Climate loans with interest subsidies are available. Our mortgage experts are here to advise you.
What is meant by energy retrofitting?
Energy retrofitting is any work that improves the energy efficiency of a house or flat.
- changing your boiler for a more economical heating system;
- insulating walls and roofing;
- replacing windows and French windows;
- installing solar panels;
The aim of this type of renovation is to improve comfort, while minimising energy consumption and greenhouse gas emissions to create a more sustainable home.
What are the benefits of energy retrofitting?
There are plenty of good reasons for energy retrofitting your home:
- reducing your heating bills;
- creating more comfortable living conditions;
- limiting your dependence on fossil fuels and the impact of price fluctuations;
- improving the energy performance certificate (EPC) of your home;
- increasing the sale or rental value of your home;
- reducing your greenhouse gas emissions and energy consumption;
- contributing to the fight against global warming.
What energy retrofitting subsidies are available in Luxembourg?
Energy retrofitting work and energy efficiency improvements tend to be costly, as does the technical equipment used.
The Luxembourg State has introduced a series of tools to help residents finance such work:
- interest subsidy on climate loans;
- "Klimabonus” financial aid;
- financial aid for an energy consultation;
- the subsidy for improved energy efficiency;
- the financial incentive for electricity produced from renewable energy sources;
- reduced VAT for energy retrofitting.
These subsidies form an integral part of a vital strategy to fuel Luxembourg’s ecological transition and reduce overall energy consumption.
Interest subsidy on climate loans
The interest subsidy on climate mortgages is designed to encourage sustainable renovation of homes that are over 10 years old by offering loans that meet the criteria for subsidised renovation work.
BGL BNP Paribas is one of the contracted banks that can extend this type of loan.
Eligibility criteria for the interest subsidy:
- the climate loan must be backed by a mortgage;
- the building must have been used as a main residence for at least 10 years;
- the home must be within Luxembourg;
- solar panels are not eligible for interest subsidies.
The terms of the interest subsidy granted by the State include:
- a reduced rate: limited to 1.5% (without exceeding the effective rate of the loan);
- a maximum loan amount used in its calculation: €100,000;
- a term: 15 years (from when the first tranche of the interest subsidy is paid);
- The total interest subsidy amount may not exceed 10% of the loan principal or the portion of the loan taken out to pay for work.
Did you know?
What to do if :
- your dwelling is less than 10 years old;
- your dwelling is based outside Luxembourg;
- don’t want a mortgage-backed climate loan?
Bear in mind that other financing solutions are available for your energy retrofitting work:
- the low-interest energy retrofitting personal loan;
- the standard home loan.
Energy retrofitting grants (Klimabonus)
In addition to climate loans, the State offers a Klimabonus for sustainable energy retrofitting of a residential building over 10 years old located in Luxembourg and for the use of renewable energy sources.
Klimabonus grant amounts vary based on several factors:
- the type of work carried out;
- the cost of the work;
- the type of dwelling;
- the energy performance standard achieved after the renovation;
- the ecological quality/sustainability of the materials used;
- the way in which materials are installed (whether or not they can be removed).
Specifically, these grants can be requested for the following work:
- insulation of external walls;
- roof insulation;
- insulation of walls in contact with the ground or an unheated zone;
- insulation of a ceiling slab in contact with an unheated attic;
- insulation of a floor slab in contact with an unheated cellar, the ground or the exterior;
- replacing windows and French windows;
- installation of centralised or decentralised controlled ventilation systems;
- solar thermal and photovoltaic installations;
- installation of a heat pump, a boiler or stove powered by wood or wood pellets, or a district heating network.
Did you know?
To get the interest subsidy, you must have been awarded a Klimabonus for the parts covered by the climate loan.
How to apply for a Klimabonus grant:
Other energy retrofitting subsidies
Other forms of energy retrofitting subsidies are available (this is not an exhaustive list):
||Financial incentive for electricity produced from renewable energy sources||Reduced VAT for energy retrofitting|
|Subsidy for an energy consultation||Electricity generated by installing a photovoltaic, wind or hydroelectric system, or using biogas or biomass technology||3% for energy retrofitting work rather than 17% (capped at EUR 50,000 per dwelling)|
Financial aid for the energy consultation
To be eligible for a Klimabonus grant, you must have an energy consultation with a consultant approved by the Ministry of the Environment, Climate and Sustainable Development.
A subsidy for the energy consultation may be granted by the State.
The financial incentive for electricity produced from renewable energy sources
If you generate your own electricity using a photovoltaic, wind or hydroelectric system, or using biogas or biomass technology, you might qualify for a financial incentive from the State.
The energy generated must be funnelled back into the network of a national operator. This incentive takes the form of a subsidy for each kWh of electricity generated, which is added to the market price paid by the operator.
Reduced VAT for energy retrofitting
The Luxembourg State applies a reduced VAT rate of 3% rather than 17% to renovations of properties intended as a primary place of residence. However, this tax concession cannot exceed EUR 50,000 per dwelling.
Did you know?
Not all works benefit from the reduced rate. For example, fitted kitchens, the installation of technical equipment such as alarms, interior blinds and curtains, and landscaping are not included.
Everything you need to know about energy retrofitting subsidies
A list of all available energy renovation subsidies can be found at guichet.lu.
Take the time to conduct thorough research before starting your renovation, especially if you’re relying on this financial aid as part of your energy retrofitting budget.
(1)(*) There are certain cases, such as installing a photovoltaic system or boiler, where the energy consultation is not mandatory, but the client can apply for a subsidy anyway; only work affecting the external shell of the building necessitates an energy consultation).
Energy retrofitting loan
Take out a personal loan on preferential terms today to improve the energy efficiency of your home.
Take advantage of a BGL BNP Paribas home loan and the benefits it offers for your energy retrofitting project.
Protection against rising prices, and an ecological and economical choice.