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Housing assistance and the State Guarantee

Existing assistance and how you can benefit from it

The good news: The State offers a wide range of housing assistance

The Luxembourg State and some local authorities offer financial assistance to those buying, building or renovating real estate properties. Information about the amount and terms of such assistance is an integral part of the personalised advice that we offer you.

What State housing assistance is available?
Under what terms are these aids offered?
Tax credit on notarised deeds
Super-reduced VAT rate
The State Guarantee

What housing assistance is available?

You can receive two types of aids, depending on your family and financial circumstances:

Capital assistance

One-off support paid at the start of the loan

Interest assistance

Monthly aids that reduce the monthly cost of your housing loan

Full information about government-backed housing assistance is an integral part of the personalised advice that we offer you in our branches.

Charles Pletsch - Housing loan expert

Capital assistance

Home ownership grants:

  • Home ownership incentive
  • Interest subsidy
  • Savings subsidy
  • Subsidy for the creation of an integrated home
  • Renovation subsidy
  • Topup Klimabonus subsidy
  • Subsidy for special home adaptations
  • State home loan guarantee for building, purchasing or improving the property
  • State home loan guarantee for climate loans
  • Interest subsidy for climate loans

Rental subsidies:

  • Rental deposit
  • Rent subsidy

Interest assistance

  • Interest subsidy between 0,25% and 3,5% on a maximum amount of EUR 200.000 of the interest rate of the housing loan (plus EUR 20.000 for each dependent child up to a maximum of EUR 280.000)

Under what terms is this assistance offered?

The allocation and level of some of these grants depend on the property and financial situation of the domestic community purchasing the property.

Individual housing assistance

Tax credit on notarised deeds for your main and personal home "Bëllegen Akt"

Transfer and registration fees total 7%, calculated on the sales price of an existing property or land (with the part already built) for a new construction.

As a natural person, you can benefit from a tax credit against these fees totalling EUR 30.000 per acquirer.

Temporary measures applied to the purchase of housing in 2024, with retroactive effect to 1 January 2024: Increase of the tax credit for residential purpose from EUR 30.000 to EUR 40.000 per person and introduction of a tax credit "Bëllegen Akt Investors" for rental investment purposes, applied to sales in a future state of completion (fr. VEFA) rented out for at least 2 years, of EUR 20.000 per person.

The good news:

  • If you have a balance left from the loan after your first main home acquisition, you can deduct this balance from your next acquisition of a main home.
  • Buying as a couple? Then you can receive double the amount!
More information and to see the remaining balance on your tax credit on guichet.lu

Super-reduced VAT rate

Do you have plans to build or renovate your main home?

Subject to certain conditions, you could be eligible for the super-reduced 3% VAT rate, up to a total of EUR 50.000 per home.

Tip:

When buying a new home or a home not yet inhabited, you can even request a partial refund of the VAT.

More info on guichet.lu

The State Guarantee

To obtain a home loan, you need to have principal capital. However, if you do not have this, the government can be the guarantor of your loan. 

You need to meet certain conditions to receive the state guarantee, such as:
 

  • Not be the owner of another property
  • Have held a savings account with the same bank for at least 3 years
  • Prove an increase of at least EUR 1.000 per year in the balance of this savings account for at least 3 years prior to the application
Étudiante souscrit une épargne logement pour son futur bien immobilier
The State Guarantee: a helping hand for young people

Would you like to save and receive a tax break? Find out about our housing savings scheme with BHW!

BHW Bausparen

Build your future with a BHW housing savings scheme contract.

Key-takeaways!

The State offers a wide range of housing assistance, in terms of both the principal and the interest on loans.

Remember you can benefit from tax credits on notarised deeds ("Bëllegen Akt") and the super-reduced VAT rate.

If you cannot provide sufficient own guarantees, remember the State Guarantee.

For your energy efficiency plans, we help you to benefit from all the state and private aids available.

Our Housing Advisers will help you with your application for housing assistance.

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