Real estate transaction costs and taxes in Luxembourg

Cost

N/A

VAT

N/A

Cost

Time-based cost plus out-of-pocket expenses (e.g. for administrative fees, copies) plus administrative fees in case of public procedure. Variable

VAT

17%

Cost

• Land registry extract: EUR 3 per page.
• Mortgage registry extract: EUR 0.75 per page.

VAT

17%

Cost

No charge for online search (Luxembourg Trade and Companies Register website). Official electronic extract from the Trade and Companies Register is EUR 12.20.

VAT

17% included in the extract price

Cost

Variable: depending on value of the property.

VAT

17%

Cost

Depends on location of the land and use of the land.

VAT

17%

Cost

General rule: VAT exempt (under certain conditions the parties may opt to submit the sale to VAT).

VAT

17% only if there is an option to submit the sale to VAT.

Cost

The disposal of a real estate property is subject to a proportional 6 % Luxembourg registration duty “droit d’enregistrement” (and 7.2 % in case of acquisition for the purpose of resale). There are also 1 % of transcription tax and a communal surcharge of 3% or 3.6% if the property is located in Luxembourg-City. These rates apply over the sale price whether it includes or not VAT.

If the transfer of shares is submitted to a notarial deed, which is not mandatory, there is a registration duty of EUR 12.

Sale by a corporation: capital gains realised by a Luxembourg company on the disposal of a real estate property located in Luxembourg should, in principle, be subject to Luxembourg corporate income tax at an aggregate rate of 26,01 % (for a company situated in Luxembourg-City). Sale by an individual: the sale of the individual’s main residence is tax exempt. For the sale of real estate other than main residence, capital gains are subject to progressive income tax rate (up to 42 %) if the real estate is sold within two years of its acquisition. After two years of the acquisition, the individual may benefit from a reduced tax rate corresponding to half the progressive income tax rate (i.e. an effective tax rate of 21%) . Until the end of year 2018, this rate is reduced to 1/4 of the progressive income tax rate, i.e. an effective tax rate of 10,5% (temporary measures). A tax relief of up to EUR 50,000 (doubled for married taxpayers collectively taxed within the meaning of article 3 of the Luxembourg income tax law) for gains realized in a 10-year period may be claimed. Furthermore, the tax deduction can be increased by €75,000 if the property was obtained by inheritance (direct line).

Sale by a corporation: capital gains realised by a Luxembourg company on the disposal of shares in a Luxembourg resident company are, in principle, subject to Luxembourg corporate income tax at an aggregate rate of 26,01 % (Luxembourg-City) - however, an income tax exemption may be available subject to application of the Luxembourg participation exemption.
Sale by an individual: capital gains realised for the disposal of a shareholding within six months is subject to progressive income tax rate (up to 42 %). After six months of shareholding, capital gains on the disposal are tax exempt if the individual holds less than 10 %. If the individual holds more than 10 %, capital gains are subject to a reduced tax rate corresponding to half the progressive income tax rate, i.e., up to 21%). A tax relief of up to EUR 50,000 (doubled for married taxpayers collectively taxed within the meaning of article 3 of the Luxembourg income tax law) for gains realized in a 10-year period may be claimed.