Luxembourg strengthens support for property buyers

On 25 June 2025, the Luxembourg Chamber of Deputies approved two laws aimed at reducing the tax burden on home purchases and supporting the construction sector. These measures apply both to individuals purchasing a home for their own residence and to investors in rental and social property.

The first law (No. 8540) enshrines permanently the increased tax credit "Bëllegen Akt" of €40,000 per person when buying a home for personal use. This measure acts as a tool to compensate for notary costs associated with the registration of ownership and is intended to lower the barrier to entry into the market, especially for young buyers.

The second law (No. 8547) extends temporary tax incentives in the real estate sector. In order to benefit from them, buyers and sellers must register with the Tax Administration by 30 June 2025 either a signed preliminary sales contract or a reservation contract for housing under construction. The final notarial deed must be executed no later than 30 September 2025.

Among the key measures to be applied under the package are:

• Rental tax credit up to €20,000 per person,
• a 50% reduction in the tax base for the registration and transcription tax,
• accelerated depreciation of real estate at 6%,
• favourable taxation of resale profits - one quarter of the total tax,
• exemption from capital gains tax on the transfer of properties to social rented properties or on the construction of A+ energy class housing.

Finance Minister Gilles Roth commented on the decision as an important and timely step: "This is good news first and foremost for buyers, including young buyers. It is also a support for the entire construction sector. We have acted quickly and will continue to react if necessary."

The measures taken are aimed not only at stimulating demand, but also at revitalising the stagnant housing market, which is under pressure due to rising construction costs and limited supply. At the same time, the government is trying to integrate environmental goals through support for energy-efficient construction.