planning rules) the registration
duties are assessed only on the land
(unless a VAT option at the normal rate has
been exercised). The registration duties are payable upon
registration of the transfer of the property with the register of
mortgages.
•
A transcription tax (
droit de transcription
), levied at the rate
of 1%, is also due on the notarial deed. For Luxembourg-City, a
surcharge of 50% is added to the amount of the registration
duties levied by the Luxembourg registry (
Administration de
l’Enregistrement et des Domaines
) for the properties transfer-
red other than residential housing.
•
In principle, the acquisition of a property located in Luxem-
bourg - or related rights - is exempt from VAT. However,
the acquisition of properties that are under construction is
subject to VAT on the completed part of the construction at
the normal VAT rate. VAT is levied at the standard rate of 15%
and assessed, in principle, on the purchase price. The rent of
properties is a VAT exempt activity except in case of properties
used for commercial purposes, when a joint VAT option has
been exercised.
•
In addition, notary fees are levied at a proportional rate deter-
mined on the basis of the purchase price (with a maximum
threshold).
Î
acquisition of shares in a company holding a
property
Contribution of a property located in Luxembourg
•
The contribution of a property located in Luxembourg to a
corporation or a partnership is subject to a reduced registra-
tion duty of 0.6% (plus a municipal surcharge of 50%, where
applicable) and a reduced transcription duty of 0.5% when
such contribution is in exchange for shares.
Companies investing predominantly in real estate
(special purpose vehicles (SPV))
•
From a tax perspective, the transfer of shares in a company
holding a property located in Luxembourg should not impact
the ownership of the property. Therefore, no registration or
transcription duties should be due.
•
The disposal of the shares held in the share capital of an SPV
is not subject to any Luxembourg indirect tax (including stamp
duty) if such disposal is not recorded in a Luxembourg notarial
deed. When a share purchase agreement is submitted to regis-
tration voluntarily, a fixed registration duty of EUR 12 will apply.
Investor Guide to Europe 2014 | 63
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