About Luxembourg
Luxembourg is a small country in northern Europe and its capital is Luxembourg. Luxembourg borders Germany, France and Belgium. This country has a population of 576,000, while 40% are non-native and foreigners. It is one of the richest countries in the world, and is the second richest country in the world. The area of Luxembourg is 2586 square kilometers. Luxembourg is one of the safest countries in Europe.
It is almost an expensive country, but it is very cheap to live in Luxembourg due to the income of people and the economic stability of the residents in this country. Taxes in this country are very low, about 22% to 29%, Since this country has a rich government and the wealth of the country. This country grants citizenship only by birth or marriage, otherwise it only issues a permanent residence permit (for several years).
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The requirements for getting a residence permit through buying a property in Luxembourg
You can obtain a permanent residence permit and citizenship for many countries by purchasing real estate. By having 500,000 euros you can invest and buy a property. (It should be noted that Luxembourg does not grant citizenship through the purchase of a property but you can obtain citizenship through work and investment)
Foreigners applying for a residence permit in Luxembourg must meet the following conditions:
Be at least 18 years old.
They must reside in Luxembourg for at least five consecutive years.
They must be fluent in at least one of the three official languages of Luxembourg (German, French, Luxembourgish)
Buy a property in Luxembourg worth at least 500,000 euros
They must pass the citizenship courses
Invest at least € 500,000 – in a company in Luxembourg (with business, industrial or handicraft activities) and they must commit that they are going to create at least 5 jobs in the next three years
Property prices in Luxembourg
Some buyers may be disappointed from the high prices of properties in Luxembourg, while the market is no longer booming, prices continue to be high in the form of transaction costs.
While the government provides assistance and quotas for home buyers, house deposits in Luxembourg are about 20–25% higher than in European countries, and You also have to take into consideration the additional property tax above the purchase price.
The average price per square meter of property in Luxembourg is around 4,518 euros. The capital city typically has the highest prices (€ 6,001 per square meter), close to Bertrange (€ 5,773) and Strassen (€ 5,633). According to government figures, a Suite without a bedroom in Luxembourg costs around € 250,000, a two-bedroom apartment is around € 395,000 and a four-bedroom family house is around € 665,000.
Capital gains tax also applies if you sell your property within two years. However, if you sell your property after two years, the amount reduces to half. Thus foreigners with short-term investment plans can rethink the benefits of purchasing property in Luxembourg.
Legal requirements for buying a property in Luxembourg
When you agree to buy a house, you will sign a contract (Promesse de Vente / Vertrag).
This agreement includes:
The name of both parties to the contract (buyer – seller)
Addresses of both parties
Details of the sale of the property and the terms of payment (for example, a contract stating that you cannot secure a mortgage. Your contract often includes the date you will occupy the house).
The sales agreement must be registered with the Registration Administration within three months of the transaction being approved. This contract is a legal document, so if the purchase fails, the parties can file a lawsuit and take legal action.
Funding the purchase of property (deposits and mortgages)
Luxembourg is one of the major financial center, although only a small percentage of banks deal with day-to-day or small investment banking. Most banks offer mortgages, but some banks insist that you already have a current account with them.
It is noteworthy that Luxembourg has one of the most stable systems in terms of economyand banking.
When you apply for a mortgage to buy a property in Luxembourg, a surveyor will be sent to evaluate the property, which you will have to pay for it separately and then the requested loan will be approved.
Once you have you agree to buy the property, you must also pay a deposit. The amount you pay depends on the mortgage you are applying for, but this amount does not exceed from 25% of the deposit.
A notary in Luxembourg is required to manage, record and track all property transactions. The notary fee is determined by law and is about 1.5% of the value of the property.
Registration tax (or land transfer tax) will be one of your biggest expenses when purchasing a home. The registration tax is 6% of the value of the property, with an additional 1% transcript tax added on top. only applies if you exceed the tax-free allowance of € 20,000 (for one person) or € 40,000 (for a couple).
The whole process (buying a property in Luxembourg) is as follows:
Buy property
Estate agent: immobilier – Makler
Bank Deposit (Caution): Kaution
Mortgage: hypothèque
Commute (Being present in Luxembourg consecutively): Pendlen
5 years of presence
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