The Luxembourg property market is about to enter a significant new phase. In order to support housebuilding, make home ownership easier and encourage investment, the Luxembourg Government has presented a package of measures called “Booster fir de Wunnengsbau”.

This plan, which follows on from the initiatives already put in place to revive the property sector, introduces several major changes. They include an increase in the Bëllegen Akttax credit, an exemption from registration duties for certain off-plan homes, new support for young buyers and tax measures encouraging buy-to-let investment.

For future owners and investors alike, these announcements represent real opportunities. They also come, however, with new rules and conditions of application that must be understood before carrying out a property project.

In this article, our brokers set out each of the announced measures to help you understand how they work, what they offer and how they affect your financing.

Why were these new measures awaited?

For several years, the Luxembourg property market has been going through a particularly contrasting period.

After more than a decade of sharply rising prices, the rapid increase in interest rates profoundly changed the conditions for obtaining a mortgage. Many households saw their borrowing capacity fall, while some projects were simply postponed.

At the same time, several property developers slowed down or suspended their programmes in the face of falling demand and a more uncertain economic environment.

The result: many homes have remained waiting to be marketed, transactions have declined and the construction sector as a whole has suffered a marked slowdown.

The Booster fir de Wunnengsbau is designed precisely to recreate positive momentum by acting on several levers at once:

• making it easier to buy a main residence;
• encouraging first-time buyers to take the step;
• supporting private investors;
• promoting the creation of affordable housing;
• reviving off-plan property programmes;
• lastingly increasing the supply of housing in Luxembourg.

Rather than a stand-alone measure, this is therefore a genuine action plan intended to support all the players in the property market.

What you will find in this article

In the course of this analysis, we look in detail at each of the seven measures announced by the Government.

You will discover in particular:

• how the exemption from registration duties on certain off-plan homes works;
• why the Bëllegen Akt now rises to €45,000 per person;
• the new support available to young first-time buyers;
• the new tax regime granted to property investors;
• the conditions for the 8 % reduced VAT rate on certain rental homes;
• how the future Housing Bond will work;
• the practical consequences of these measures for your property project.

Our aim is to give you a clear, practical and accessible overview so that you can make the right decisions when financing your future home.

Excellent news… but every situation is different

Although these new provisions are a significant step forward for many households, they do not apply automatically to every property project.

Depending on your age, your family situation, the type of property bought, how it is acquired or your objective (main residence or buy-to-let), the advantages you can claim will differ.

That is why it is strongly recommended to review your financing before signing a preliminary agreement or a reservation contract.

At Prêt Immo, we assess your situation free of charge in order to identify the support you can claim and to negotiate the best financing terms with our partner banks.

1. Exemption from registration duties on certain off-plan purchases

One of the most striking measures of the Booster fir de Wunnengsbau concerns people wishing to buy a new home off-plan ( vente en l’état futur d’achèvement, VEFA).

Until now, registration and transcription duties were calculated on the whole value of the property, that is, the land and the building.

From now on, where a home is no more than 80 % complete at the time of purchase, those duties will be payable only on the value of the land.

This exemption represents a potentially substantial saving for future owners.

Who can benefit from this exemption?

This measure is reserved for individuals buying a home intended to become their main residence.

It concerns off-plan purchases whose contract is signed on or after 16 July 2026 , and will remain in force for a period of three years.

Buyers who signed their deed between the announcement of the measure and the official entry into force of the law can also benefit, provided they apply to the Administration de l’enregistrement, des domaines et de la TVA.

Why does this measure matter?

Buying a new home often involves high acquisition costs.

By removing the registration duties on the part corresponding to the building, the Government immediately reduces the overall cost of the project.

That saving may in particular allow you:

• to reduce the deposit required;
• to keep more savings for works or fitting out;
• to improve the financing plan presented to the bank;
• to make accessible certain projects that were previously too costly.

For many households, this measure could be the difference between a workable project… and a postponed one.

Prêt Immo’s advice 💡
If you are considering buying a new home off-plan, it is advisable to have the saving generated by this exemption costed precisely. Depending on the project, the gain can amount to several thousand euros.

2. The Bëllegen Akt rises to €45,000: excellent news for future owners

The Bëllegen Akt is already one of the best-known forms of tax support in Luxembourg for people buying their main residence.

With the Booster fir de Wunnengsbau, this support is strengthened further.

From 16 July 2026, the tax credit rises from €40,000 to €45,000 per individual.

This increase makes it possible to buy a home worth around €640,000 without paying registration duties, subject to meeting the conditions laid down in the legislation.

What is the Bëllegen Akt?

The principle is relatively simple.

When buying a main residence, the registration duties payable on signature of the deed can be reduced, or even removed entirely, thanks to this tax credit.

The aim is to lower the cost of acquisition so as to make home ownership easier.

This support has benefited many Luxembourg households for several years.

The increase in its ceiling is therefore a particularly awaited development.

An even more attractive advantage for a couple

The tax credit is granted per person.

In practical terms, a couple buying a property together can obtain an advantage of up to €90,000, subject to meeting the eligibility conditions.

At a time when property prices remain high, this change represents a significant saving.

Which buyers are concerned?

This increase concerns people acquiring a home for their own occupation.

As with the first measure, deeds concluded between the government announcement and the official entry into force of the law can also benefit from the new ceiling, by applying to the Administration de l’enregistrement.

What impact on your financing?

Even though the Bëllegen Akt has no direct effect on the rate offered by the bank, it improves the overall budget of your purchase.

By reducing the costs linked to the purchase, it becomes easier:

• to build up your deposit;
• to limit the size of the loan required;
• to keep a financial reserve for the additional costs;
• to improve your financial balance from the first years of the loan.

For many first-time buyers, this measure is a genuine boost.

Prêt Immo’s advice 💡
The Bëllegen Akt is no substitute for a financing review. Before signing a preliminary sales agreement, it is essential to check your borrowing capacity and to include all the support you can claim. A broker can guide you through this and optimise your financing plan.

3. An 8 % reduced VAT rate to encourage social-purpose rental housing

The Booster fir de Wunnengsbau is not limited to future owners. The Government also wants to stimulate the creation of homes intended for affordable letting.

To that end, a VAT rate reduced to 8 % will apply to certain social-purpose rental housing projects.

The aim is clear: to make these investments more attractive in order to increase the supply of affordable homes on the Luxembourg market.

Precise conditions for the reduced rate

This measure will not apply to every buy-to-let investment.

To qualify for the reduced VAT rate, several criteria must be met, in particular:

• a maximum floor area of 120 m² ;
• a sale price per square metre not exceeding the median price published by the Observatoire de l’habitat for the region concerned;
• a rental yield capped at 4 % of the net capital invested;
• letting for a minimum period of 10 years ;
• a tenant recognised as eligible by the Ministry of Housing and Spatial Planning.

These conditions are intended to ensure that the tax advantage genuinely serves the development of affordable housing.

What impact on the property market?

Although this measure concerns a specific segment of the market, it could have positive effects on the sector as a whole.

By encouraging the creation of rental homes at controlled prices, the Government hopes:

• to increase the supply available;
• to reduce pressure on some very tight markets;
• to encourage new investors to launch property projects.

In the medium term, this momentum could help rebalance the housing market in Luxembourg.

4. A new accelerated depreciation regime to revive buy-to-let investment

Private investors play an essential part in developing the housing stock.

In order to revive investment, the Government is introducing a new accelerated depreciation regime, often summed up by the principle of “three times 6”.

This reform aims to improve the after-tax profitability of property investments.

The “three times 6” principle

The new arrangement provides for:

• depreciation of 6 % a year ;
• over a period of 6 years ;
• on a depreciable base of up to €600,000 per building.

Where that base is exceeded, depreciation of 2 % will apply to the whole depreciable value, with no time limit.

A transitional period

Purchases made in 2026 will enjoy a degree of flexibility.

Investors will be able to choose between:

• the current regime;
• or the new regime.

From 1 January 2027, the new arrangement will become the reference regime for new purchases.

Why does this measure matter?

Since interest rates rose, many investors have put their projects on hold.

By improving the tax treatment of buy-to-let investment, the Government is seeking:

• to make property investment attractive again;
• to support the construction of new homes;
• to strengthen the rental supply.

Although tax treatment is not the only criterion of a successful investment, it can strongly influence its overall profitability.

Prêt Immo’s advice 💡
Before investing, a full financial review is essential. Tax treatment is an important factor, but it must always be analysed alongside the financing, the rental income expected and the outlook for the market.

5. The Housing Bond: a new way of financing affordable housing

Among the most original announcements of the Booster fir de Wunnengsbauis the creation of a Housing Bond.

Inspired by the success of the Defence Bond, this citizens’ bond will allow private individuals to take part directly in financing new affordable homes.

A €250 million bond issue

The Government plans to raise €250 million through this bond issue.

The funds raised will support public housing policy and speed up the creation of new affordable homes.

The launch is planned for early 2027.

A tax advantage for savers

To encourage subscription, the interest generated by the Housing Bond will be exempt from the 20 % final withholding tax.

This favourable tax treatment is intended to make the product more attractive to private investors.

What is in it for future buyers?

At first sight, this measure may seem far removed from the concerns of a household wanting to buy its main residence.

Its purpose, however, is very much to foster a more dynamic property market.

By bringing new funding to affordable housing programmes, the Government hopes:

• to speed up the construction of new properties;
• to support public and semi-public operators;
• to increase the available supply step by step.

In the long run, that increase in supply could help stabilise the Luxembourg property market.

What to take away from these three new measures

With these new provisions, the Booster fir de Wunnengsbau is not seeking only to help buyers.

It also acts on several other essential levers:

• encouraging private investors;
• developing more affordable housing;
• attracting new funding to support construction.

This comprehensive approach shows the Government’s determination to revive the property market lastingly by acting simultaneously on supply, demand and investment.

6. Enhanced housing support to make home ownership easier

Among the announcements of the Booster fir de Wunnengsbau, the strengthening of individual housing support is probably one of the measures most awaited by households hoping to become owners.

The aim is simple: to allow more Luxembourgers and residents to become owners despite a context in which property prices remain high.

The Government has therefore chosen to strengthen several existing schemes in order to reduce the real cost of a mortgage.

An enhanced interest subsidy for young first-time buyers

Young households often face greater difficulty financing their first property purchase.

They generally have a smaller deposit, a savings capacity still being built up, and must cope with substantial repayments.

To address this reality, the ceiling of the loan taken into account when calculating the interest subsidy will be raised.

Where one of the borrowers is aged 35 or under, the maximum eligible loan will now rise from €200,000 to €300,000.

This change will allow many young buyers to receive greater support in financing their main residence.

An improvement that also concerns other households

The Government has not limited itself to first-time buyers.

The general housing support regime is being strengthened too.

The ceiling of the loan eligible for the interest subsidy now rises:

• from €200,000 to €250,000 ;
• with the increase per child rising from €20,000 to €30,000.

Depending on the composition of the household, the maximum ceiling can thus reach €370,000.

These new limits will allow more families to receive support in line with today’s property market costs.

A measure that also benefits cases already under way

Good news: these improvements do not concern new buyers only.

Beneficiaries whose case is already being paid out can also benefit from this uprating, subject to the arrangements set by the competent authorities.

This decision avoids a difference in treatment between households that bought just before the announcement and those signing their project in the coming months.

Prêt Immo’s advice 💡
Many buyers do not realise they can benefit from several support schemes at the same time. When reviewing your financing, it is important to check all the support available in order to optimise your budget and reduce the overall cost of your project.

A purchase grant now open to young buyers of affordable homes

Another important change: young people buying an affordable home or a moderately priced home will now be able to receive the home purchase grant as well as the savings premium.

Until now, this support was mainly reserved for purchases on the private market.

This extension will allow more young households to build up the deposit banks often require.

Here too, the main condition is that one of the future owners be aged 35 or under when the deed is signed.

This change responds directly to a problem frequently encountered on a first purchase: putting together a sufficient deposit while keeping a safety reserve.

7. An additional €300 million to accelerate off-plan programmes

The last major measure of the Booster fir de Wunnengsbau : continuing the programme for acquiring homes off-plan ( vente en l’état futur d’achèvement, VEFA).

The State plans to invest an additional €300 million in order to support the development of affordable housing.

This envelope adds to a first programme that had already mobilised €480 million.

Thanks to that first phase, close to 830 affordable homes were acquired or reserved.

Why continue this programme?

The Government considers that off-plan acquisition is today an effective tool for rapidly increasing the supply of housing.

By reserving homes directly with developers, the State:

• supports activity in the construction sector;
• secures certain property programmes;
• speeds up bringing affordable homes to the market.

This new envelope will also allow the scheme to be adapted to today’s market realities.

What impact for future buyers?

Although this measure mainly concerns public housing policy, it can have positive consequences for private individuals.

An increase in the supply available generally helps:

• to make the property market more fluid;
• to encourage the launch of new programmes;
• to offer buyers more choice.

In the medium term, this momentum could also help ease the pressure seen in certain segments of the market.

What to take away from the Booster fir de Wunnengsbau as a whole

Taken individually, each of the seven measures answers a specific problem.

But it is above all how they complement one another that deserves emphasis.

The Government is acting on several levers at once:

• reducing the cost of acquiring homes;
• supporting first-time buyers;
• encouraging investors;
• developing more affordable housing;
• reviving off-plan property programmes;
• improving the profitability of certain investments;
• strengthening the financial support granted to households.

This comprehensive approach reflects a determination to restore confidence among all the players in the Luxembourg property market.

While the real effects of these measures will have to be observed over the coming months, they already send a positive signal to anyone planning a purchase or an investment.

Prêt Immo’s view

At Prêt Immo, we welcome these new measures, which point towards a more accessible and more dynamic market.

Every situation nonetheless remains unique.

Depending on your age, your income, your deposit, the type of property sought or your plans for the future, the advantages you can claim may vary considerably.

That is why it is essential to have a tailored review carried out before signing anything.

Our brokers support you in:

• analysing your borrowing capacity;
• identifying the support you are eligible for;
• comparing the offers of the Luxembourg banks;
• optimising your financing plan;
• supporting you through to the signing of your mortgage.

Good financing is not just about obtaining a competitive rate. It is also about making full use of the support schemes put in place by the public authorities and building a sustainable project suited to your situation.