My finances, my projects, my life
March 29, 2023

Costs to consider when buying property

  Compiled by myLIFE team myHOME April 16, 2020 743

Hunting for real estate can be a tedious and time-consuming task. Looking through ads, going to inspections, making comparisons; you tend to focus your attention on the property, its location and the purchase price. However, purchasing a property can give rise to whole series of varying costs, which can add up fast. myLIFE has summarised them here to help you prepare.

Are you planning to buy property soon? Congratulations! But before you spend every last penny on your new home, spare a thought for the additional costs that come with this kind of investment. These costs could come as a real shock if they’re not properly calculated and budgeted for. Notary and registration fees, interest on your home loan, co-ownership charges, property renovation costs, local taxes – the list goes on.

Notary and registration fees

Notary: the key player in any real estate purchase. Notary fees are generally paid by the buyer, according to a statutory proportional rate on a sliding scale. The fees comprise three separate elements:

  • Taxes payable to the government. The notary is your official intermediary for the collection of taxes to be paid to the State, namely registration and transcription fees owing to the Luxembourg Registration Duties, Estates and VAT Authority (i.e. 7% of the property’s value), VAT or transfer fees.
  • The reimbursement of costs incurred. The notary incurs fees when accessing the information they need in order to prepare the deed: land registry excerpts, mortgage guarantees (see below), administrative documents, etc.
  • Notary fees. This is the actual remuneration of the notary and their office. These fees are set by Grand-Ducal regulation.

Good news! If you’re purchasing your primary residence, you are entitled to a tax credit for notarised deeds, provided that you personally live in the property within two years of the purchase, and for at least two years. This tax credit applies to registration and transcription fees. It represents a rebate of €20,000 per buyer on the value of the asset, with a minimum payment to the Luxembourg Registry of €100. You can carry out a simulation to calculate your precise registration and notary fees.

Mortgage fees

If you plan to take out a home loan to finance your property purchase, you’ll have to pay mortgage fees. Your bank will need to attach a mortgage to your property, so that it can sell it and recover its investment if you’re unable to pay back your loan. Given that a mortgage must be registered by notarised deed with a Mortgage Registry, this will incur fees.

For example, interest on a 20-year home loan of €400,000 at a fixed rate of 2.00% will amount to around €85,650.

Interest on your home loan

For most of us, buying property wouldn’t be possible without a home loan. And where there’s a loan, there’s interest. The amount of this interest will depend on a range of factors, including your risk profile, the interest rate, and the term of the loan.

For example, interest on a 20-year home loan of €400,000 at a fixed rate of 2.00% will amount to around €85,650. Even if interest payments are spread out over time, this is still a considerable amount; a reminder that borrowing money also costs money.


Although it’s not a legal obligation, your bank will strongly insist – or even demand – that you take out credit protection insurance and home insurance as a loan condition.

Why do I need credit protection insurance? This functions as a sort of life (or disability) insurance throughout the repayment term of your home loan. To prevent any financial burden being transferred to your loved ones in the event of your death, the balance on your loan will be repaid by the insurance company managing the policy.

You benefit from a tax abatement on the regular premiums of your credit protection insurance (along with interest on other non-mortgage loans) of €672 per year and per person forming part of the tax household. If you’re able to spread the payments of your credit protection insurance out over time, choosing a single premium can be more attractive. It is only deductible for the year in which the premium is paid, but may be subject to an increased limit, which is higher according to your age, tax class and family situation.

Administrative fees

Putting a loan application together can cost your bank money. It will therefore generally charge you a modest administrative fee. Sometimes this fee is covered by the bank as part of a marketing campaign, or as a goodwill gesture.

Although the agency is free to set its fees, in Luxembourg they usually sit at around 3% of the property’s sale price.

Agency fees

In principle, the seller automatically pays the agency fees, as it was the seller who sought professional expertise for the sale of their property. Agency fees are included in the sale price presented in the property listing. Although the agency is free to set the amount of its fees, in Luxembourg they usually sit at around 3% of the property’s sale price, well below rates in France or Germany.

Occasionally, it may be the buyer who enlists the services of a real estate agent to help them look for a property. If this is you, you’ll need to pay the corresponding fees for the service provided, from the search for your perfect property, to the preparation of your application and the sale itself.

In some rare cases, agency fees are shared between the buyer and the seller. In this case, it will be stated on the listing.

Renovation and consequential costs

When buying property, it’s important to always take into account the cost of setting up and updating the property to your taste: moving costs, new furniture, painting, etc.

If you buy an old property, you might need to make a few renovations, too. Buying a new kitchen, replacing a boiler, or insulating the roof can represent significant investments. Make sure you include them in your budget!

Co-ownership charges

Have you opted for co-ownership ? Find out about the charges, and be sure to ask about any future non-recurring expenses anticipated by the co-ownership (roof, electricity, etc.). Even your small share in these charges can have a big impact on your budget. Also be sure to find out about expenses recently approved at a general meeting, as these may be charged to the buyer rather than the seller. In fact, the date applied is not the date of the general meeting, but rather the date on which the co-owners’ association notifies the owners of the expense.

A real estate purchase gives rise to a whole series of costs, which can sometimes be quite hefty. The list provided below is not exhaustive. We could have also covered land and housing taxes, local rates, and other fees for waste collection services. myLIFE’s main objective is to highlight the need to take all of these elements into account when calculating your budget. To get a more precise overview of your situation, feel free to perform simulations to calculate the total purchase cost and your monthly instalments. Good luck!