What aid for buying or building in Luxembourg?
Rudolphe ABEN
Do you want to own the place where you sleep at night one day? In order to encourage home ownership and housing construction in Luxembourg, the government offers a number of grants and subsidies for these purposes. What programs are currently in effect? When would you use them to your advantage? This article provides a concise summary of all the data you will need to make an informed decision on how to pay for your new possession.
Government aid for a real estate project
Did you know that the state, specifically the Department of Housing, funds the majority of homebuyer assistance? Some people can benefit from this aid. The application is generally addressed directly to the Housing Aid Department.
The purchase premium: The Luxembourg down payment assistance program
The financing of important expenses is assured by the purchase (or construction) premium. This program is intended for Luxembourgers interested in buying or building their own home. Its cost can vary from 250 to 9,700 euros. To be eligible, you must meet a number of prerequisites. Area requirements range from 65 to 140 square meters for single-family homes and 45 to 120 square meters for multi-family units. Keep in mind, however, that this tool comes with conditions related to financial stability and family size.
Submit an application for an acquisition bonus:
- If you need financial assistance to pay your rent, the first step is to fill out a housing assistance application.
- Then submit it to the housing assistance department within 12 months of signing the deed.
Financed by a tax on interest
It is possible that you can benefit from an interest subsidy from the State if you have taken out a mortgage loan to buy or build your main home. Specifically, you can get a 0.50% reduction on your loan rate for each child living in your household, up to a maximum reduction of 3%.
The program can be used during the construction process, when purchasing a property or during a renovation
This interest subsidy is only available to those who:
- Have at least one child who is fully dependent on them
- Do not have other loan holders
- Are not co-owners, usufructuaries, or owners of other real estate (in Luxembourg or abroad).
Persons applying for housing assistance must do so using the appropriate application form. Then, before the renovation or construction work begins, or the sale of a property is finalized, it must be forwarded to the housing assistance service.
Interest Subsidy
The interest subsidy is also used for the interest subsidy. The program offers an interest rebate of between 0.575 and 2.45% on loans up to €175,000. The financial situation and stability of the beneficiary are taken into account in determining this rate.
It is important to take into account the characteristics of the surface for this type of aid:
- Apartments must have an area between 45 and 120 square meters, while houses must have an area between 65 and 140 square meters.
- This surface requirement does not apply to the purchase of a house built before September 10, 1944.
- Applications for both the construction bonus and the purchase bonus can be submitted at the same time.
Only people who have saved money with the intention of building or buying a residence in Luxembourg can participate in this program. It is possible to award it at the same time as a construction premium or an acquisition premium. The bonus is conditional on the beneficiary maintaining a certain savings account with an initial deposit of €100 for a minimum of three years.