Are you considering buying a property in Luxembourg? Are you hesitating between buying new or old? With our real estate specialists, we take stock of the advantages of one or the other acquisition.
Advantages and disadvantages of new real estate
Buying a new home offers significant advantages on several levels: benefiting from constructions with the latest technological innovations, moving into a new property that meets all your requirements in terms of layout, reducing energy bills, etc. But not only… We tell you more here.
Realize energy savings
Buying a new property means above all benefiting from the latest real estate construction standards. In Luxembourg, they aim to optimize energy consumption and thus benefit from subsequent energy savings.
Since January 1, 2017, all new constructions in Luxembourg meet passive house construction standards. They must comply with AAA efficiency classes. This triple A rating corresponds to optimal energy efficiency, thermal insulation and environmental impact. The energy consumption must be almost zero (NZEB = Nearly Zero Energy Building).
In accordance with the passive house standards, AAA constructions guarantee a lower energy expenditure and distribute the produced heat more efficiently. Houses or apartments equipped with the latest energy technology guarantee very low energy consumption. In the long run, this means lower energy bills, which is greatly appreciated in a context of soaring energy prices.
By comparison, an older property will likely require additional capital expenditures to improve its energy performance. This is particularly true of homes built before the oil shocks of the 1970s. The energy passport, which is mandatory for all property sales, will allow you to evaluate the expenses to be expected. Remember to ask for it as soon as the first visit of a coveted property!
Create your own custom-made home
Buying a new home means buying off-plan in most cases. This means that from the outset, you will be able to project yourself in your future home and participate in its realization. Exposure of the different rooms, layout of the apartment, choice of materials for the floors, choice of sanitary facilities, design of the kitchen, … Your home will be almost custom-made and will meet the needs of your family, especially if you choose to build your own home.
Benefit from a ten-year warranty
In a new or recent property, you have a ten-year warranty. This 10-year warranty, provided by the builder, guarantees the owner of the property security in case of defects in the construction. In apartment buildings, it insures any major condominium work within 10 years of the acquisition of the property.
Remember to ask if the ten-year warranty is still active if you are buying a recent property, including a single-family home.
Take advantage of a reduced VAT rate
For the purchase of a new primary residence, thebuyer benefits from a 3% VAT rate on the amount of the construction. This benefit amounts to 50,000 euros per newly created home. The VAT rate applied will be 17% for investors wishing to acquire a new property for rental purposes .
Recording and transcription rights
Registration fees are the fees paid to the notary when a property is purchased. These fees are calculated on the cost of the land and the existing building. They are therefore particularly low if the land is not yet built. They are higher for an existing home. Calculate the registration fees.
Beware of delays and prices!
Since the Covid health crisis, delays in the availability of goods have tended to increase. Whether in apartment buildings or individual houses, the supply of raw materials suffers. Deadlines for obtaining the keys to one’s new home are extended. At the same time, the price of raw materials is soaring. The final cost of new construction also suffers. After the new, investors are increasingly turning to the old.
Advantages and disadvantages of an old property
Older properties have other advantages over new ones.
In Luxembourg, the acquisition can be very fast in the old. From the moment the compromise has been signed, the sale can be completed within 1 to 2 months maximum. Delays are often linked to obtaining a loan, therefore due to the buyer. Make sure from the beginning of your research that you have the agreement of the banks for the provisional budget. In addition, you will avoid a significant source of stress when signing an offer to purchase.
Lower prices per square meter in older buildings
On the Luxembourg territory, the price of old real estate is historically 20% lower than the price of equivalent new real estate. However, with the shortage of housing and the fact that investors are turning away from the new for reasons of lower yields, the old becomes more interesting. As a result, prices for older homes are also rising sharply. Prices per square meter for new properties are tending to push up prices for old properties, which are currently experiencing record growth .
Investing in old buildings allows you to increase the value of your property over time. With a lower cost per square meter and rising real estate prices, the value of old buildings is likely to increase more rapidly. This is especially true if the property is located in a desirable area and/or if you have undertaken renovation work. The market is more and more demanding as to the quality of the property.
We often see houses from the 50’s to the 80’s destroyed to build new residences. With the explosion of demand, the municipalities are granting more and more construction of two-family houses, or even apartment buildings, where previously there was only a single-family house.
Privileged locations with amenities nearby
With few exceptions, older properties are located in highly sought-after areas close to shops, schools and public transportation. In Luxembourg, the most sought-after districts are the Centre, the Grund, Belair, Merl or the Limpertsberg. See the districts where to live in Luxembourg.
Renovation work and reduced VAT rate
If you carry out work in your main residence, you can benefit from a reduced VAT rate of 3% instead of 17% on the amount of the work. However, the total amount of this benefit cannot exceed 50,000 euros per home. You will have to apply to your municipality to benefit from this advantageous housing VAT.
Why buy a property in Luxembourg?
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