Presentation of the bill and its objective

The government has recently introduced a bill to create a works fund for condominiums in Luxembourg (regardless of the size or year of construction). Each co-owner will have to pay an annual contribution to this fund to meet the costs of the renovation works of the common areas as set out below:

• energy-related renovations
• the installation of infrastructures for the fitting of technical ducts
• the installation of renewable energy production and storage units (solar, wind and geothermal).

The work to be done and the exact amount of the fees will be decided by a majority vote at the co-owners’ general meeting. The government has however classified the amount of the contributions according to the EPC (energy performance certificate) of the condominium:

• classes A+, A, B, C = €3/m²
• classes D, E = €5/m²
• classes F, G, H, I or no valid EPC = €6/m².

For a 1000m² condominium, this represents €6,000/year to be distributed according to the quotas of all the co-owners.

More details.

The objective of this bill is to harmonize the energy performance of housing in Luxembourg. There is indeed a significant gap between the performance of new and old housing. The government therefore wants to accelerate the energy transition of accommodations that are still too energy-intensive.

Limits to the proposed bill

The law requires co-owners to provide an original statement of account of the works fund to any person showing an interest in acquiring the unit. However, it is not specified whether owners must provide this document at the time of contact, at the first visit, or at the signing of the preliminary sales agreement.

In addition, the amount of the annual contribution will be higher for less energy-efficient housing, which will penalize households that cannot afford a new home. Thus, the majority of the contributions paid to these works funds will be borne by the lowest-income households.

How to improve the bill

For this bill to benefit the Luxembourg real estate landscape but also all the inhabitants of the Grand Duchy, the annual contributions paid to the condominium works funds should be fully or partially tax exempt. According to Chamber of Commerce, this measure would help the lowest-income households and individuals who have recently become homeowners and who must make substantial financial efforts to find housing.

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