New housing stimulus package approved by Luxembourg's Chamber

Rudolphe ABENRudolphe ABEN - NEXTIMMO.LU

Rudolphe ABEN

New housing stimulus package approved by Luxembourg's Chamber

On May 14, 2024, Luxembourg's Chamber of Deputies approved a new housing stimulus package. This package was developed by the Ministry of Housing and Spatial Planning and the Ministry of Finance through intensive discussions with various representatives of the housing sector. The primary goal is to facilitate access to housing and support the construction sector through various short and medium-term measures.

Enhanced eligibility for housing assistance

More households are now eligible for various forms of assistance for renting and purchasing homes. Public investments in creating affordable housing have been strengthened. Additionally, a series of temporary tax measures—limited to the year 2024 and retroactive to January 1, 2024—have been implemented by the Ministry of Finance. These measures target homebuyers, homeowners, and investors.

Upcoming initiatives for housing sector collaboration

Beyond this initial housing stimulus package, the government is currently discussing additional measures to enhance collaboration between the public and private sectors, aiming at administrative simplification and mobilizing private and public land for creating more affordable housing. The results of these discussions will be communicated in June.

Increased housing assistance for more households

"In this challenging real estate market situation affecting more and more households, it was important for us to provide more support to families. We have therefore placed particular emphasis on families with children, who are particularly suffering from the shortage of affordable housing," highlighted Claude Meisch, Minister of Housing and Spatial Planning, at a press conference on May 15, 2024.

Revised income limits for housing assistance

The income limits for all individual housing assistance have been adjusted to reflect the corrected standard of living and household composition. Income limits for single individuals have increased by an average of 6%, and those for households with children have increased by 8% to 25%, depending on the number of children.

Enhanced support for tenants with children

The rent subsidy has been increased for households with dependent children. The amount per child in the household has been raised to 80 euros per child, up from the previous 40 euros.

Support for homebuyers

Homeownership subsidies: The income limits for homeownership subsidies have been increased, making 59% of all households theoretically eligible for a homeownership subsidy.

Interest subsidy: The maximum rate for the interest subsidy has been increased to 3.5%. This measure helps reduce the interest burden for homebuyers and applies to both new and existing mortgages, assisting households struggling with unexpectedly high interest rates. The income limits for interest subsidy eligibility have also been raised.

State guarantee for homeownership: In cases where the required down payment for a mortgage is unavailable, the state can provide a guarantee under certain conditions. The conditions for this state guarantee have been improved:

  • The maximum debtor rate for the guaranteed loan has been increased from 3% to 6%.

  • The maximum state guarantee rate relative to the project cost has been increased from 30% to 40%.

  • The income limits for state guarantee eligibility have been raised.

Expanded eligibility for affordable and moderately priced housing

The eligibility criteria for housing created by public developers (municipalities, the Housing Fund, SNHBM) for affordable or moderately priced sales have been raised. This significantly expands the pool of potential buyers for these properties, which are sold below market prices. Currently, 70% of households are eligible to purchase affordable housing, and 80% can purchase moderately priced housing.

Maintaining high investment levels for affordable housing creation

In addition to the measures included in the stimulus package, the state is committing substantial resources to massively invest in creating affordable housing.

Extension and strengthening of the VEFA program: This measure aims to increase the public affordable housing stock and support developers facing liquidity shortages who struggle to sell their housing projects. The special fund for affordable housing has been allocated an additional multi-annual budget of 480 million euros for 2024-2027.

Increasing the special fund allocation for affordable housing: Significant increases in the creation of public affordable housing are planned. This will support access to affordable housing and boost construction activity. According to the 2024 budget, the special fund for affordable housing will invest 1.45 billion euros (1,447,654,152 euros) over 2024-2027, averaging over 360 million euros annually, doubling the 2023 expenditure of 184 million euros.

"The state is massively investing in public housing! This can only be achieved through good collaboration between the public and private sectors. From my discussions with all housing stakeholders in recent months, I can see that we are all moving in the same direction," noted Claude Meisch, Minister of Housing and Spatial Planning.

The Ministry of Housing and Spatial Planning is planning several targeted campaigns to promote various assistance options to private market tenants and homebuyers.

For information on the tax measures implemented by the stimulus package, the public can contact the Ministry of Finance.

Public information

To learn more about various housing assistance options, potential applicants can visit for information on eligibility conditions. The Housing Assistance Service staff is available to provide information at the following location:

11, rue de Hollerich L-1741 Luxembourg

Monday to Friday from 8:00 to 12:00 and 13:30 to 16:00, Thursday from 8:00 to 17:30 by appointment only

You can also contact them by email at or by phone at (+352) 8002 10 10, Monday to Friday from 8:00 to 16:00.