The advantages of investing in new property in Luxembourg

New-build property in Luxembourg: a top-of-the-range property, with customized finishes!

Investing in new-build property means buying off-plan. You will be able to participate in the design of your interior and draw it according to your needs. Moreover, the property developer will offer you a range of customization options to build a home that is almost made to measure.

For example, you will have the freedom to choose tiles or other flooring in the bathrooms, to design a kitchen to your liking, to choose the furnishings in the living areas, and much more. If, on the other hand, you opt for a new property that has already been built, you can be sure that it will be equipped with the latest facilities and will have a modern architecture.

Energy savings with new build properties

Building regulations are constantly evolving, with requirements on building materials and methods, and especially on energy performance. By investing in new-build property in Luxembourg, you will own a property with the latest energy-efficient equipment that guarantees low energy consumption.

Indeed, since 1 January 2017, all buildings must meet the requirements of efficiency class AAA. This triple A is a building standard that indicates that energy efficiency, thermal insulation, and environmental impact meet today's challenges. This means that new buildings can reduce energy bills, which is very welcome in a context of inflation. The energy passport, which is compulsory for all property sales, can give you an idea of the energy bills.

On the other hand, an old building will certainly require additional expenditure to bring it up to energy performance standards, and the price of this work can quickly rise depending on the extent of the renovation.

Benefit from the ten-year guarantee in Luxembourg

Investing in new property also means benefiting from the ten-year guarantee. This offers you, the buyer, considerable security if ever a construction defect is found out. For example, if there is a problem with humidity that could affect the solidity of the building, the insurance of the contractors involved in the construction will fund the work. In the case of multi-family buildings, the ten-year guarantee covers any major work carried out by the co-ownership within 10 years of the purchase of the property.

By way of comparison, you are not entitled to this guarantee in the case of an older property, as you are buying the property as it is, and only proof that the former owner deliberately failed to report a problem affecting the property can make him/her liable.

Reduced VAT rate, grants, and financing for new property in Luxembourg

The Grand Duchy has provided incentives for investment in new property. This is the case, for example, with the 3% VAT rate for the purchase of a main residence. But if you buy to rent out afterwards, the VAT is 17%. On the other hand, whether you wish to rent, or live in your property, you will benefit from particularly low rates at the notary's office if the land has not yet been built on.

In addition, some Luxembourg municipalities encourage homeownership by granting capital allowances. In many cases, such grant is linked to the condition of receiving a state premium. There are also interest subsidies provided by the State to reduce the monthly repayment costs of a mortgage loan taken out for the construction, acquisition or improvement of a dwelling used as a principal or permanent residence.

Do not hesitate to enquire about direct capital grants or acquisition premiums available for investing in new property in Luxembourg.