The three items
| Item | What it covers |
|---|---|
| Land | acquisition, servicing, purchase costs |
| Construction | works, from shell to finishes |
| Ancillary costs | design, formalities, connections, external works |
None of these items can be ignored, and the last two are systematically underestimated by occasional clients.
Luxembourg professional sources put ancillary costs in the order of fifteen to twenty per cent of the construction budget, which makes it an item rather than a detail.
Which one decides
This is the point that structures this guide. Land weighs more heavily than the works.
Land shows a price range incomparable with that of construction. Observed land values run from a few hundred euros per square metre in the north to several thousand in the capital.
Construction prices also vary, with finish level and construction method, but within a far narrower band.
Consequence: the choice of municipality weighs more on the total budget than the choice of finish level.
This is developed in the article on why land dominates the budget. The land share is quantified there.
The order in which to fix them
Four steps, and the order is not the instinctive one. Land is priced before the works.
First fix the total envelope available, financing included.
Then decide the location, since it absorbs the most variable part of the envelope.
Determine the developable volume achievable on the plot considered, which governs the brief.
Finally define the brief and the finish level, with what remains.
The reverse order is the commonest and the most painful. Defining a brief then looking for land leads to discovering that the envelope does not allow the desired location, once the brief is already settled.
The two errors of reasoning
They recur constantly and are easily corrected. These errors concern the scope of the budget.
Reasoning on the construction price per square metre alone. That figure says nothing about the total budget, since it excludes the most variable item.
Adding quantities that do not measure the same thing. A land price per are and a construction price per square metre of living area do not add up directly, as the article on reading a price per are explains.
The only quantity allowing two projects to be compared is total cost per square metre of living area delivered, land and ancillary costs included.
What this guide does not cover
Three subjects belong to other guides, and cross-references avoid duplication. They concern the permit, VAT and the specification.
Tax and support, notably the VAT rate applying to housing, whose prior authorisation mechanism is covered in the corresponding guide.
Development rules, which determine what may be built on a plot and belong to municipal planning.
The participants and their roles, whose fees are covered here but whose function belongs to the guide on working in Luxembourg.
The articles in this branch
The article on why land dominates the budget covers the central theme. The proportions are set out there.
The article on the three items and their proportions covers the real breakdown. The typical breakdown is given there.
The article on why building is expensive here covers the structural causes. The structural causes are explained there.
This article reflects the state of the data at the date of checking and serves professional orientation. It does not replace an estimate or consultation of the official sources.