Notary deeds: what you need to know (athome.lu)

As you start looking for a property to buy, you certainly wish it well located, well structured and especially it has to turn into the place where you’ll be feeling good!

Another of the main criteria you will be taking into account is certainly the price. Beside this, you shall never forget that some additional costs result from buying a real estate, such as legal fees and notary deeds.

Many people have been asking what this stands for and so let us go through this topic which you will end up being confronted with as soon as you buy a real estate!

The notary guarantees the quality of the property

Anytime a real estate is sold, the final transaction is preceded by a “compromise”. Even though this document is not mandatory, it still defines the way two parties (buyer and seller) are entering into a partnership to finalize the purchase of that property. This document also provides the buyer with all necessary guarantees to start seeking for bank financing.

As for the notary, this compromise represents the starting point of his researches to identify any mortgage eventually interesting that same property. The notary will hence be checking the quality of the seller, the existence of any mortgage, encumbrances and other charges.

Only once this process is completed, the buyer is assured that he is buying that real estate free of any mortgage and encumbrance. 

The calculation of the legal fees

The so-called notary deeds are composed by a series of different entries. The first are the taxes or fees due to the Treasury. The notary is cashing these fees by acting for the government. These amounts result from the application of registration fees, transfer taxes, the value added tax (VAT) and some more. 

The second entry is generated by a series of expenses to be reimbursed to the notary for the work carried out in order to check the existence of any mortgage by extracting info from the cadastre, the provision of administrative documents, rental management, consultancy provided by any expert etc.

The last entry results from the fees to be paid to the notary, amounts that correspond to the work the notary did and that are fixed by special regulations. These fees are due for his negotiation of the property (if applicable), deeds, mortgages etc. 

Only this last entry represents a real fee paid to the notary, while all other items are actually due to the government or for any expenses that may have occurred as the notary assisted the buyer during that transaction. 

As an example, let’s check the fees due for a property whose price stands at 500’000 € without any fiscal deduction:

-       The so-called registration fees would stand at 35’000 €;

-       Notary deeds would stand at 1’650 €.

You shall not forget that to these amounts other fees are to be added, such as VAT, handling charges, the expenses resulting from an eventual proxy, etc. 

(Source : http://www.cgoedert.lu/)

“Bëllegen Akt” or how to reduce the costs of notary acts (as per the corresponding act passed on July 30, 2002)

For the acquisition of any property (house, apartment, ground) the normal rate applied stands at 7%, whose breakdown reads as follows: 6% registration fees and 1% transaction rights.

The government has introduced a special measure to reduce the costs resulting from any real estate transaction; this deduction applies to anyone who is interested in buying a property (including annexes) where they will eventually settle down. This credit stands at 20’000 € per buyer and the amount is eventually doubled for a couple since that credit is individually applied to each buyer. In all cases, a minimum of 100 € is due as registration fees. It shall be noted that this credit may be paid at once or progressively in case the registration fees and all other costs do not reach that maximum threshold. The outstanding credit may be used at a later stage for additional payments. 

A notary for every transaction

You may have understood that a notary is one of the key stakeholders when it comes to real estate. The notary will be there to finalize the sale of that property but also to assist and support you in the various steps of this process.  

There is no special guideline for you to choose the right notary. You may pick him out because of geographical reasons, his reputation, for having been recommended by somebody you trust or because you already had the chance to work together.

36 notaries are currently active in the Grand Duchy distributed across all cantons (except for Vianden) by taking into consideration the density of the population as well as the business that is being generated in the various administrative units.

If you are still looking for a notary, you may check the exhaustive list available at www.notariat.lu