Buying real estate: new or old?
Are you considering buying real estate in Luxembourg? Are you unsure whether to buy new or old? With our real estate specialists, we take stock of the advantages of each type of purchase.
Advantages and disadvantages of new real estate
Buying a new property in Luxembourg offers significant advantages in several areas: you benefit from buildings featuring the latest technological innovations and can move into a new property that meets all your requirements in terms of layout, etc. But that's not all... Find out more here.
Latest real estate standards and energy optimization
Buying a new property means, above all, benefiting from the latest real estate construction standards. In Luxembourg, these standards aim to optimize energy consumption and thus provide concrete energy savings in the future.
AAA passive houses in Luxembourg
Since January 1, 2017, all new buildings in Luxembourg must meet passive house construction standards. They must comply with AAA energy efficiency classes. This triple A rating corresponds to optimal energy efficiency, thermal insulation, and environmental impact. Energy consumption must be nearly zero (NZEB = Nearly Zero Energy Building).
Energy savings in new homes
In accordance with passive house standards, AAA buildings guarantee lower energy consumption. In addition, they distribute the heat produced more efficiently. Houses or apartments equipped with the latest technical innovations in terms of energy guarantee very low energy consumption. Ultimately, this means lower energy bills for occupants , which is greatly appreciated in a context of soaring energy prices.
By comparison, older properties will undoubtedly require additional investment to improve their energy performance. This is particularly true of homes built before the oil crises of the 1970s.
An energy performance certificate is mandatory for all property purchases. It will enable you to estimate the costs involved. Remember to ask for it when you first view a property you are interested in!
Buying off-plan in Luxembourg: creating your own tailor-made home
Buying a new home usually means buying off-plan. This means that from the outset, you can visualize your future home and participate in its creation.
The layout of the different rooms to make the most of light and sunshine, the arrangement of the rooms, the choice of materials, the choice of bathroom fixtures, the design of the kitchen, etc. Except for multi-unit dwellings, buying a new home allows you to create your own tailor-made living space. If you choose to build your own house, you will be able to meet the needs of your family.
Benefit from a ten-year warranty on new properties
In Luxembourg, whether you buy a new or recent property, you are covered by a ten-year warranty. This 10-year warranty, provided by the builder, offers the property owner security in the event of construction defects.
In apartment buildings, the ten-year warranty covers any major work on the condominium within 10 years of purchasing the home.
Therefore, when purchasing a recent property, remember to ask if the ten-year warranty is still active, including for single-family homes.
Reduced VAT rate for new properties or for renovation work
When purchasing a new primary residence, the buyer benefits from a VAT rate of 3% on the construction cost, provided that they occupy the property themselves as their primary residence. This benefit amounts to €50,000 per newly created dwelling. The VAT rate will be 17% for investors wishing to purchase a new property for rental purposes.
Reduced registration fees for new purchases
Registration fees are the costs paid to the notary when purchasing a property. These costs are calculated on the basis of the cost of the land and the existing building. They are therefore particularly low if the land has not yet been built on. They will be higher for an existing home.
Be aware of delays and prices in new real estate
Since the Covid health crisis and international crises such as the war in Ukraine, the time it takes for properties to become available has tended to increase. Whether in apartment buildings or single-family homes, the supply of raw materials is suffering.
As a result, the time it takes to get the keys to your new home may be longer. At the same time, raw material prices are skyrocketing. The final cost of new construction is also suffering. After new construction, investors are now increasingly turning to older properties.
If you are looking to buy a home, don't miss the Home Expo in October.
Old real estate: advantages and disadvantages
Existing properties offer other advantages over new builds.
Immediate availability of older properties in Luxembourg
In Luxembourg, the purchase of older properties can be very quick. Once the preliminary agreement has been signed, the sale can be completed within a maximum of one to two months.
Any additional delays are often related to obtaining a loan, and therefore depend on the buyer. To avoid this, make sure that you have the banks' approval for the estimated budget of your real estate purchase before you start your search. This will also save you a lot of stress when it comes to signing a purchase offer.
Are you looking to sell your house or apartment? Make sure the buyer already has a loan agreement.
Lower prices per square meter for older properties in Luxembourg
In Luxembourg, the price of older properties has historically been 20% lower than the price of equivalent new properties.
See the latest real estate price trends in Luxembourg.
Appreciation of older properties over time
Investing in older properties allows you to increase the value of your real estate over time. With a lower cost per square meter and rising real estate prices, the value of older properties is likely to increase more quickly.
This is especially true if the property is located in a sought-after area and/or if you have carried out renovation work. The market is also becoming increasingly demanding in terms of property quality.
People who bought their property more than 15 years ago in Luxembourg have seen their investment double since then.
Larger plots of land for older houses
Older houses often benefit from several acres of land with large gardens. Built at a time when land prices were still low, older houses offer an undeniable advantage in terms of land area.
Today, we often see houses from the 1950s to the 1980s being demolished to make way for new residences. In addition, with the explosion in demand, municipalities are granting more and more building permits for two-family houses and even apartment buildings where previously there were only single-family houses.
This phenomenon tends to reduce the average lot size for new homes.
Prime locations with nearby amenities
With few exceptions, older properties are located in highly sought-after areas close to amenities. Closer to city centers, older properties often offer better access to shops, schools, and public transportation networks.
New builds are more decentralized, except that new neighborhoods are emerging at the same time as the buildings, with all amenities nearby. See the real estate market to find out about these new neighborhoods.
In Luxembourg, the most sought-after older neighborhoods are the Center, Grund, Belair, Merl, and Limpertsberg. Gasperich, Kirchberg,and Cessange are seeing the emergence of new neighborhoods. See neighborhoods to live in Luxembourg.
Renovation work and reduced VAT rates
If you carry out work on your main residence, including as a tenant, you can benefit from a
If you live in an older property, you can carry out work on it. If it is your main residence, you can also benefit from a reduced VAT rate of 3% instead of 17% on the cost of the work, upon request to the authorities. See housing assistance in Luxembourg.
However, the total amount of this benefit cannot exceed €50,000 per home. You will need to apply to your local authority to benefit from this advantageous housing VAT rate. If you are a tenant, remember to ask your landlord for permission before carrying out any work.
Are you looking to buy a home? Contact an agent to help you find a property.
Why buy real estate in Luxembourg? We tell you everything you need to know.
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