Felten & Associés
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
Yes, Foreigners can buy, own and sell real estate and can hold shares in property owning companies. There is no restriction on foreigners owning or occupying real estate.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
No, there is no restriction. Foreign companies have just to satisfy the AML requirements and have to disclose their ultimate beneficial owners.
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The purchase of real estate located in Luxembourg is subject to a registration duty assessed on the purchase price or the effective value of the property should the purchase price be lower than the market value.
The registration duty amounts to 6% and in Luxembourg City a municipal surcharge of 3% is added in certain cases.
A 1% transcription duty is to be paid for any transfer of real estate.
Transfers of real estate are exempt from VAT except the transfer of a property before building has started and when a VAT option has been filed in certain cases.
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?
A very low annual municipal tax has to be paid yearly by the owner on all real estates.
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?
There is no tax break or other incentive for foreigners to buy real estate. Capital gain taxes have to be paid in Luxembourg by foreigners selling real estate. Tax can be mitigated by using a tax efficient structure as the case may be.
How is the ownership of Real Estate evidenced in your jurisdiction?
A notarial deed is required for any transfer of real estate. The transfer of title is recorded at the mortgage register (Bureau des Hypothèques). The mortgage register is public.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
It is possible to keep the identity of owners of real estate confidential in Luxembourg, but only under the condition that the buyer is a company, the ownership of which shall become transparent in 2018 as soon as the forth EU AML directive is implemented.