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Buying off-plan: what VEFA changes
A large share of Luxembourg's new build sells before it exists. Staged payments, 3% VAT, guarantees: the regime has little in common with buying an existing home.
3 min readChecked on 19 August 2026
In brief
- What sells off-plan
- Roughly one in six registered apartment sales over twelve months
- Gap to existing stock
- Off-plan sells above existing stock in almost every covered commune
- VAT
- Super-reduced rate on application for a main residence, capped per dwelling
- The forgotten line
- Interim interest for the whole build, on top of the rent you still pay
Buying a home that does not exist yet
A sale in future state of completion commits the buyer on a plan, a specification and a delivery date. The price per m² of an off-plan sale sits almost always above the existing stock in the same commune — visible on our price pages, where both series are published side by side when the commune has enough sales. The gap buys new build at current energy standards, not a better address.
You pay at the pace of the site
Payment follows progress: a fraction on signature, then calls for funds at the structural, weathertight and finishing stages, with the balance on handover. The loan is released at the same pace, which means interim interest for the whole build, on top of the rent still being paid elsewhere. It is the line financing plans most often forget.
The 3% VAT and its condition
Luxembourg applies a super-reduced VAT rate to housing used as a main residence, granted on application to the registration authority and capped per dwelling. The benefit is conditional: if the property is not occupied as a main residence, or not for long enough, the difference is reclaimed. A buy-to-let pays the standard rate from the start. Ceilings and conditions have moved several times in recent years — have the applicable regime confirmed before signing.
What to read before signing
Three points decide the rest: the completion guarantee, which says what happens if the developer stops; the late-delivery penalties, often modest against the real cost of a postponement; and the technical specification, where the difference between two properties at the same price actually lies. At handover, the snagging list is the last moment any leverage remains: prepare it with someone who does this for a living.
What to do
- Have the bank cost the interim interest over the announced build time, not an average one.
- Ask for the completion guarantee and read who issues it: it is what answers if the developer stops.
- Compare the technical specification of two programmes at the same price — that is where the real gap sits.
- Get written confirmation of eligibility for the reduced VAT rate and the occupancy conditions attached.
- Prepare the handover with a professional: the snagging list is the last moment of leverage.
Common questions
Is an off-plan price negotiable?
Less than on existing stock, and rarely on the headline price: a developer who cuts one unit weakens the valuation of the whole programme. Negotiation lands instead on finishes, included options, or a parking space. It becomes real on the last unsold units of a delivered programme.
What happens if delivery is late?
The contract provides penalties, often calculated so as to stay modest against the real cost of a delay — extra rent, a postponed move, sometimes a loan offer to renew. Read the clause before signing, and cost it over six months of delay rather than one.
Can you resell before delivery?
It is possible by assigning the contract, but nothing about it is automatic: it needs the developer's agreement, carries costs, and capital-gains tax applies as on any quick resale. It is not an exit strategy to count on when buying.
Worth a look on this site
Official sources
- Guichet.lu — buying a home
- Registration, Estates and VAT Authority
- Observatoire de l'Habitat — sale prices per commune
The amounts, thresholds and rates quoted change regularly, sometimes mid-year. Check them against these official pages before deciding anything. Checked on: 19 August 2026.
