“Booster fir de Wunnengsbau”: New measures strengthen Luxembourg’s real estate market

One of the key new measures concerns buyers of newly built properties purchased through a VEFA (Vente en état futur d’achèvement – purchase of a property before completion).

When purchasing a property that is not yet fully completed at the time the purchase agreement is signed, buyers will benefit from a temporary financial advantage:

• If the property is acquired with a construction progress of maximum 80%, registration and transcription duties (“droits d’enregistrement et de transcription”) will only apply to the land portion of the purchase price.
• The measure applies to VEFA purchase agreements concluded from 16 July 2026 onwards.

This adjustment makes the purchase of a new-build apartment financially more attractive and can particularly facilitate access to modern new-build projects for first-time buyers.

One of the most important changes for private buyers is the increase of the “Bëllegen Akt” tax credit.

The maximum tax benefit when purchasing a property for personal use will increase:

• from €40,000 to €45,000 per person;
• applicable to purchases intended as a primary residence;
• effective from 16 July 2026.

This increase provides buyers with additional financial support when acquiring their home.

It is particularly beneficial for young families and first-time buyers taking their first step towards home ownership.

Another important element of the programme concerns the improvement of government support measures linked to property purchases.

Young first-time buyers will particularly benefit from stronger interest subsidies:

• For buyers aged 35 or younger, the maximum loan amount taken into account for calculating the interest subsidy will increase from €200,000 to €300,000.
• The general maximum eligible loan amount will increase from €200,000 to €250,000.
• The additional allowance per dependent child will increase from €20,000 to €30,000.

These measures aim to reduce the monthly financial burden of mortgage loans and enable more households to achieve their home ownership plans.

The new package also introduces important changes for property owners and investors in the rental housing sector.

A new accelerated depreciation scheme aims to make rental property investments more attractive:

• Depreciation of 6% over a period of 6 years;
• Applicable to a depreciable base of up to €600,000 per building;
• Specific rules apply for investments exceeding this amount.

This tax improvement may have a positive impact on the profitability of real estate investments and create an additional incentive to invest in Luxembourg’s rental property market.

In addition to measures directly targeting buyers and traditional real estate investors, the government is introducing specific support for the creation of affordable rental housing.

A reduced VAT rate of 8% will apply to the creation of rental housing with a social purpose, provided that certain conditions are met.

These conditions include:

• maximum dwelling size requirements;
• rent limitations;
• long-term rental obligations;
• renting to tenants who meet the eligibility criteria.

This measure is mainly aimed at professional investors and developers who wish to create housing with a long-term social objective.

Do you have any questions about the new measures, or would you like to know how they might benefit your own property project? Our team will be happy to advise you personally and provide expert support on all matters relating to buying or investing in property in Luxembourg.