Renovating an old house in Luxembourg can prove to be a complex and fascinating project. Rich in history and charm, Luxembourg’s real estate heritage offers numerous opportunities for homeowners eager to breathe new life into their residence. However, it is important to be well-prepared and consider the specific challenges associated with this type of renovation.
Indice
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CHALLENGES OF RENOVATING AN OLD HOUSE IN LUXEMBOURG:
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3% VAT FOR RENOVATION PROJECTS IN LUXEMBOURG
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WHICH RENOVATION WORKS ARE ELIGIBLE FOR THE REDUCED 3% VAT
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CHECKING FOR ASBESTOS PRESENCE BEFORE STARTING A RENOVATION
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10+1 MOST COMMON ISSUES IN RESIDENTIAL RENOVATION
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WHY HIRE AN INTERIOR ARCHITECT: AVOID COMMON MISTAKES AND MAXIMIZE YOUR SPACE
Challenges of Renovating an Old House in Luxembourg:
- Legislation and Regulations: Luxembourg enforces strict standards in construction and renovation. It is crucial to adhere to local regulations and secure the necessary permits before initiating any work.
- High Costs: Renovating an old house can be expensive due to the need for high-quality materials and specialized labor. It is important to carefully budget for the project and plan for unexpected expenses.
- Shortage of Qualified Professionals: Finding experienced and competent craftsmen for the renovation of old houses can be challenging. It is important to take the time to research and compare different service providers.
Read another article: [2024] How much does it cost to renovate a house in Luxembourg?
3% VAT for Renovation Projects in Luxembourg
To encourage housing development, Luxembourg applies a 3% VAT rate to construction and renovation works on homes, provided they are intended to be used as a primary residence, either directly by the owner or indirectly by a third party. This super-reduced 3% VAT rate is specifically aimed at homes used as the primary residence by their owner. Rental properties no longer benefit from this tax advantage, except for renovation works related to these properties.
The total amount of the tax benefit resulting from the application of this reduced rate must not exceed 50,000 euros per housing unit created or renovated.
Here are two practical examples:
Example 1
Mr. Weber has decided to undertake renovation works in his apartment in Hesperange. The total cost of the works amounts to 100,000 euros.
In this case, he will benefit from a reduced VAT of 3%, which means the total will amount to 103,000 euros (100,000 euros + 3% VAT) instead of 117,000 euros (100,000 euros + 17% VAT).
He will therefore save a total of 14,000 euros on an amount of 50,000 euros.
Example 2
Mrs. Schmit plans significant renovation works in her house in Strassen totaling about 500 thousand euros. In this case, she will be able to benefit from a reduced VAT rate on approximately 350 thousand euros of the works.
In practice:
350,000 euros + 3% VAT = 350,000 euros + 10,500 euros = 360,500 euros
instead of
350,000 euros + 17% VAT = 350,000 euros + 59,500 euros = 409,500 euros
Mrs. Schmit will thus save 49,000 euros (the difference between 409,500 euros and 360,500 euros), almost fully exhausting her tax advantage limited to a maximum of 50,000 euros. The remaining part of about 150,000 euros will be subject to a VAT rate of 17%.
Which Renovation Works Are Eligible for the Reduced 3% VAT
It is important to note that not all works can benefit from the reduced VAT rate of 3%. Specifically, the provision of furniture, even if built-in such as fitted kitchens or wardrobes, is not eligible. Similarly, special technical equipment such as alarm systems or home automation installations are not eligible.
Asbestos Verification Before Starting Renovation
Asbestos, known for its past uses in residential construction, is particularly dangerous when disturbed, which may occur during renovation or construction works. It’s important to emphasize that, up until the 1980s, the use of asbestos in homes was very common, and according to Eurostat data, Luxembourg, Belgium, and the Baltic countries recorded the highest spread in Europe. Luxembourg definitively banned the marketing of asbestos from 2001.
Contact with asbestos, even sporadic, can cause serious diseases such as lung or pleural cancer, fibrosis, asbestosis, and pleural plaques, which can manifest decades after exposure. Consequently, in situations where asbestos is present but not manipulated, the safest practice is to avoid disturbing it. Before starting demolition or maintenance work in buildings potentially containing asbestos, it is crucial to conduct a thorough check to identify the presence of this material.
Renovation companies are required to protect their workers from these risks by following strict safety procedures and informing the building owners of the need to carry out a detailed analysis through certified entities.
If such analysis is neglected, not only does it endanger the health of the workers, but there is also a risk of the site being closed for many months and severe financial penalties from the competent authorities, such as the ITM, Inspection du travail et des mines, which can amount to tens of thousands of euros. Therefore, it is essential to adopt all necessary precautionary measures to ensure a safe working environment compliant with current regulations.
Do you need an interior designer in Luxembourg?
10+1 Most Common Problems in Residential Renovation
- Cost overruns and budgeting issues
- Delays in project completion
- Poor communication between the homeowner and the builder
- Poor quality of work and shoddy construction
- Failure to obtain necessary permits and inspections
- Lack of proper planning and design
- Plumbing and electrical issues
- Structural and foundation problems (e.g., the presence of asbestos)
- Difficulty matching existing materials and styles
- Issues related to layout and building codes
- Challenges in sourcing materials (material shortages)
Finding qualified professionals to perform renovation work in Luxembourg can be challenging. Therefore, it is important to take the time to search for skilled and experienced companies and craftsmen to ensure that the work is done correctly and efficiently.
Projet: House Renovation, Kitchen – Bonnevoie, Luxembourg
Why Hire an Interior Designer: Avoid Common Mistakes and Maximize Your Home’s Space
Hiring a professional interior designer to renovate a home can offer numerous benefits for homeowners. Professional interior designers possess the skills and expertise needed to create functional, aesthetic, and personalized spaces that meet the needs and desires of the homeowners.
Firstly, professional interior designers are well-versed in current interior design trends. They can offer innovative and original design ideas that will modernize and personalize the living space.
Furthermore, professional interior designers can also help homeowners maximize the available space in their homes. They have the skills to create efficient layout plans that will enhance storage, circulation, and functionality.
Professional interior designers can also assist homeowners in managing renovation costs. They can develop detailed plans and estimates that allow homeowners to better understand the costs associated with various renovation projects, and to plan accordingly.
Ideas Factory: The Choice for Your Peace of Mind
Ideas Factory can assist you in handling the practical aspects of renovation, managing the worksite and suppliers, and can also advise you on the materials, colors, and furniture that best suit your space, as well as the most suitable lighting and storage solutions.
Project: Kitchen in a veranda – Gasperich, Luxembourg
