Almost 70% of Luxembourg’s residents own their homes. That is one of the highest percentages of homeownership in Europe. Although prices are very steep, owning a house in Luxembourg is clearly very attractive, particularly if you intend to live in the country for more than 2 years. Here are a few reasons why.
Reduced notarial fees
When you buy a property you need to pay notarial fees of 7% of the property price. However, in Luxembourg, the Government grants a tax allowance when buying a property. This tax allowance means that notarial fees are reduced to €100 for properties valued at up to €285,714 for a single person or €571,428 for a couple. This tax allowance applies if you buy that property to be your main residence for at least the first two years after the purchase. Plus, the capital gain accumulated on the sale of a primary residence is non-taxable.
Low property tax
Compared to other European countries, Luxembourg has one of the lowest property tax rates. The property tax varies between 0.7% and 1%, depending on location and property type.
Tax deductions on mortgage interests
If you buy real estate in Luxembourg, regardless of its destination, and you take up a mortgage to do it, you need to know that mortgage interests are tax- deductible. The deductible amount is up to €10,000 p.a. for childless couples. If the couple has children, the threshold can be raised by €2,000 per child.
A thriving economy
Luxembourg is one of the richest countries in the world, with a thriving economy. The population continues to grow but not enough is being built. There is a scarcity of homes, which makes real estate investments even more valuable. Luxembourg is also one of the most stable real estate markets in Europe. Thus, major crises, like the 2008 financial crash, tend to impact less the Luxembourg real estate market.
An accessible market
Investing in the Luxembourg real estate market is not restricted to real estate professionals. Luxembourg is an attractive market for investors who are looking forward to finance their real estate purchase through crowdfunding. If you intend is to invest in the Luxembourg market, consider a participatory investment in a real estate development.
