FAQ

The provision relating to the super-reduced rate reduces the scope of application to the level of the type of building that will be equipped with solar panels, namely “on private housing, housing and building, public and others, used for activities of general interest, and in close proximity to these”.

As far as “private housing” is concerned, this is housing of which at least three quarters of the total surface area is reserved for living purposes. The same rule applies to housing and public buildings and others used for activities of general interest: at least three quarters of the total surface area must be reserved for these purposes.

A definition of this is provided in the grand-ducal regulation of 23 December 2022 amending: 1° the grand-ducal regulation amended on 21 December 1991 determining the limits and application conditions of the reduced, super-reduced and intermediate rates of value added tax; 2° […], and the following explication is provided by bulletin No 816 issued by the Registration Duties, Estates and VAT Authority: “private housing and buildings used by public authorities not subject to tax for activities carried out as such or used by those subject to tax for activities of general interest exempt from VAT without the right to deduct input tax (notably hospitals, schools, children’s nurseries, youth hostels and retirement homes)”. The provision of cultural services is added to the latest list.

The delivery and installation of photovoltaic solar panels close to housing or buildings referred to above does not interfere with the application for the super-reduced VAT rate of 3 % as long as the delivery and installation takes place on adjoining or separate properties but located close to private housing or housing and buildings, public and others, used for activities of general interest and as long as such photovoltaic solar panels are connected to the thermal and/or electrical network of the housing or buildings in question.

The possibility of developing integrated housing in single-family homes is dealt with in the Particular Development Plan (PAP). For PAGs that have been completely revised since 2011, the development of an integrated dwelling is permitted unless the municipality expressly rejects it in the PAP.

According to the Grand Ducal Regulation in force, an integrated dwelling is defined as additional accommodation forming part of a single-family house and belonging to the owner of the main dwelling. In theory, integrated dwellings allow for a soft densification of existing structures.

Within the framework of the building permit application procedure, it is not within the municipalities’ field of competence to monitor compliance with private property boundaries. The right of ownership is a fundamental right enshrined in the Constitution, therefore any encroachment of the façade insulation (considered as a fixed element of the building) on a neighbouring private property must be covered by the transfer of a real right over the plot of land in question, otherwise there is a risk of legal recourse within 30 years of the work being carried out (acquisitive prescription in real estate matters).