Buying new: the complete guide to buying off-plan in Luxembourg

Comfort, insulation, design, energy efficiency... When you're interested in buying property, you may be tempted to buy off-plan. So: should you buy new in Luxembourg? Is now the right time? And above all: how do you go about making a success of your off-plan purchase? Here's a guide to help you make sense of it all.

1. A market that lends itself to new purchases

With high interest rates, the Luxembourg property market is now favourable to buyers, who can study several projects and take their time. Here's why buying off-plan could be a strategic idea in 2024:

1. New-build prices have adjusted to the new economic realities and are now stable, offering visibility for buyers and investors. Interest rates are also falling. The price-rate dynamic in 2024 is particularly attractive for property purchases.
2. Banks favour new and recent properties. For homes with an A or B energy rating (such as new-build properties), they offer discounts on the purchase price. mortgage interest rate of up to -0.4 points. This reduces the monthly payment compared with a lower-rated property.
3. Prices are guaranteed throughout the construction period. This was not the case before rates were raised in 2022. At that time, prices rose each year in line with construction prices.
4. Government provides massive support for property investment with a series of incentives limited to 2024.

In summary: In 2024, there will be a host of tax incentives. So now is the ideal time to take a stand.

If you are considering investing in a new-build property, don't hesitate to browse projectsContact the developers and find out about the tax measures in force for 2024.

2. Sustainable, economical and safe homes

These are the main advantages of buying new homes that comply with the latest regulations (energy performance, location, safety, acoustic insulation, etc.). New buildings are at the cutting edge of innovation in terms of energy efficiency, reducing costs over the long term.

Here are some of the advantages of new developments:

• The insulation is of superior quality: Developers generally use the latest-generation insulation materials (mineral wool, cellulose wadding) offering high thermal resistance in walls and partitions. Homes are generally fitted with triple glazing. This reduces heat loss in winter and keeps the house cool in summer.
• New homes are energy-efficient: High inertia heating systems and heat production methods consume much less than traditional methods. The double-flow ventilation systems used in modern homes allow air renewal with heat recovery, which reduces heating requirements. Finally, home automation systems, fitted in most new homes (or sometimes offered as an option), provide optimised, intelligent management of temperature and lighting in all seasons.
• Buildings have a controlled footprint. They often incorporate solar panels, rainwater recovery systems or retention basins to minimise the environmental impact of the construction.
• Last but not least, new buildings feature enhanced security (surveillance cameras, video intercom), materials that are more resistant to fire and water (reinforced concrete, reinforced waterproofing against infiltration) and stricter standards for accessibility and evacuation.

As well as providing physical security, new-build property also offers security in terms of legal compliance. Numerous checks are carried out before building starts, during construction and after handover to ensure that the new build complies fully with current regulations. A number of insurances and guarantees ensure that buyers can be sure of this legal compliance.

Lastly, while new-build properties are more expensive to buy, they offer a number of advantages that make them a very attractive investment over the long term. Monthly charges are fairly low, there is no need to carry out work or renovations for many years, and developers offer guarantees (perfect completion, ten-year guarantee) that provide peace of mind over the long term.

For investors: new and recent homes rent for more than the average. It's the ideal solution for those who prefer turnkey solutions and peace of mind over several decades, with an attractive return boosted by the latest support measures for investors.

3. Attractive tax incentives

One of the advantages of investing in new property in Luxembourg is its tax benefits. By opting for a new property, buyers and investors benefit from a number of tax deductions:

• For buyers of a primary residence VAT is reduced to 3% (instead of 17%), up to a maximum tax credit of €50,000, which represents significant savings. What's more, homebuyers can take advantage of other measures to support property purchases:
  • Up to €40,000 tax credit "Bëllegen Akt" per person
  • Up to €4,000 of tax-deductible interest per person per year for the first 5 years (then the ceiling is reduced on a sliding scale)
• For investors :
  • The option of accelerated depreciation at 6% over 6 years
  • A "Bëllegen Akt" tax credit of €20,000
  • Take advantage of a reduction in property gains tax

Find out more, read this article.

4. A simple, personalised purchasing process

Finally, the process of buying a new property in Luxembourg is often very simple and straightforward, for a number of reasons:

• You are usually in direct contact with with the promoter or one of its partners
• There are only two major stages (apart from the financing): the reservation contract and the sales contract. Construction then begins, and you will be kept regularly informed of progress and invited to visit the site.
• You have the the opportunity to personalise your home to suit your tastes and needs
• You will be in direct contact with the developer for post-delivery alterations/corrections.

It should be pointed out, however, that the speed of the sales and construction process depends on the scale of the project and its level of commercialisation (whether or not there are still many lots for sale).

5. Homes that are also enhanced by their surroundings

Despite the recent lull in the property market, Luxembourg remains a fast-growing country, with a large number of property developments being launched on a regular basis. This raises the question of the potential of the district in which you are buying. There are generally 2 possible scenarios:

• Or the building fits into an existing, well-developed neighbourhood (Bel-Air, Merl...) and you'll have to pay a bit more for it.
• Or the building is part of a wider programme construction or renovation of an entire neighbourhood. Properties are generally less expensive in this type of configuration.

This last option can be an interesting gamble. If we take the example of certain areas of Luxembourg City or Belval, flats in the same block of new buildings have tended to appreciate in value more quickly than neighbouring properties.

In addition, new property developments are often located in strategic areas, benefiting from improved access to infrastructure and services, which increases their value over time.

• The Ban de Gasperich project is an example where the creation of a new district has created a complete ecosystem with shops, schools and transport, significantly increasing the attractiveness and value of property in the area.
• In Esch-sur-Alzette and BelvalThe new developments offer direct access to leisure facilities, green spaces and shopping centres, making them particularly attractive to families and professionals. The future rapid tramway will also link the city to the capital in 15 minutes, adding to the appeal of real estate in this part of the country.

Conclusion: Should you invest in new-build property in Luxembourg?

To sum up, for those interested in buying off-plan and wanting to invest in Luxembourg, buying new could be a strategic choice in 2024:

• Because the new measures The Government's new tax incentives offer a wide range of tax breaks. But these benefits are limited to 2024.
• Because the price-rate dynamic is particularly favourable to property investment
• Prices are guaranteed throughout the construction period
• Assets are guaranteed, building security is generally of a high standard, and services in Luxembourg are top-of-the-range.

To find out more and explore the options available, visit the new developments available in Luxembourg. If you prefer to go back to the old days, you can also access the search for old properties.

Frequently Asked Questions (FAQ)

What are the tax advantages of buying a new property in Luxembourg?

Tax benefits include reduced VAT at 3% on the first €50,000 for principal residences and exemptions on registration fees. Investors also benefit from a €20,000 credit per person and particularly advantageous accelerated depreciation. From numerous measures recently adopted allow you to benefit from extensive tax advantages.

Is new-build property more energy-efficient?

New buildings in Luxembourg use modern materials, high-quality insulation (triple glazing, modern insulation in walls and partitions) and low-energy systems (double-flow ventilation, solar panels or photovoltaic panels) that reduce energy costs for homeowners.

Does new-build property offer better security?

New properties must be built to the latest safety standards. These include advanced fire-fighting systems and earthquake-resistant structures.

Can we expect capital gains on new-build property?

In general, new or modern properties appreciate in value more quickly than older properties. There are several reasons for this: firstly, there is rarely any need for renovation. Secondly, service charges are often fairly low. Finally, recent property developments are building entire neighbourhoods (such as Gasperich or Belval), with homes well connected to all amenities (supermarkets, parks, green spaces, crèches, transport). These areas often become strategic locations, which helps to increase the value of the property.

How does the process of buying a new property in Luxembourg work?

The fact that you can work directly with the builder and customise your home means that the buying process is often quick and straightforward. Investors are also reassured by the insurance and guarantees provided for new developments.