Tax credit on notarial instruments ('Bëllegen Akt')

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Summary:

If you buy a house, an apartment or a plot of land in Luxembourg that you intend to use as your own home for a period of at least two years, subject to certain conditions, you may be eligible for a tax credit (referred to as 'Bëllegen Akt' in Luxembourgish).

The notary will request the tax credit at the time of signing of the notarial deed.

Tax credit on notarial deeds
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In Luxembourg, the standard tax rate for the purchase of a real-estate property (house, apartment, buildable land) is 7%, of which:

  • 6% is for registration fees; and
  • 1% for transcription fees.

To reduce the incidental expenses associated with the purchase of a dwelling, the Government has introduced a tax allowance (referred to as a tax credit, or 'Bëllegen Akt' in Luxembourgish) on registration and transcription fees for anyone wishing to purchase a building (and certain outbuildings and attachments) for use as their personal residence.

This tax credit is limited to EUR 40,000 per person and is subject to effective and personal occupancy of the property.

In any case, the Registration Duties, Estates and VAT Authority (Administration de l'enregistrement, des domaines et de la TVA – AED) will collect a minimum of EUR 100 in registration and transcription fees.

Who is concerned

Persons concerned

The tax credit can be granted to natural persons who:

  • want to acquire a property to use as their own home;
  • at the time of signing the notarial deed:
    • are resident in Luxembourg and registered with a commune's census bureau;
    • are not resident in Luxembourg but who undertake to move into the purchased property in Luxembourg.

Persons who live in a country in the European Economic Area (EEA):

  • are treated in the same way as Luxembourg residents;
  • are not required to pay the registration and transcription fees in advance and subsequently request a refund;
  • automatically benefit from the tax credit, provided they have requested it when signing the notarial deed.

The tax credit will only be granted to persons residing in a third country once the buyer is able to produce a certificate of residence in Luxembourg.

No conditions in terms of wealth, value of the building, cadastral income, or buyer's income are taken into account.

Acquisitions concerned

This tax reduction may be granted in the event of the acquisition of a property or fractions of a property by means of a(n):

  • sale;
  • auction sale;
  • auction (public sale to end an indivision);
  • sharing with returns or capital gains;
  • exchange with returns or capital gains;
  • constitution or alienation of the emphyteutic lease or the building right.

Acquisitions made by means of donations or inheritances are not covered.

Buildings concerned

The tax credit is granted for:

  • building plots located in a residential area:
    • on which a building can be built immediately by virtue of a building regulation;
    • intended to serve as the main, personal and effective residence of the owner;
  • dwellings intended to serve as the main, personal and effective residence of the owner, and also buildings under construction;
  • outbuildings (garages, sheds, barns) or other additions (gardens) which adjoin or are separate from the main residential building, but located close to it.

Not included are:

  • secondary residences;
  • weekend homes;
  • buildings intended for rental and trade.

How to proceed

Submitting the application

The notary will request the tax credit at the time of signing of the notarial deed.

The law of 22 May 2024 amending the amended law of 30 July 2002 determining various tax measures designed to encourage the marketing and acquisition of building land and residential property has temporarily increased the tax credit ceiling from EUR 30,000 to EUR 40,000. This increase only applies to the purchase of property where the notarial deed is signed between 1 January 2024 and 30 June 2025.

There are a number of situations in which the additional tax credit (maximum EUR 10,000) can be claimed retroactively to 1 January 2024:

  • You made a tax credit claim in the notarial deed of purchase and an additional tax credit is due.

    In this case, the Registration Duties, Estates and VAT Authority (AED) has provided for a procedure where the refund is paid directly to the buyer's account. You can download the refund application form from 'Online services and forms' or on the AED website. You must return the signed form to the AED for checking and payment.

  • You did not apply for the tax credit in the notarial deed because you had used up the maximum amount of EUR 30,000 in force at the time of signing the notarial deed.

    In this case, you can claim a refund of the additional tax credit. To do this, you must first sign a supplementary notarial deed containing the items listed below under 'Supporting documents'.

The law of 16 May 2023 amending the amended law of 30 July 2002 determining various tax measures designed to encourage the marketing and acquisition of building land and residential property increased the tax credit ceiling from EUR 20,000 to EUR 30,000.

There are a number of situations in which the additional tax credit (maximum EUR 10,000) can be claimed retroactively to 7 March 2023:

  • You made a tax credit claim in the notarial deed of purchase and an additional tax credit is due.

    In this case, the Registration Duties, Estates and VAT Authority (AED) has provided for a procedure where the refund is paid directly to the buyer's account. You can download the refund application form from 'Online services and forms' or on the AED website. You must return the signed form to the AED for checking and payment.

  • You did not apply for the tax credit in the notarial deed because you had used up the maximum amount of EUR 20,000 in force at the time of signing the notarial deed.

    In this case, you can claim a refund of the additional tax credit. To do this, you must first sign a supplementary notarial deed containing the items listed below under 'Supporting documents'.

Supporting documents

To qualify for the tax credit, the notarial deed must contain:

  • the corresponding request from the person who bought the property;
  • the undertaking from the person who bought the property;
    • to personally inhabit the property within 2 or 4 years from the date of the notarial deed and for an uninterrupted period of at least 2 years;
    • not to use it for any other purpose during this period;
    • to reimburse the amount of the allowance in the event of non-compliance with the conditions;
  • the undertaking on the part of the buyer to declare in writing, to the AED, within 3 months, any transfer or change in the intended use of the property in question.

Obligations

You, as owner, undertake to effectively and personally occupy the property acquired:

  • within a time limit of:
    • 2 years from the date of the notarial deed of acquisition;
    • 4 years in the event of the acquisition of a building plot or a building under construction;
  • for a continuous period of at least 2 years.

You may send the director of the AED a written and reasoned request for an extension of the occupancy deadline.

Reimbursement of the tax credit

You must repay the allowance granted in full, with interest at the legal rate from the date of grant if, before the completion of the 2 years of occupation, you:

  • rent out the property, even if only part of it;
  • transfer the property;
  • cease to reside in the property.

Exemption from the occupancy clause

You may submit a request to the AED for exemption from the occupancy clause. The exemption of occupation may be granted:

  • in case of force majeure; or
  • due to:
    • an illness suffered by the person who purchased the property that makes it impossible for them to live in the property, as duly attested by a medical certificate;
    • the forced sale of the building;
    • expropriation for reasons of public utility;
    • death of the spouse;
    • divorce or dissolution of the legal partnership.

The signing of a preliminary sales agreement results in the immediate transfer of ownership of the property. The 2-year occupancy period is not respected in the event of the signature of a sales agreement before the expiry of this period.

However, it is possible to postpone the time of transfer of ownership of the property to the day the notarial deed is signed. In this case, a special clause is inserted into the sales agreement, such as: 'ownership of the building will be transferred on the date on which the authentic instrument is signed'.

If there is such a clause, the 2-year period will be considered to have been observed even if the agreement is signed before the term expires, provided that the authenticated instrument is signed after the 2-year term.

After 2 years of occupancy, you are free to sell, transfer or rent out your property.

Exemption from reimbursement

You may also apply for an exemption from reimbursement if you are obliged:

  • to interrupt the occupation of your building;
  • to transfer your place of residence for professional reasons beyond your control.

The request for exemption:

  • must be sent to the AED;
  • may be granted on condition that the occupation of the building is resumed:
    • upon your return;
    • until the end of the total 2-year occupation period.

Consulting the remaining tax credit balance

Click on the link below to view the remaining tax credit balance on notarial deeds via your MyGuichet.lu private eSpace:

Tax credit on notarial deeds

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Amount

The tax credit:

  • is limited to EUR 40,000 per person;
  • can be used all at once;
  • in the event that the registration and transcription fees due on an acquisition do not reach the total amount of the tax credit, the balance may be used as needed for other acquisitions until it is exhausted.

Online services and forms

Online services

Tax credit on notarial deeds

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Land register

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Downloadable forms

Note: view tips for using PDF forms.

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Who to contact

2 of 14 bodies shown

Registration Duties, Estates and VAT Authority

2 of 14 bodies shown

Related procedures and links

Links

Further information

Legal references

  • Loi modifiée du 30 juillet 2002

    déterminant différentes mesures fiscales destinées à encourager la mise sur le marché et l’acquisition de terrains à bâtir et d’immeubles d’habitation

  • Loi modifiée du 22 octobre 2008

    portant: 1. promotion de l’habitat et création d’un pacte logement avec les communes, 2. sur le droit d’emphytéose et le droit de superficie

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