Luxembourg has earmarked €480 million for the purchase of affordable flats

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Ministers Claude Meisch, Léon Gloden and Max Hahn responded to a parliamentary enquiry by MP Marc Goergen on what steps are being taken to help families facing difficulties in finding housing.

In the face of a severe housing crisis, the Government is seeking to accelerate the construction of affordable housing and ease the financial burden on families. Among the key measures:

Income limits for housing assistance increased

Limits for single people have been raised by an average of 6 per cent and for families with children by 8-25 per cent, depending on the number of children. Fifty-nine per cent of households can now qualify for state subsidies when buying a home, and 80 per cent of families can now qualify for moderately priced housing (vente à coût modéré).

Access to mortgage lending has been simplified

The subsidy interest rate has been increased to 3.5 per cent to help families get approved for mortgages.

Reduced financial burden on tenants

The security deposit has been reduced from 3 to 2 months' rent and the agency commission is now shared between the tenant and the owner. Additionally, rent subsidies have been increased: for each child in the family, the payment has increased from 40 to 80 euros.

More opportunities to buy affordable housing

The government has raised income limits for the purchase of flats built by public developers (Fonds du Logement, SNHBM and municipalities), which increases the number of households eligible for subsidised housing. Now 70 per cent of households can buy affordable housing and 80 per cent can buy moderately priced housing.

Stimulating the affordable housing market

Property owners who rent out social rented accommodation now get tax relief of up to 90 per cent instead of the previous 75 per cent.

Investments in housing stock

480 million euros have been allocated for the purchase of homes under the VEFA scheme (buying property under construction) and the launch of private sector partnerships (PPP).

Supporting municipalities in the creation of affordable housing

A separate utility assistance fund has been established to encourage municipalities to build more affordable housing in their areas.

The measures taken are aimed at giving families more opportunities to find or buy a home. However, even with the expanded support, the housing crisis in Luxembourg remains an acute problem requiring long-term solutions. The Government continues to seek new tools to accelerate the increase in affordable housing and support citizens in the face of rising living costs.

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