Luxembourg Housing Booster July 2026

In July 2026, the Luxembourg Government introduced the "Booster fir de Wunnengsbau", a comprehensive package of seven measures designed to improve access to homeownership, stimulate real estate investment, and accelerate residential construction.

A Top Government Priority

Finance Minister Gilles Roth stated that housing is the number one concern of citizens and an absolute priority for the Government.

The objective of the programme is to combine tax relief, investment incentives, and private savings mobilisation to make homeownership more accessible and increase the supply of housing.

The 7 Measures of the "Booster fir de Wunnengsbau"

1. Exemption from Registration and Transcription Duties for Off-Plan Purchases (VEFA)

Individuals purchasing a property as their primary residence will benefit from a temporary exemption from registration and transcription duties on the construction value of the property when the building is no more than 80% completed at the time of purchase.

• Duties remain payable only on the value of the land. 
• Applies to VEFA (off-plan) purchase agreements signed from 16 July 2026. 
• The measure will remain in force for three years. 

2. Increase of the "Bëllegen Akt" Tax Credit to €45,000

The Bëllegen Akt tax credit increases from €40,000 to €45,000 per individual.

This means:

• up to €90,000 for a couple; 
• the purchase of a property valued at approximately €640,000 without registration duties. 

The measure applies from 16 July 2026.

3. Reduced 8% VAT for Social Rental Housing

A reduced 8% VAT rate is introduced for the development of affordable social rental housing.

To qualify, the property must meet several conditions:

• maximum living area of 120 m²; 
• sale price per square metre not exceeding the regional median published by the Housing Observatory; 
• maximum rental yield of 4%; 
• minimum rental period of 10 years; 
• tenant certified as eligible by the Ministry of Housing. 

4. New Accelerated Depreciation Scheme

A new accelerated depreciation system based on the "3 x 6" principle is introduced to improve the profitability of residential investment.

It provides:

• 6% depreciation for 6 years; 
• on a depreciable base of up to €600,000 per property. 

Above this threshold, a 2% depreciation rate applies to the entire depreciable value without time limitation.

The new regime becomes the standard for acquisitions from 1 January 2027.

5. Introduction of the Housing Bond

Following the success of the Defence Bond, the Government will launch a €250 million Housing Bond to finance affordable housing projects.

Interest income will be exempt from the 20% withholding tax.

The bond is expected to be launched in early 2027.

6. Enhanced Housing Assistance

The Government is strengthening several housing support schemes.

Young First-Time Buyers (35 years old or younger)

The maximum eligible loan amount for the interest subsidy increases:

• from €200,000 to €300,000. 

This measure is designed to reduce monthly mortgage repayments and make homeownership more affordable for young households.

Support for All Households

The general eligible loan ceiling increases:

• from €200,000 to €250,000. 

The additional amount granted for each dependent child increases:

• from €20,000 to €30,000, 

allowing a maximum eligible loan amount of €370,000.

Homeownership Grant

Young buyers aged 35 or younger purchasing affordable housing will now also be eligible for:

• the Homeownership Grant; 
• the Savings Grant. 

7. Expansion of the State VEFA Programme

The Luxembourg Government will invest an additional €300 million to continue its affordable housing acquisition programme through VEFA (off-plan purchases).

Key improvements include:

• partial acquisition of residential developments; 
• stronger support for developers; 
• faster construction starts; 
• regionally adapted acquisition ceilings based on six geographical categories. 

The initial programme enabled the State to acquire or reserve 830 affordable homes with an investment of €480 million.

Conclusion

With the Booster fir de Wunnengsbau, the Luxembourg Government has introduced one of its most ambitious housing initiatives in recent years. The package aims to improve access to homeownership, encourage real estate investment, support young households, and accelerate the delivery of affordable housing throughout Luxembourg.

Source

Official press release of the Ministry of Finance and the Ministry of Housing and Spatial Planning (July 2026).