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New Housing Measures in Luxembourg for 2026: Now Is the Perfect Time to Make Your Property Project a Reality!
The Luxembourg government has officially launched its new recovery plan, Booster fir de Wunnengsbau.” This package of measures introduces significant tax reductions, increased subsidies, and new financial incentives designed to boost construction and make homeownership more accessible.
If you’ve been waiting for the right time to buy or build, these new measures offer unprecedented financial relief. Here’s a breakdown of the key benefits in three main areas.
- Major Tax Reductions and Enhanced Support for Homebuyers
Buying your primary residence is now more attractive than ever thanks to immediate financial incentives:
Higher “Bëllegen Akt” Tax Credit
The tax credit increases from €40,000 to €45,000 per person. For a couple, this means up to €90,000 in direct savings on registration duties. This measure is now permanent, providing long-term certainty for buyers.
0% Registration Duties on Off-Plan Construction (VEFA)
When purchasing an off-plan property (*Vente en l’État Futur d’Achèvement – VEFA*), the 7% registration duty applies only to the value of the land. The construction portion is completely exempt, provided the building is less than 80% complete at the time of purchase. This temporary measure is available for three years.
Enhanced Interest Rate Subsidies
To help offset higher borrowing costs, the government has significantly increased interest subsidies for first-time buyers and families, substantially reducing monthly mortgage repayments.
- Strong Incentives for Buy-to-Let Investors
For those looking to grow their wealth through rental property, the government has reintroduced highly attractive tax benefits:
Return of Accelerated Depreciation
Investors can once again benefit from a 6% accelerated depreciation rate for six years when purchasing a new property intended for rental. This incentive applies to investments of up to €600,000 per property, helping maximize returns on residential investments.
New Reduced 8% VAT Rate
A targeted 8% VAT rate is being introduced for affordable rental housing. It applies to new-build properties under 100 m² (or 120 m², depending on the property type) that are rented for at least 10 years under a regulated affordable rental scheme.
- A More Stable Market with Strong Government Support
The government is investing substantial resources to strengthen the construction sector and ensure long-term market stability:
€300 Million Government Acquisition Programme
The State will actively purchase selected private residential developments and convert them into public affordable housing. This initiative secures ongoing construction projects across the country and helps ensure they are completed without interruption.
Launch of the Housing Bond
Starting in 2027, the government will issue a €250 million Housing Bond, allowing citizens to invest directly in Luxembourg’s national housing funds. This will provide a stable and continuous source of financing for future residential construction.
Ready to build your own home sweet home?
Contact Team CLK today and let us help bring your construction project to life.