LSAP proposes reforms to safeguard off-plan buyers

At a press conference on Tuesday morning, the Luxembourg Socialist Workers' Party (LSAP) called for stronger protections for individuals purchasing off-plan properties (VEFA). The opposition party stressed the need to rebuild trust in the new-build market, which has been shaken by delays and bankruptcies leaving buyers vulnerable.

LSAP parliamentary group leader Taina Bofferding highlighted the growing scepticism surrounding off-plan property purchases, attributing it to "isolated cases" of projects that failed to deliver. These incidents, which have been covered in the media, have undermined buyer confidence. Bofferding criticised the outdated legal framework, which dates back to the 1970s, and noted that countries like France and Belgium have modernised their regulations in this area.

When asked about the LSAP's responsibility for the lack of progress during its 20 years in government, Bofferding acknowledged "new developments" in the sector and emphasised the party's intention to contribute constructively with specific proposals to better protect buyers.

LSAP MP Paulette Lenert voiced sharp criticism of Prime Minister Luc Frieden, accusing him of prioritising tax advantages for investors over buyer protections. Lenert argued that the current guarantees for refunds or project completion are inadequate.

She pointed out that buyers must first prove that construction progress has stalled, often requiring lengthy and costly court proceedings. "Many people give up or accept less than they are entitled to because of the expenses and delays involved," Lenert said, urging for reforms to provide more effective safeguards for buyers.

Ten measures to protect off-plan property buyers

The LSAP has outlined ten key proposals to better safeguard buyers of off-plan properties. Central to these proposals is ensuring that buyers can recover the full value of their payments, including the cost of the land. The party pointed out that many buyers are co-owners, meaning that when construction halts, they are often left with unsellable land and little recourse to find new developers to complete the project.

One of the LSAP's recommendations is to guarantee refunds for land value in such cases. Additional measures include streamlining judicial procedures, requiring clearer information in project design briefs, and prohibiting the automatic indexing of construction costs.

Addressing concerns about the potential financial burden these measures could place on developers, Bofferding said: "It's not certain that more costs will arise. What is important to us is that clear rules are established for everyone."

While the LSAP welcomed the voluntary charter introduced by the Chamber of Real Estate, the party insisted that such protections must be codified into law to ensure universal application and accountability.

Lenert stressed the need for more robust data on the off-plan property market. Drawing from her experience as a former health minister, she argued that gathering reliable data, even during times of crisis, is both feasible and essential for informed decision-making.

Bofferding, formerly the home affairs minister, criticised the government for abandoning several of her proposed reforms, including changes to property tax, the introduction of a mobilisation tax, ministerial restructuring, and a project on building land contracts. She accused the ruling Christian Social People's Party (CSV) and the Democratic Party (DP) of lacking the political courage to address these pressing issues.