Buying a home in Luxembourg remains a real challenge for many households. Between high property prices, acquisition costs and financing requirements, becoming a homeowner often represents a significant financial commitment.
To support the housing market, the Luxembourg Government unveiled a new package of measures on 16 July 2026, entitled "Booster fir de Wunnengsbau", introduced by Claude Meisch, Minister for Housing and Spatial Planning, and Gilles Roth, Minister of Finance.
The reform pursues three main objectives:
- build more homes;
- make housing more affordable;
- support home ownership.
At Albalux Crédit, one question comes up time and again: "In practical terms, how could these measures affect my property purchase?"
Here are the main changes.
Why this reform?
For several years, Luxembourg has faced a growing imbalance between housing supply and demand.
The consequences include:
- high property prices;
- steadily increasing rents;
- home ownership becoming increasingly difficult, particularly for first-time buyers.
home ownership becoming increasingly difficult, particularly for first-time buyers.
The Booster fir de Wunnengsbau programme aims to address this situation by combining tax incentives, financial support and new investment mechanisms.
The tax credit known as the Bëllegen Akt has been increased from €40,000 to €45,000 per person.
For a couple purchasing their main residence, this now represents up to €90,000 in tax credits against registration duties, making it possible to purchase a property worth approximately €640,000 without paying registration duties, provided the legal eligibility requirements are met.
The reform introduces a temporary exemption from registration and transcription duties on the construction portion of certain VEFA (Vente en l'État Futur d'Achèvement – off-plan) purchases intended to become the buyer's main residence.
In practical terms, where construction is no more than 80% complete at the time of purchase, registration duties will only be payable on the land value, while the construction element will be exempt.
This measure applies to acquisitions completed from 16 July 2026 for a period of three years. Buyers who signed their purchase deed between the announcement of the measure and the entry into force of the legislation may also benefit by submitting an application to the Registration Duties, Estates and VAT Administration.
The Government is strengthening several schemes designed to facilitate home financing. Among the main changes:
- for first-time buyers where at least one borrower is aged 35 or under, the loan ceiling taken into account when calculating the interest subsidy increases from €200,000 to €300,000;
- under the general scheme, the ceiling increases to €250,000, with an additional €30,000 per dependent child (compared with €20,000 previously).
The amount ultimately granted will depend on each household's individual circumstances and the conditions laid down in the applicable legislation.
Young purchasers of affordable housing will now be eligible for both the Home Ownership Grant and the Savings Grant, financial support previously reserved for purchases made on the private market.
Depending on each household's circumstances, these grants may complement the financing support described above and further reduce the overall cost of the property purchase.
The Government also aims to stimulate the development of affordable housing by making certain rental investments more attractive. Among the key measures announced are:
- a reduced VAT rate of 8% for qualifying social rental properties, subject to several conditions: a maximum floor area of 120 m², price caps based on the Housing Observatory reference values, a maximum rental yield of 4%, a minimum rental period of ten years, and rental to a household recognised as eligible by the Ministry of Housing;
- a new accelerated depreciation scheme known as "3×6", allowing depreciation at 6% per year for six years, on a tax base capped at €600,000 per building.
The objective is to encourage the construction of new housing and gradually increase the available supply.
Two additional measures are intended to support the development of new residential projects. These include:
- the launch, in early 2027, of a €250 million Housing Bond, available to private investors to finance affordable housing projects, with interest exempt from the 20% withholding tax;
- an additional €300 million allocated to the State's VEFA acquisition programme, which has already enabled the purchase or reservation of 830 affordable homes through an initial €480 million funding envelope. The scheme will now allow the State to acquire only part of a residential development, with regional eligibility ceilings based on six categories of municipalities.
The objective is to accelerate the delivery of new homes and help restore a better balance between housing supply and demand.
Image credit: © 2026 Regions Bank. All rights reserved.
What does this mean in practice for a future buyer?
Let's take a practical example.
Emma and Julien are planning to buy their first apartment in Luxembourg.
Depending on their personal circumstances and provided their project meets the eligibility criteria, they could:
- benefit from the increased Bëllegen Akt tax credit;
- qualify for a higher interest subsidy ceiling, particularly if at least one of them is aged 35 or under;
- benefit from the registration duty exemption on the construction element of an off-plan (VEFA) purchase;
- combine several forms of financial support to reduce the overall cost of their property purchase.
Individually, each of these benefits may appear relatively modest.
Combined, however, they could represent tens of thousands of euros in savings over the course of a property purchase.
Key takeaways
The Booster fir de Wunnengsbau represents one of the Luxembourg Government's most significant housing reforms in recent years.
The main measures include:
- increasing the Bëllegen Akt to €45,000 per person;
- introducing a registration duty exemption for certain VEFA purchases;
- strengthening interest subsidies, particularly for buyers aged 35 or under;
- extending the Home Ownership Grant and Savings Grant to young purchasers of affordable housing;
- introducing an 8% VAT rate and the new 3×6 accelerated depreciation scheme to encourage investment in rental housing;
- launching a €250 million Housing Bond and expanding the State's VEFA acquisition programme.
At Albalux Crédit, we help homebuyers every day to assess their borrowing capacity and optimise their financing.
Understanding the financial support available from the very beginning of a property project often makes it possible to maximise your budget and prepare your purchase under the best possible conditions.
Thinking about buying a home?
Our advisers can help you, free of charge, to:
- assess your borrowing capacity;
- identify the financial support you may be entitled to;
- compare mortgage offers from Luxembourg's leading banks;
- build a financing solution tailored to your circumstances.
Book an appointment with an Albalux Crédit adviser and move forward with your property project with confidence.
The information presented in this article is based on the official announcements made by the Government of Luxembourg and available at the date of publication. Some measures are still subject to the adoption of the relevant legislation, and their application will depend on their entry into force and the legal conditions ultimately established.
Watch the presentation of the package of measures here.
Official sources
- Gouvernement du Luxembourg – "Booster fir de Wunnengsbau" − Méi bauen. Méi erschwénglech. Méi Wunnengen. - Le gouvernement luxembourgeois
- Ministère du Logement et de l'Aménagement du territoire : https://logement.public.lu
