Buying Real Estate Off-Plan (VEFA): Key Steps and Practical Advice

Purchasing a property under buying off-plan, is an excellent solution to own a modern home tailored to your needs. This process, well-regulated under Luxembourg law, offers many advantages but also requires careful attention. Here’s a complete guide to assist you in this journey.

1. Understanding the VEFA Concept

In a VEFA transaction, you purchase a property that is not yet built or is still under construction. You sign a contract with a real estate developer, who commits to completing the project according to detailed plans and within a specified timeframe. Payments are made in installments as the construction progresses.

2. Steps to Buy a Property Off-Plan

📅 Define Your Needs and Budget

Identify the type of property you want: apartment, house, size, location, etc.

Calculate your budget, factoring in the purchase price, additional costs (notary, loan), and potential fiscal benefits available in Luxembourg (such as the reduced VAT rate of 3%).

🏢 Find the Right Project

Browse listings and new projects offered by reputable developers.

Research the developer’s track record: adherence to deadlines, quality of completed projects, and customer reviews.

🔒 Sign a Reservation Agreement

This document formalizes your interest in the property. It includes:

• A detailed description of the property (plans, materials, finishes).

• The price and payment schedule.

• The expected delivery date.

A deposit (usually 5%) is paid into a secure notary account.

🌎 Secure Financing

Contact your bank to arrange a mortgage. Provide the reservation agreement to finalize the loan application.

Consider taking out borrower’s insurance.

📝 Sign the Sales Contract with a Notary

Once financing is approved, the authentic deed is signed before a notary. This document transfers ownership to the buyer upon completion of construction.

🔧 Monitor Construction Progress and Make Payments

Payments are made in stages according to the construction milestones (foundations, structural work, finishing, etc.). Each stage must be validated before making the payment.

🏠 Inspect and Receive the Property

A handover inspection is organized with the developer to check the property’s compliance with the contract.

Any defects or issues must be documented in a handover report.

3. Key Points to Watch For

⚠️ Choose a Reliable Developer

Prioritize developers with a solid reputation and proven track record.

Ask for references or visit their completed projects.

⚠️ Review the Provided Guarantees

Completion Guarantee: Ensures that the property will be delivered even in case of the developer’s bankruptcy.

Perfect Completion Guarantee: Covers defects noted within one year of delivery.

Decennial Warranty: Covers major structural defects for 10 years.

⚠️ Scrutinize Contract Clauses

Read the reservation agreement and sales contract carefully. Ensure that all property details and penalties for delays are clearly outlined.

⚠️ Verify Finishes and Materials

Check that the materials used match those specified in the contract. Request a detailed description.

⚠️ Manage Customizations

If you want modifications or upgrades, budget for additional costs and ensure these changes are included in the contract.

Buying off-plan in Luxembourg is an excellent opportunity to own a modern, personalized property. However, thorough preparation and attention to detail are crucial to ensure a smooth experience. By following these steps and keeping these tips in mind, you can successfully complete your real estate project with confidence.