If you’re planning to buy an apartment or a house in Luxembourg, you’ll most likely be eligible for the Bëllegen Akt. This tax credit, which essentially presents itself as a reduction on notary fees, is accessible to Luxembourg residents as well as those coming from elsewhere, provided they’re purchasing to settle in the country. What are the conditions to benefit from the Bëllegen Akt and how does the scheme apply? Our explanations.
Who can benefit from the Bëllegen Akt?
In several configurations, you can benefit from a reduction on your notary fees under the Bëllegen Akt. Very concretely, you must purchase a property to live in. You’re not obligated to be of Luxembourg origin: the aid is granted to individuals who are not yet residents and are coming to settle in the country.
If you’re living in a country outside the European Economic Area before buying, you can still obtain this tax credit.”
If you’re living in a country outside the European Economic Area before buying, you can still obtain this tax credit. To do so, you simply need to provide a residence certificate in Luxembourg once you’ve moved in.
For your information, this aid isn’t dependent on income conditions or restrictions related to the value of the property in question. Although the Bëllegen Akt can be granted for all types of housing (new or to be built, building land) and built outbuildings (garages, sheds, etc.), it excludes second homes, weekend houses, or properties intended for rental/commercial use.
What is the Bëllegen Akt?
When you acquire real estate in Luxembourg, you pay a flat rate that applies to notarial deeds. The normal rate, set at 7%, is divided as follows:
- 6% for registration duties
- 1% for transcription duties
Up to €40,000 per purchaser, this tax credit can logically amount to €80,000 for a couple.
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When you benefit from this scheme, you must commit to occupying the purchased property within 2 years of acquisition – or up to 4 years for the acquisition of a property in VEFA (Sale in Future State of Completion) or building land. Once you’ve moved in, you must also reside on-site for a minimum of two years, continuously.
Most often, buyers take advantage of the Bëllegen Akt in the context of a real estate sale. But it’s important to specify that this reduction on notary fees remains accessible in other cases: auction, forced sale, division, or exchange with capital gains.
How to use the Bëllegen Akt?
The tax credit on notarial deeds can be used all at once. But if you prefer, you can also use it as needed, until it’s completely depleted. This can be interesting if you make an initial acquisition that remains below the legal limit, and then make another purchase afterwards.
Bëllegen Akt: How to benefit from a waiver of occupancy?
In theory, when you’ve obtained a tax credit on notarial deeds, you must reside in the accommodation for two years before selling it. However, there are configurations in which you can claim a waiver of occupancy: force majeure, illness preventing living on-site, forced sale, expropriation for reasons of public utility, death of the spouse, or divorce.
Do you want to benefit from the Bëllegen Akt as part of your purchase project? Don’t hesitate to discuss it with your real estate agent; they will guide you through the steps to compile your file.
