Energy Renovation: What State Aid is Available?

Are you (or will you soon be) the happy owner of your own home and do you want to renovate it to improve its energy efficiency? Excellent idea! It’s good for the environment, but it costs. Fortunately, in Luxembourg, energy renovation projects can benefit from a wide range of state financial aid packages. Here are the main ones. 
13 May 2022

[Partner Content from ING LUXEMBOURG]

PRIMe House 

PRIMe House is a financial aid scheme provided by the Environment Agency. It has two main objectives: to promote the sustainable energy renovation of housing and to install technical facilities that use renewable energy sources. If you conduct thermal insulation work (outside wall, roof, lower slab, etc.), replace the windows or install controlled ventilation with heat recovery, you will be granted aid. You can also request a subsidy if you replace your old gas boiler with a heat pump, a solar thermal or photovoltaic system or a wood boiler. The same applies if you install a district heating network or connect to a district heating network.

These two types of subsidies – sustainable energy renovation for housing and the installation of technical facilities – can be combined as long as they relate to the same residential building.

The main conditions for benefiting from this aid are as follows:

–      your residential building is located in Luxembourg and must be at least 10 years old when the application is made;

–      invoices must have been issued between 1 January 2022 and 31 December 2025 inclusive for technical installations and between 1 January 2022 and 31 December 2029 inclusive for housing energy efficiency projects.

You can also call on an approved energy advisor before starting your energy renovation work. Although this step is not mandatory in all cases – it is only in the case of extensive housing renovation projects – we strongly advise you to do it, for several reasons. PRIMe House provides financial support for this service. The energy advisor will suggest areas for improvement that you may not necessarily have thought about. He/she will help you see more clearly the financial amounts you are entitled to. Although the new PRIMe House scheme has considerably simplified procedures since 1 January 2022, the list of technical requirements is still difficult to understand.

Climate loans

Climate loans (KlimaPrêt) aim to promote the sustainable renovation of housing older than 10 years, through pre-financing of renovation works. There are two loan formulas: the zero-interest climate loan and the low-interest climate loan. 

The zero-interest climate loan, which may not exceed €50,000 over a maximum of 15 years, is fully guaranteed by the State. It is granted by an approved bank (), and the Ministry of Housing will pay all the accrued interest. To benefit from a zero-interest climate loan, you must meet two main criteria: your household’s income must not exceed a certain amount and the usable living space must be between 65 mand 140 m2 for a single-family home (between 45 mand 120 mfor an apartment).

The low-interest climate loan can be obtained from the bank of your choice. It is limited to €100,000 per dwelling over a period of 15 years. The State grants an interest subsidy of up to 1.5% on the bank’s interest rate and up to a maximum of 10% of the principal amount (i.e. up to €10,000). You do not have to meet specific socio-economic conditions in order to be eligible for a low-interest climate loan. 

Super-reduced rate of 3%

There are also tax benefits. The biggest one is the 3% super-reduced VAT rate. In Luxembourg, VAT is in principle 17%, but you can apply for the 3% super-reduced VAT rate on trade invoices provided that you are renovating a dwelling that is your principal residence. 

Municipal assistance

Some municipalities offer additional financial support programmes. A piece of advice: contact your local authority BEFORE carrying out your work.

If you would like more information, make an appointment with one of our mortgage advisors. They will help you make the right financial choices in your project to make your home more environmentally friendly.