an agreement concluded between the transferor and transferee has no effect as against third parties.

Redundancies

Redundancies may arise on the closure of a business or part of a business or where there is a reduction in the number of employees required, for example on the merger of two businesses or a TUPE transfer. If the conditions of mass redundancies are met, care should be taken to ensure that the redundancies are carried out according to a strict procedure which entails information and consultation of the employees or their representatives, before any decision is taken.

4. Procedure – What are the steps in a sale and purchase transaction?

The direct acquisition of a property is made by the seller and the buyer entering into a contract of sale. Under Luxembourg law, there is a binding contract of sale (be it of movable or immovable objects such as real property) as soon as parties have reached an agreement on (i) the object and (ii) the price.

Consequently, if an offer with a determined purchase price is made for a well identified property, and this offer is unconditionally accepted by the seller, then a binding sale agreement immediately comes into force.

The contract of sale is documented in writing. This written contract may be drafted privately, i.e. without the intervention of a public notary. It is then commonly called a compromis de vente.

The compromis de vente is only enforceable between the seller and the buyer.

For the purpose of making the transfer of title enforceable against third parties, the sale must be registered in the Mortgage Registrar. This formality is called the transcription.

For the purpose of registering the sale in the Mortgage Registrar, the seller and the purchaser must sign a notarial deed before a public notary.

The public notary handles the register of the deed on the Mortgage Registrar.

The execution of a detailed private sale agreement (compromis de vente) or the execution of the notary deed of sale is not necessary to bind the parties. Indeed, although the ownership rights over the property will only effectively be transfered to the buyer upon the execution of the notary deed of sale, this is without prejudice to the fact that the parties are bound as soon as they have agreed the essential terms of the sale. In practice, however, parties usually sign a compromis de vente in a first phase. The signature of the notarial deed takes place in a second phase.

The transfer tax (see section 20) is due within three months after the registration of the deed relating to the transfer of property.

Any deed relating to a transfer of property must be registered within three months after the conclusion of the deed between the parties. Once registered in a notarial deed, the public notary presents the deed for registration in the Mortgage Registrar.

In addition, an energy performance certificate must be provided in order to validly complete the sale of the property (see section 10 below).

5. Contract terms – What provisions does a real estate contract contain and what is implied by law?

Provisions of the contract

As mentioned in section 4, above, before entering the sale contract before a notary, the seller and the buyer may sign a written compromis de vente.

As for the contract of sale, the compromis de vente must contain the parties’ agreement on the characteristics of the property sold and in what constitutes the consideration price.

By the signature of the compromis de vente, the sale becomes perfect and binding between the seller and the buyer, which means it is definitive. The seller is under the obligation to transfer the property to the buyer and the buyer must pay the price to the seller. The agreement must provide for the timing of the transfer of title. Such transfer is usually deferred until the signing of the notary deed.

However, parties can postpone the definitive character of the compromis de vente and defer its effects by way of conditions precedent.

A real estate sale agreement commonly contains, whatever the nature of the property sold, provisions concerning the identity of the parties, a description of the sold property, and the actual condition of the property. Since the buyer buys the property in its condition at the time of the transfer of title and such transfer is usually deferred until the signature of the notarial deed, if damage occurs between the compromis de vente and the signature of the notarial deed, the seller will have to make the necessary repairs. The parties do, however, have the contractual freedom to provide for other arrangements.

Every easement (e.g. right of way) on the sold property known by the seller or which appears on the title deed(s) of the property will be mentioned in the agreement.

As the price is an essential element of the contract of sale, it has to be established with a certain degree of certainty. In most cases, the price will be paid on the day of execution of the notarial deed. A deposit, normally around 10% of the total sale price, is usually paid upon the signature of the compromis de vente. The deposit is basically used as a kind of guarantee for the seller that the purchaser signs the notary deed of sale. If the purchaser fails to sign the notary deed within the agreed period, the deposit is then kept by the seller as compensation (notwithstanding the seller’s right to claim additional damages before the Courts if he deems his losses to be higher).

The compromis de vente and the notarial deed usually contain a clause discharging the seller of all its obligations due to any visible flaws and defects (but only those hidden defects of which the seller was not aware at the time of the sale).

It is usual that the seller declares that the property is insured against fire and other connected risks until the notarial deed is signed and that the purchaser subscribes for the necessary insurance as of that date.

When necessary, the agreement may contain a discharge for the property concerning charges and mortgages and the notary will carry out the necessary steps to that effect.

Terms implied by law

The Civil Code provides two guarantees: a guarantee in respect of hidden defects affecting the property and a guarantee in respect of the title to the property.

The guarantee in respect of hidden defects is generally waived by the buyer. Such waiver however does not cover defects of which the seller was aware at the time of the sale.

6. Due Diligence – What investigations does the buyer normally make?

Before signing the compromis de vente

The prudent buyer is likely to commission a (technical) survey of the building and if appropriate, soil and geological investigations, plant and machinery tests, and environmental investigations.

In the context of the pre-acquisition due diligence, the buyer’s lawyers will investigate the title of the property. The buyer’s lawyers will consider the entries in the Mortgage Registrar and the Land Registrar (cadastre) and all relevant historic title documents.

In practice, the buyer’s lawyers will order a mortgage certificate from the Mortgage Registrar and an excerpt from the Land Registrar. The certificate will confirm whether or not the title is registered in the name of the seller and if the property is encumbered (e.g. mortgage, easements, etc). Additional details of all other registered interests of the seller need also to be obtained from the Mortgage Registrar. The excerpt from the Land Registrar gives valuable information regarding the implantation and surface of the property as well as its neighbouring properties.

If the property is leasehold, or subject to leasehold or other occupational interests, the terms of the relevant occupational documents need to be considered carefully to ensure they are not contrary to the buyer’s intentions for the property. The buyer’s lawyers will also need to check whether these documents require the consent of any third party to be given to the transaction.

Furthermore, the buyer’s lawyers may enquire whether any pre-emption right may be applicable to the property.

The buyer’s lawyers will conduct various searches to check the position regarding municipal and zoning consents, environmental matters, easements, works carried out, etc. If the seller is a company and the sale bears on its business or activities, the buyer’s lawyers will also conduct searches regarding all properties owned or occupied by the company in relation to its business or activities. They will also ascertain whether the company is solvent and may dispose of its assets freely.

Reporting to the client

Before the execution of the sale agreement the buyer’s lawyers usually report their due diligence findings to their client, raising any matter of particular importance or concern.

Pre-completion

Before completion (which materialises in the execution of the notarial deed), the buyer’s lawyers will normally ask the seller to divulge any further information that has arisen since the signature of the compromis de vente.

7. Registration and Notarisation of real estate – What are the basic requirements?

In Luxembourg, the land register is called the Mortgage Registrar (Bureau de conservation des hypothèques).

Depending on the location of the property, there are three different offices in charge of the Mortgage Registrar.

Registration of title with the Mortgage Registrar is required in order to have enforceable title against third parties.

Transactions having the effect of transferring title of property, or of creating a right in rem encumbering such property, such as the right of superficies, may be registered with the Mortgage Registrar. Transfer of title occurring following the death of a person or pursuant to the law (such as by way of accession) may not be recorded with the Mortgage Registrar.

The register of the relevant transactions must occur as soon as possible in order to render the transfer of title enforceable against third parties.

The disposal of a real estate is subject to a proportional 6% Luxembourg registration duty (droit d’enregistrement) and 7.2% in case of an acquisition for the purpose of resale. There are also 1% of transcription tax and a communal surcharge of 3% or 3.6% may apply if the property is located in Luxembourg-City. These rates apply on the sale price including any VAT.

Notarial fees are determined by grand-ducal regulation and depend on the type of transaction and the amount involved. They are usually based on a scale or on a percentage of the amount involved in the transaction.

8. Permits – What permits/authorisations are required for the use and occupation of real estate and are they personal?

Planning/Zoning permit

In principle, a building permit will be required for the construction of a new property or for the re-building (i.e. refurbishment or amendment of an existing use) of an existing building or demolition.

Several planning tools coexist in Luxembourg. Luxembourg government is mainly responsible for developing and setting up the land use planning. Each municipality also has its own planning tools that must comply with the land use planning regulations established by the government. In each municipality (commune), the Mayor (bourgmestre) is competent to grant the building permits.

When deciding on the issue of a building permit, the municipal authorities will first examine whether the intended construction or re-construction complies with the applicable zoning plans, if any, which have been adopted at the regional and/or municipal levels.

Moreover, a prior evaluation of the building project’s impact on the environment may have to be provided by the applicant at the time of application (see below – authorisations to be requested for classified establishments). For specific projects, a study of such impact must be performed by agreed bodies and will give rise to a public inquiry.

Specific authorisation required for large retail areas

In addition to a building permit, the Law of 2 September 2011 regulating the access to the professions of craftsman, salesman, and industrial as well as to some liberal professions provides that a specific authorisation from the Ministry of Middle Classes is required in the event of creation of a retail space with a sales area greater than 400 sqm.

Authorisations to be requested for classified establishments

The law of 10 June 1999 on classified establishments, as amended and completed by several grand ducal regulations and lastly by the law of 9 May 2014 (the “Law”) requires that any industrial, commercial or craft facility, whether public or private, must obtain a prior authorisation whenever its activity may present danger or nuisance to: 

  • security or health
  • health and safety of workers in the workplace
  • the human and natural environment.

The aim of the Law is to prevent and reduce pollution emanating from these establishments. As a consequence, building a classified establishment is possible only once an authorisation has been duly issued and the competent administration must be informed of any contemplated modification to the building.

The Law divides classified establishments in four different categories (1, 2, 3 and 4) and two sub-categories (3A and 3B), further defined in the grand-ducal regulation of 10 May 2012. Classification in one category or the other helps to establish the authority entitled to deliver the authorisation as well as the applicable procedure.

Depending on the classification of the establishment, the Law may apply in combination with the legislation on waste prevention and management or with legislation on water and imposes further authorisations or studies like risk assessment and safety analysis of the establishment.

9. Insurance and Risk – What insurance will the parties effect and when does the insurance risk pass at the time of sale?

The owner of a property will most often be responsible for the insurance of the property prior to a contemplated sale.

However, where the property is subject to a lease, the terms of the lease will determine which party has the responsibility to insure the property. With regard to buildings which are under construction, it is important that parties arrange clearly for the changeover of the insurance responsibility from the constructor to the buyer. During the construction of the property, the contractor (unless the parties agree otherwise) remains liable for all risks related to and damages caused by or in the process of construction. As from the delivery of the buildings to the buyer (or tenant), the construction policy will no longer apply and the buyer (or tenant) will need to take out other insurance.

Insurance policies are contracts intuitu personae, implying that their conclusion and existence depend on the personal qualities or capacities of the contracting party. Insurance policies are therefore not transferable on the sale of real estate. In larger real estate transactions it is often contractually provided that the seller of the property undertakes, during a certain time after the closing of the sale, to maintain and hold the insurance policies applicable to the property. This allows the buyer some time to arrange for the required insurance transition.

10. Environmental – What are the common environmental issues?

Note: Besides energy performance certificate, the presence of all required and valid authorisations (see section 8) is also an important issue in real estate transactions.

For any non-residential and residential real estate transaction (extension, modification, substantial transformation or change of owner or tenant), it is mandatory to possess a valid energy performance certificate. This certificate must be based on measured energy consumption and must contain qualitative recommendations related to energy enhancement possibilities of the building. It is valid for a ten years period.

11. Pricing/Valuation – What sets the price/valuation of real estate?

The price must be certain, be it determined or determinable (it may be specified by an expert). Furthermore, the price must be real, i.e. not simply nominal.

The determination of the price cannot turn on the will of one of the parties or upon the conclusion of an agreement post-sale.

Pursuant to article 1591 of the Luxembourg Civil Code, the price is, in principle, fixed by the parties.

Article 1592 of the Luxembourg Civil Code, however, states that the price can be determined by a third party expert.

The choice of an expert can be agreed after the sale in some cases (see below). Should the parties be unable to reach agreement, the judge can only intervene to replace the expert where this is provided for in the contract. If the parties cannot agree on an expert, the sale will be void. If one of the parties refuses to choose the expert, the other party cannot force him to participate, the sale will be void, but damages can be claimed from the non-cooperative party.

When the parties decide that an expert will set the price but do not appoint an expert, for the price to be determinable, they must have agreed upon the criteria to be taken into consideration when making the valuation. If the expert has been appointed, this appointment is in itself sufficient to render the price determinable.

12. Taxes and Costs – What are they and who pays them?

Transfer taxes

The disposal of a property located in Luxembourg is as a rule subject to ad valorem transfer taxes at an aggregate rate ranging from 7% to 11.8% and calculated on the value of the land and the existing constructions at the time the sale agreement is entered into by the parties. When the value added tax (“VAT”) is applicable (see below), the basis for the computation of the transfer taxes includes the VAT charged upon the sale of the property. Transfer taxes are normally payable by the buyer unless otherwise agreed between the parties.

Transfer taxes are in principle composed of a 6% registration duty (droit d’enregistrement) which raises to 7.2% in case of acquisition for the purpose of resale), plus a 1% transcription duty (droit de transcription). In addition, a 3% (or 3.6%) municipal surcharge is applicable in case of transfer of a commercial property located in Luxembourg-city (i.e. 50% of the registration duty).

The sale of the property is subject to transfer taxes regardless of whether or not the sale is subject to VAT.

Transfer taxes also apply when the property is transferred indirectly through the transfer of interest in a partnership owning the property.

Reduced rates are applicable in some cases. The contribution of real estate assets to a company in exchange for shares is subject to a 0.61% (i.e. 0.5% + 2/10) registration duty as well as a 0.5% transcription tax (resulting in a total levy of 1.1%). However, the contribution of real estate assets paid for other than by shares are subject to a 6% registration duty as well as a 1% transcription tax (plus the 3% municipal surcharge if applicable). In addition, the transfer of real estate assets in the context of a corporate restructuring (such as the contribution of all assets and liabilities or one or more branches of activities) is exempt from transfer taxes. Such transfer must, however, be paid for mainly (i.e., for more than 50%) by the issue of shares in the share capital of the receiving company.

VAT

The supply of immovable property (including the transfer of rights in rem) as well as the leasing and the renting of immovable property are in principle exempt from VAT without right to deduct input VAT. However, the exemption does not apply, inter alia, to the supplies of property to the extent that the construction sold did not exist at the time the contract was concluded (vente d’immeubles à construire).

Taxable persons may however request a waiver of their exemption and elect to have their transactions subject to VAT at the rate of 17%, provided the following conditions are met:

  • The supply, transfer or letting of property is performed by a VAT taxable person to another VAT taxable person;
  • The property is used wholly or mainly for the purpose of activities for which the acquirer or lessee is entitled to a deduction for input VAT. The term “mainly used” is, in principle, considered by the VAT authorities as satisfied when the property is used for more than 50% by the lessee or the acquirer for activities allowing input VAT recovery. However, the VAT imposed on the sale or renting transaction can only be deducted by the acquirer or the lessee pro rata.
  • An official option form has been filled in.

The option to submit the sale to VAT must be requested to the tax administration via the filing of a special form called “déclaration d’option”. Submission of this form to the VAT authorities is mandatory and no deduction can be claimed before administrative approval.

The agreement from the tax administration must be obtained before the sale is executed. The form must, inter alia, inform about the identities of the buyer and the seller, their activities, addresses, the description of the property and in which proportion it will be assigned, i.e. leased for activities allowing to deduct input VAT or not.

The tax administration must in principle reply within one month after the filing of the déclaration d’option.

The tax administration is entitled to regularise the deduction right of the seller during a ten year period before the sale if his situation changes (e.g. its activity is no longer subject to VAT).

The taxable amount is the full amount, at market value, of the real estate received by the buyer. Such option does not prevent registration duties being levied (see above).

Income tax and real estate tax

Income tax

Net income attributable to a property located in Luxembourg is subject to income tax.

Rental income encompasses, inter alia:

  • income arising from the letting and leasing of movable property or real estate;
  • income arising from the granting of exploitation or extraction rights of mineral or fossil deposits existing under the ground or on the surface; and
  • the rental value of the residence and its dependences occupied by the owner. This deemed income is based on fictitious rental value derived from the unitary value of the house (generally 1% to 2% of the market value). The deemed income is equal to 4% of the unitary value not exceeding EUR 3,800 and to 6% of the unitary value above EUR 3,800.

Deductible expenses for rental income include the maintenance costs for the building, interest and charges linked to the financing of the property. Property is depreciable, with the exception of land.

The rental value of the occupier’s principal dwelling can only be reduced by interest paid on loan financing for the acquisition or the construction of an extension to the property. The interest deduction is capped at a certain amount depending on the year of occupation of the dwelling by the owner and its family circumstances. While construction is in progress, mortgage interest and other financing costs are fully deductible.

Capital gains realised on the disposal of real estate assets within a period not exceeding two years between the acquisition (or the constitution) and the realization are subject to income tax at normal rates. The gain is determined by the difference existing between the selling-price and the purchase or production cost plus the acquisition charges.

Capital gains, realized on the disposal, more than two years after purchase (or the constitution), of real estate assets which does not form part of the assets of a business or of the assets used within the scope of independent professional activities, are subject to income tax at a special rate equal to half the normal rates. For the purposes of the determination of the taxable gains, the purchase or production cost of real estate assets are re-valorised by the multiplication of a coefficient stipulated by law to take into account the devaluation of money.

The gain realized upon the sale of a property which is a principal residence is not subject to tax.

The disposal, against consideration, of shares in a tax transparent real-estate investment company (société civile immobilière) is regarded as the disposal of the underlying real estate assets.

Real estate tax

Real estate tax (impôt foncier) is levied by the municipalities on the unitary value of immovable property located within their territory. The unitary value and the applicable rates depend on criteria such as size, age, location and economic use of the property.

Corporate income tax

Real estate companies, incorporated under the form of companies limited by share capital (i.e. société anonyme, société à responsabilité limitée and société en commandite par actions) are subject to corporate income tax (impôt sur le revenu des collectivités – “CIT”) and municipal business tax (impôt commercial communal – “MBT”) at an aggregate rate of 29.22% on their net profit. The taxable basis for CIT/MBT purposes corresponds in principle to the accounting profits, unless a specific treatment is provided for by the Luxembourg Income Tax Law (loi modifiée du 4 décembre 1967 concernant l’impôt sur le revenu) or a double tax treaty. Taxable income of a company investing in a Luxembourg property comprises the total income realized on the property (i.e. rental income plus capital gains on disposal), less allocable expenses. Allocable expenses include property tax, depreciation, maintenance, repair costs and interest on loans to acquire the property.

Property is depreciable (with the exception of land) on a straight-line basis. The acquisition cost, including related expenses such as registration duties, the notary’s fees, etc. but excluding subsidies, forms the basis for depreciation. Depreciation rates are based on the useful life of the assets and vary between 2% and 4% for a new building, or even more for older buildings. Industrial buildings are generally depreciated at 4%. Separate depreciation at a higher rate may be applicable for certain components of the property (i.e. lifts or elevators, air-conditioning installations, etc.).

Real estate companies are also subject to an annual net wealth tax at the rate of 0.5%. This tax is assessed on their worldwide net wealth (assets minus liabilities, i.e. basically the equity of the company) as of 1 January each year (based on the assets held on 31 December of the preceding year).

Tax transparent real estate companies, such as sociétés civiles immobilières, are in principle not subject to income tax. Thus, the income derived from these entities is in principle only taxed at the level of their investors.

Fees

The main costs include the transfer tax, VAT (if applicable), the Mortgage Registrar fees and the notary fees.