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As in many countries in Western Europe, Luxembourg in 2013 was marked by a strong improvement in office investment activity, its best performance since 2007. Once again, offices consolidated their pole position amongst assets (78%), thanks to large transactions over € 20 million. Competition between investors pushed prime yields upwards to 5.10%, sustained by the shortage of supply and high rental values in the CBD.

Up until today the Luxembourg government has applied a super low TVA rate of 3% instead of 15% on the construction of new housing that was to become the main place of residence.
The conditions for applying the change in VAT. Historically the Luxembourg government granted a reduction of 12% from the top line VAT rate of 15%, thus an applicable rate of 3%. This was applied to the construction of new housing intended to become a main residence as well as a budget for renovation construction work, up to EUR 50,000 per residence.