With the replacement of the physical Token by the LuxTrust Mobile application, borrowing the Token from your parents or any other person to make their payments or bank transactions is no longer possible. It is simply not legal. Using someone else's Token, even with their consent, is comparable to borrowing an identity card, which is strictly forbidden. Payments can still be made, but in a more secure and legal way. We give you some advice on how to do this in this article.
Buy to let: a good idea?
You've decided to invest in real estate? Congratulations! Investing in bricks and mortar remains an interesting bet when preparing your retirement. It enables you to diversify your savings and to generate additional income. So it’s all good news then? Yes, providing that you do your research. Here are some ideas for investing successfully in rental properties.
However, you shouldn’t just buy property anywhere! To ensure that your investment is really profitable, you should begin by paying careful attention to the property's location. Areas with a high concentration of inhabitants and shops can be very attractive. Although the city centre accounts for most of the demand, don’t overlook outlying districts or areas enjoying high economic growth, such as Esch-Belval for example.
Although old apartments are naturally appealing, investing in new properties helps you avoid refurbishment costs. What’s more, new builds are more likely to meet the applicable energy requirements, often considered an important criterion by many tenants. On this point, always check the building’s energy passport because since 1 January 2017, each new residential building must be in energy class AAA. Moreover, each new construction as well as existing buildings must have an energy passport.
Investing in buy to let properties also entails rental risks. The buyer must be aware of the risk that his property may remain unoccupied for a certain amount of time. However, if the investor has received financing from a bank, he must ensure that he possesses the funds needed at all times to be able to repay his loan on time. In the event of rental, there are insurances providing coverage in case of unpaid rent.
- notary fees
- registration and transcription fees: 7% of the price for an existing property, respectively 7% of the price of the plot area and the parts already built for a new property
- possible mortgage establishment costs
- VAT: 17% for new properties. Existing properties are VAT-exempt.
- municipal land tax
- etc.
The net rental income – the gross income from which you deduct certain expenses such as interest and charges, maintenance and management costs, depreciation of the property, etc. – is subject to tax. By the way, did you know your rental investment is depreciable at a rate which is based on the year the property was built? For example, you benefit from a depreciation rate of 5% for the construction year and the 5 subsequent years of a property’s existence. Rather attractive, isn’t it? Finally, a negative net rental income may be deducted from your other taxable income.
Are you planning to build, buy or renovate/refurbish a home? Such a project is a considerable investment that requires careful preparation and a trustworthy financial partner. Depending on the nature of your project and on your personal situation, various financing solutions are open to you. Our advisors are at your disposal to develop, with you, a tailor-made financing plan perfectly suited to your needs.
Download our guide to housing loans or make an appointment with one of our advisors.
Brochure "Guide to Housing Loans"
Are you planning to build, buy or renovate/refurbish a home? Such a project is a considerable investment that requires careful preparation and a trustworthy financial partner. Depending on the nature of your project and on your personal situation, various financing solutions are open to you. Our advisors are at your disposal to develop, with you, a tailor-made financing plan perfectly suited to your needs.