Are you planning to buy a property in Luxembourg? Are you hesitating between buying a new property or an old one? With the real estate specialists Engel & Völkers Luxembourg, we assess the advantages of one or the other acquisition.
The advantages of buying a new property
Buying a new property has significant advantages.
Since 1 January 2017, all new constructions in Luxembourg must comply with passive house construction standards, i.e. AAA efficiency classes. This triple A corresponds to optimal energy efficiency, thermal insulation and environmental impact. The energy consumption must be almost zero (NZEB = Nearly Zero Energy Building).
By complying with passive house standards, the constructions are designed to guarantee lower energy consumption and more efficient distribution of the heat produced. In addition, the houses or apartments are equipped with the latest technical innovations in terms of energy consumption in order to guarantee low consumption.
Buying a new property therefore means above all benefiting from these building standards in order to optimise energy consumption and thus save energy in the future. On the other hand, an old property will probably require additional expenses in order to improve energy performance. The energy pass mandatory for any sale of property will help you to evaluate the expenses to be expected. Remember to ask for it as soon as you visit a property for the first time!
When buying a new property, you benefit from a ten-year guarantee. This 10-year guarantee, provided by the builder, guarantees the owner of the property security in the event of a defect in the construction. In multi-family buildings, it insures any major co-ownership work within 10 years of the purchase of the apartment.
Consider asking if the 10-year guarantee is still active in the event of the acquisition of a recent property.
Reduced VAT rate
For the purchase of a new principal residence, the purchaser benefits from a VAT rate of 3% on the amount of the construction, up to 50,000 euros per newly created property. The VAT rate applied is 17% for investors wishing to acquire a new property for rental.
Recording and transcription fees
Registration fees are the fees paid to the notary when a property is bought . These costs 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 existing housing. Calculate the registration fees.
The advantages of buying an old property
Old properties have other advantages in comparison to new ones.
Lower prices per m² in already built properties
Everywhere in Luxembourg, the price of old properties is 20% lower than the price of new buildings. In this perspective, it should be noted that prices per square meter tend to increase more in the old properties than in the new ones.
You can increase the value of your property over time better by investing in old houses or apartments than in new ones. With a cost price lower than m² and the rise in property prices, its value is likely to increase more rapidly. This is especially true if the property is located in a sought-after area and/or if you have undertaken renovation work.
Focus on localization
With a few exceptions, old properties are located in highly demanded areas close to shops and public transport networks. In Luxembourg, the most wanted districts are the Centre, the Gare district, the Grund, Belair and Limpertsberg. See the districts where to live in Luxembourg.
Renovation work and reduced VAT rates
If you carry out work in ytour main dwelling, 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 may not exceed 50,000 euros per dwelling.