Do you want to act now? Do you wish to pass on part of your assets during your lifetime, and get to see the effect of your contribution? Then make a donation!
Any property can be subject to donation. Depending on the nature of the property, there are two types of donation: a “manual” donation and a “notarized” donation.
Manual donations are the most conventional and the most widely used. They consist in giving money and do not require a notarial deed. In order for your donation to be tax-deductible as a special expense, the sum total of the donations you make must be greater than or equal to €120 and must not exceed 20% of your total net income or an amount of €1,000,000. Donations exceeding these ceilings may be carried forward to the next two years.
Notarized donations apply in principle to all movable property (jewellery, works of art, cars, paintings, securities, etc.) and immovable property (a house, an apartment or land).
There are several options available to you.
A full ownership donation. You give your property in full and definitively to the Luxembourg Red Cross.
A bare ownership donation. You transfer the property to the Luxembourg Red Cross but you retain usufruct for yourself or for another person you have designated. This formula is particularly practical for buildings. For instance, for an apartment, the Luxembourg Red Cross becomes the owner, but you can continue to occupy it or collect the rent during your lifetime.
A temporary usufruct donation. You retain ownership of the property but you give the usufruct to the Luxembourg Red Cross for a fixed period of time. Temporarily transferring income to the Red Cross in this way may provide tax benefits. In such a case, you could indeed change tax brackets and make substantial savings on income tax.
Under Luxembourg civil law, the donation of movable and immovable property must meet the formal requirements of a notarial deed in order to be valid, otherwise it will be null and void. The only donations where you are not required to go through a notary are money donations.
Donations of movable and immovable property made by notarial act are subject to a registration fee. This is calculated on the basis of the market value of the property on the day of the donation. For movable property, the registration fee is 4.8%. For immovable property, the registration fee is also 4.8% plus a 1% transcription fee. If the property is located on the territory of the City of Luxembourg, a municipal surcharge equal to 50% of the registration fee will be applied.
You wish to donate jewellery to the Luxembourg Red Cross.
Value of the property at the time of the donation: 1,000,000 €.
Registration fee: 1,000,000 x 4.8% = €48,000
You wish to donate an apartment located in Luxembourg City to the Luxembourg Red Cross.
Value of the property at the time of the donation: 2,000,000 €.
Registration fee: 2,000,000 x 4,8% = € 96,000
Transcription fee: 2,000,0000 x 1% = 20,000 €.
50% municipal surcharge: 96,000 x 50% = 48,000 €.
Total: 164,000 €.
As the Luxembourg Red Cross is the beneficiary of your donation, it is the Luxembourg Red Cross that will pay the registration fees. If you wish to cover all or part of these fees, you will have to specify that in the notarial deed.
Donations of real estate located abroad are not subject to the formality of a notarial deed in Luxembourg and, therefore, are not subject to registration fees. Nevertheless, they are generally subject to donation fees in the country where the property is located. It is best to obtain information from the tax authorities of the country in question.
You must first contact us and then go to the notary of your choice with the following documents: