What are the conditions to benefit of a tax credit.jpg

The purchaser must declare in writing to the administration, within 3 months, any transfer or change of mission of the building concerned. That is to say, the purchaser must respect certain conditions such as :

- Personal occupation of the property concerned for 2 years from the date of signing the notarial deed.
- No renting during the 2 years nor installation of office or the person exercises his professional trade (except exception)
- Illness.
- Death of the spouse or divorce.
- Forced sale of the property.
- Expropriation for public utility.

And depending on the financial situation of the client, with all the expenses that he needs to finance. It is also possible not to use the entire sum of 20,000 €, and could leave part of his credit for a later purchase.

## Is there a specific regime?

Yes, in case if the client intends to resell, it is necessary to inform the notary when signing the notarial deed, in fact this avoids the client to pay the 1% rate of the transcription right.

### Refund of registration and transcription fees

If a person buys a property and sells it within 2 years, he/she gets back 6% of the registration and transcription fee.

And if a person buys a property and resells it within 4 years, he/she will get back 4.8%.

## Are there any special cases for the payment of registration fees?

Yes, when it comes to the sale (VEFA) of new constructions. For example, if the existing construction is at 40%, the client will pay in relation to what already exists, i.e. 40% too. Regarding the tax credit for VEFA the deadline for repayment is longer than an existing property, it is 4 years and there is a possibility to extend. And everything concerning the VEFA, there is no compromise, but rather a contract of reservation

## Is there a municipal surcharge for living in the territory of the city of Luxembourg?

Persons living on the territory of the city of Luxembourg, by sale or exchange, donation or similar acts, are affected by a tax equal to 50% of the registration fees redus. That is to say, the 6% registration fee + 1% registration fee + the 3% redus registration fee: total = 10%.

**Exception: single family homes.**

What are the conditions to benefit of a tax credit?

The purchaser must declare in writing to the administration, within 3 months...

What is a General Development Plan.jpg

The general development plan is elaborated by the municipality, with a preparatory study, not regulatory, it becomes regulatory once, it goes through an adaptation procedure with a public inquiry.  

It is compulsory and covers the whole territory of a municipality, it defines the use of the ground and it is composed of a set of graphic and written criteria. 

## What are the objectives of a general development plan?

The purpose of the general development plan is the harmonious implementation and installation of human activities on the communal territory and to guarantee a sustainable development for the commune.

Only the council of mayors and aldermen can take the decision to modify or revise the general development plan.  

## What is the content of the general development plan?

The general development plan divides the municipal territory into 

- urbanized areas or areas intended to be urbanized 
- zones intended to remain free green zone 

The general development plan therefore makes a clear distinction between buildable and non-buildable areas, and defines for each area the mode of land use, provides information on the function allowed to be located on the part of the territory of the commune. 

## Are there degrees of land use?

The degree of land use makes it possible to measure the buildable density. 

It is expressed by 4 coefficients for the zone subject to a particular development plan (new district)

- Density of housing
- Land use coefficient 
- Land use coefficients
- Soil Sealing Coefficient

These coefficients are represented in a table called (schematic representation of the degree of land use) accompanying the area subject to the development of a specific development plan (new neighborhood) on the graphic part of the general development plan. 

The development zones differ:
- area that is temporarily off limits to construction  
- land reserve 

The following types of zones are distinguished:

- Base zones that define the building mode functions. 
- Overlay zones assign easements to the basic zones in order to guide or refine urban development.
- Zones or spaces defined in execution of specific legal and regulatory provisions. They indicate the presence of regulatory provisions from other legislation that have an impact on urban development. 
These zones, they only indicate the developer by a thick discontinuous line of color 

## What are the effects of the General Development Plan?

**1. Prohibitions that may affect the immovable during the preparation of a general development plan (Optional servitude)**   
During studies or works planned to establish or modify a general development plan, only the communal council can decide, under the authorization of the minister, that all or part of the buildings affected by the plan concerned be affected by an easement of prohibition of modification. 
The duration is 1 year, and an extension is possible, maximum 2x of 1 year, anticipated interruption on the motivated decision of the communal council. 

The decision of the municipal council and the minister is published in the memorial at the municipal house by means of posters, also on the website of the municipality, as well as on the 4 daily newspapers printed in the Grand Duchy of Luxembourg. 

**There is a possibility to appeal to the administrative court.
During this period, only maintenance and repair works are allowed.**

**2. A provisional easement during the plan adoption process from the time the Common Council decides to initiate the General Development Plan approval process.**
 
- Any alteration of the boundaries of a property for the purpose of construction.
- Any additional construction or repair.
- Any work of any kind that is contrary to the provisions of the draft general development plan.

To summarize, in order to obtain building approval for a construction project during the General Plan adoption process, the planned work must be consistent with the current General Plan and the Draft General Plan process. 
It is important to ensure that all necessary information is obtained before developing a construction project based on a 1937 General Development Plan. in relation to when the municipality intends to introduce its amendment to the General Development Plan in the adoption procedure (**easements become final when the General Development Plan comes into force**) 

**3. Compensation** 

The right to make a claim for compensation due to easements arising from a general development plan is set at 5 years after the entry into force of the general development plan that created them.

Compensation may be granted if these easements result in an infringement of acquired rights or a material modification of the previous state of the premises determining a direct, material and certain damage.

 What is a General Development Plan?

The purpose of the general development plan is the harmonious implementation and installation of human activities on the communal territory 

What is communal planning and urban development.jpg

What do we mean by municipal planning? This communal planning and organization of the communal territory allows in general to take into account the particularities of the various parts of the communal territory and it is guided by the master plan of land use.

It includes the provisions and objectives of the RGD and makes mandatory the sectoral master plans and land use plans, while remaining consistent with the law of April 17, 2018 in relation to land use planning when we have such a measure shows necessary. 

With regard to urban development, it is the set of objectives and approaches and other measures necessary to guide and direct the evolution of localities and cities taking into account their popular, ecological, economic, social, cultural, financial and spatial resources that create the general framework. 

## What are the objectives of communal planning & urban development?

Their missions or objectives are to guarantee the respect of the general interest by ensuring the population optimal living conditions by a harmonious development of all the communal territories. 

**The more detailed objectives are as follows:**

- an efficient use of land and space, both urban and agricultural, ensuring complementarity between economic, ecological and social objectives 
- harmonious development of urban and rural structures, including communication and service networks, and provision of structures in accordance with the objectives of general spatial planning 
- a careful use of energy, saving energy or rather using renewable energies. 
- development of urban and rural structures with a mix of capacity to improve the quality of life of populations and the urban quality of the locality. 
- the respect of the protection of the natural environment and the landscape in the pursuit of the objectives
- the guarantee of public safety and hygiene. 

What are the objectives of communal planning & urban development ?

Their objectives are to guarantee the respect of the general interest by ensuring the population optimal living conditions...

What are the objectives of land use planning.jpg

The aim of spatial planning is to ensure respect and general interest by providing the population with a stable standard of living and optimal conditions, and to enhance sustainable development concerning all parts of the national territory. 

The Land Use Plans observes and monitors territorial development and ensures that sectoral, communal or inter-communal, national, cross-border and international policies that have an impact on territorial development.

**There are 2 categories of Land Use Plans:**
- a master land use plan
- a sectoral master plan

The master land use plan was developed for the overall transportation concept and geographic development. 

And the sectoral master plan, it is more about everything that is legal and land use plans. 

## Definition Master Plan for Land Use Planning

It defined an integration strategy for sectoral programs that have an impact on territorial development

## What are the fields of action of the master plan for land use planning?

The master plan for land use planning adapts an integrated approach to land use planning and develops links with the following fields of action 

- urban and rural development
- transport and telecommunications
- environment and natural resources

## Definition Development and Attraction Center System

The Development and Attraction Center is a system of urban centers or localities, which are so well-equipped with public or private services that they are able to provide a more or less important supply function, not only for themselves, but also for their hinterland. 

The Development and Attraction Center systems are classified in a hierarchical manner according to their importance and performance. 

Here is one way in which they are classified: 

- top order (the city of Luxembourg)
- middle order (Esch/alzette)
- regional centers (e.g. Mersch, Redange) 

## WHAT IS THE CONCEPT OF TRANSPORT AND DEVELOPMENT?

A study presented by the government was developed in January 2004, to analyze the impact of sustained economic and demographic growth, as well as for the organization of transport in order to evolve a medium and long term strategy to better combine land use planning, and also for the planning of transport and protection of natural areas.     


## WHAT IMPACT DO SECTORAL MASTER PLANS HAVE?

The sectoral master plans have a direct impact on the territorial organization and land use at the national level, and consequently, the instruments to set up the spatial development of Luxembourg in the medium and long term.

The sectoral master plan is mandatory by the Grand Ducal Regulation that came into force **on March 1, 2021**, which includes written or graphic requirements that can: 

- Prohibit or limit the possibility of the municipalities to designate or proceed to the extension of urbanized areas or intended to be urbanized. 
- Restrict the choice of municipalities to the land use patterns to be planned.
- Prohibit the designation or extension of additional areas of a given land use pattern. 
- May require reclassification of areas allocated to an orderly use pattern.
- Imposes a prohibition or limitation on building, construction or linear facilities.  

**There are two types of sectoral master plans:**

- Primary sectoral master plans → these plans are drawn up in the areas of transportation, housing, farmers, and areas of economic activity, and concern the major fields of land use planning. 
- Secondary sectoral master plans → these plans have a less direct impact on land use than the primary master plans; they generally concern specific facilities that need to be organized and regulated in a nationally consistent and efficient manner and taking into account the objectives of the (master program)  

## WHAT ARE THE OBJECTIVES OF THE LAND USE PLAN?

A sectoral master plan has as objectives to establish rules necessary for the development options, servicing, or the development or neighborhoods that it intends to make a construction. 

So more precisely, it is a development plan for a national interest that accesses the cadastral parcels of one or more municipalities, forming a determined area to be developed, giving it a use.

A concrete and detailed land use plan, if necessary, adapted to the level of implementation. 
It is elaborated in accordance with the options of the master plan for land use planning and on the decisions taken by the Government in council. 

What are the objectives of land use planning?

The purpose of land use planning is to guarantee respect and the general interest by ensuring a stable standard of living for the population.

What documents must a real estate agent register.jpg

What documents must a real estate agent register? 

- the sales mandate 
- the compromise of sale 

The deadlines are : 

In the case of a real estate agent, he must submit the documents within 10 days. 
For a client who sells his property alone, he has a period of 3 months. 

- The registration fees are to be paid by the purchaser 
- The registration fee for sale is 5% +2/10 = 6%. 
- The rate of the mortgage transcription fee = 1%. 
- Total of 7% are charged to the buyer of the property. 

## What is a tax credit?

When it comes to first-time real estate purchases in Luxembourg, a person can benefit from a tax credit of €20,000. 

## What are the conditions to benefit from a tax credit?

The purchaser must declare in writing to the administration, within 3 months, any transfer or change of mission of the building concerned. 
That is to say, the purchaser must respect certain conditions such as : 
- Personal occupation of the property concerned for 2 years from the date of signing the notarial deed. 
- No renting during the 2 years nor installation of office or the person exercises his professional trade.

**(except exception)**
- Illness. 
- Death of the spouse or divorce.
- Forced sale of the building. 
- Expropriation for public utility.

And depending on the financial situation of the client, with all the expenses that he needs to finance. It is also possible not to use the entire sum of 20,000 €, and could leave part of his credit for a later purchase. 

## Is there a specific regime?

Yes, in case the client intends to resell, it is necessary to inform the notary when signing the notarial deed, in fact this avoids the client to pay the 1% rate of the transcription right. 

**Refund of registration and transcription fees**

If a person buys a property and sells it within 2 years, he/she gets back 6% of the registration and transcription fee. 
    
And if a person buys a property and resells it within 4 years, he/she will get back 4.8%.  

## Are there any special cases for the payment of registration fees?

Yes, when it comes to the sale (VEFA) of new constructions. For example, if the existing construction is at 40%, the client will pay in relation to what already exists, i.e. 40% too. Regarding the tax credit for VEFA the deadline for repayment is longer than an existing property, it is 4 years and there is a possibility to extend. And everything concerning the VEFA, there is no compromise, but rather a contract of reservation.

## Is there a communal surcharge for living on the territory of Luxembourg City?

Persons living on the territory of the city of Luxembourg, by sale or exchange, donation or similar acts, are affected by a tax equal to 50% of the reducted registration fees.
That is to say, the 6% registration fee + 1% registration fee + 3% reducted registration fee, total = 10%.

**Exception**: single family homes.

What documents must a real estate agent register?

In this article, discover what documents a real estate agent must register? 

What is money laundering and terrorist financing.jpg

In this article, we want to explain to you what is money laundering and terrorist financing? And how does it work? 

## What is the purpose of money laundering?

Money laundering involves the reuse of proceeds (money) of criminal origin to disguise their illegal origin. 

- A primary offense 
- Creating a legal entity 
- Hiding a criminal activity

## What are the stages of money laundering?

### The stages of money laundering:

- Placement or injection of an account at the bank 
- Dishonestly introduce dirty money to hide the origin of the crime. 
- Then make purchases of bank securities, investment in real estate or legitimate acquisitions.

### Stages of terrorist financing:

- Placement of assets in the financial system.
- Filling, hiding or transferring funds to several institutions to hide the origin.
- Distribution of funds to finance criminal or terrorist activities.

## What is a primary offence?

Primary offences are when we talk about drug trafficking, kidnapping, pimping, theft.

Knowingly facilitating, by any means, the misrepresentation of the nature and origin, location, disposition, movement or ownership of criminal funds 
e.g. drug dealer 
- knowingly assisting in the placement, concealment, disguise, transfer or conversion of criminal funds 
- Acquire, hold, use criminal funds knowing at the time of receipt that they are derived from one or more primary offences 

All professionals (bank, real estate, notary, lawyer) 

**The penalties are :**
fine from 1250 to 1,250,000 € or 1 to 5 years in prison recidivism 
following the law of November 12, 2004 as amended on (February 12, 2018) payment in cash for a maximum moment of 10,000 € professional obligations in AML. 
Circular AED N°764 of April 29, 2013 for real estate agents

## What are the professional obligations of a real estate agent?
 
To detect on the identity of the customer, and if we notice that it is a customer at risk, we must make a declaration of suspicious operations.

## What are the vigilance measures to be taken?

- Identification and authentication of the customer (from the 1st contact) 
- Identification of the beneficial owner 
- Name filtering with watch lists. 
- Constant vigilance in the business relationship. 
- An obligation to keep documentation 

It is necessary to have information on its activities, its purpose, planned business, the economic origin of funds.

**Required data:**

- for natural persons → passport, photo+ signature, proof of recent residence 
- for legal persons → we need to do more verification

- the status of the company, recent extract of RCS
- the beneficial owner
- the legal status of the legal entity 

## What is a PEP person?

It is politicians like (head of state, head of government, minister, ambassadors, officers, armed forces...) and it also concerns direct family members. 

And so there are certain procedures to be put in place.

## What steps should we take when we have a PEP client?

- Obtain authorization from a higher level of the hierarchy before carrying out a business relationship.
- Establish the origin of the assets, and the origin of the funds involved in the transaction. 

As a precautionary measure, it is necessary to regularly update the client's data. 
Note that the retention of documents against money laundering is limited to 5 years, and for commercial documents, it is 10 years. 

What is money laundering and terrorist financing?

In this article, we want to explain to you what is money laundering and terrorist financing? And how does it work? 

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