Booster fir de Wunnengsbau: Three Key Measures from the Government’s New Housing Plan

On 16 July 2026, the Luxembourg government presented a new package of measures aimed at stimulating residential construction, facilitating access to home ownership and supporting real estate investment. Named “Booster fir de Wunnengsbau”, the programme combines tax incentives, financing support and new measures designed to encourage the creation of housing.

Among the seven measures announced, three are particularly relevant to those looking to purchase their primary residence and to investors considering a buy-to-let acquisition in Luxembourg: an increase in the “Bëllegen Akt” tax credit, a partial exemption from registration duties for certain new-build properties and the introduction of a new accelerated depreciation scheme.

The “Bëllegen Akt” Tax Credit Increased to €45,000

The first significant change for future homeowners is the government’s announcement that the “Bëllegen Akt” tax credit will increase from €40,000 to €45,000 per individual for the acquisition of a property intended to serve as their primary residence.

For two buyers who each meet the eligibility requirements and have their full tax credit available, the total benefit could therefore reach €90,000.

Registration and transcription duties normally amount to 7% of the purchase price. Under the new ceiling, an individual could theoretically acquire a property worth approximately €640,000 while paying only the minimum duty of €100. For two buyers each benefiting from the full tax credit, this amount could rise to nearly €1.28 million. These estimates do not include other costs associated with the acquisition, including notarial fees and related expenses.

The increase is intended to reduce the direct costs associated with purchasing a primary residence and to support households at a time when building sufficient personal equity often remains a decisive factor.

Subject to the adoption and entry into force of the relevant legislation, the increase is expected to apply retroactively to notarial deeds signed from 16 July 2026 onwards. Buyers who signed their deed between that date and the entry into force of the law should be able to claim the additional amount by submitting a request to the Registration Duties, Estates and VAT Authority.

An Exemption on the Construction Component of Certain New-Build Properties

At the same time, the government plans to introduce a temporary exemption from registration and transcription duties on the portion of the purchase price corresponding to the construction of a new-build property intended to become the buyer’s primary residence.

The measure is expected to apply to off-plan purchases under a VEFA agreement, where the level of construction completion does not exceed 80% at the time of acquisition. In such cases, the duties would be calculated solely on the value of the land, excluding the value of the construction.

This distinction could represent a significant saving for buyers and increase the financial appeal of purchasing off-plan. It may also support the marketing of new residential developments by encouraging private buyers to commit at an earlier stage of the project.

The exemption is expected to apply to acquisitions concluded from 16 July 2026 for a limited period of three years. Buyers who signed their deed after the announcement but before the legislation enters into force should also be able to benefit from the measure by submitting a request to the competent authority.

An Exemption on the Construction Component of Certain New-Build Properties

Investors are also affected by the new package. The government plans to introduce an accelerated depreciation scheme based on the so-called “three times six” formula: a rate of 6% per year for six years, on a depreciable basis not exceeding €600,000 per property.

Where the depreciable basis exceeds the €600,000 threshold, a rate of 2% is expected to apply to the entire amount, with no announced time limitation. The choice of property, its value, rental potential and the financial structure of the investment will therefore need to be assessed carefully in order to determine the actual relevance of the scheme for each investor.

A transitional period is planned for acquisitions completed in 2026. Taxpayers should then be able to choose between the scheme currently in force and the new model. From 1 January 2027, the new regime is expected to become the standard for new acquisitions, while previous schemes would continue to apply until their respective end dates to investments already benefiting from them.

Beyond the potential tax advantage, the measure is intended to improve the attractiveness of rental investment and encourage the creation of new housing. Its actual impact should nevertheless be assessed in light of the investor’s tax situation, chosen financing structure and the specific characteristics of the property.

New Perspectives for the Luxembourg Real Estate Market

By acting simultaneously on acquisition costs, purchases of new-build homes and the taxation of rental investment, the government aims to bring renewed momentum to Luxembourg’s residential market. These measures may open up new opportunities both for households seeking a primary residence and for investors looking to grow their property portfolio.

Every real estate project, however, remains unique. Location, property quality, energy performance, financing conditions and the buyer’s long-term objectives remain essential considerations. A personalised analysis makes it possible to assess the precise impact of these new measures and make a decision suited to each individual situation.

The experts at Engel & Völkers Luxembourg are at your disposal to support you in analysing the market and bringing your purchase, sale or real estate investment project in Luxembourg to life.

This article is based on measures announced by the Luxembourg government in July 2026. Certain details remain subject to the adoption and entry into force of the corresponding legislation. The information provided does not constitute tax or legal advice.

Source: Luxembourg Government – “Booster fir de Wunnengsbau”