On 16 July 2026, the Luxembourg Government announced a package of measures to support the real estate market. Three draft laws have been submitted to the Luxembourg Parliament (Chambre des Députés): they aim to increase the registration and transcription duties tax credit (Bëllegen Akt), introduce a temporary exemption from registration and transcription duties on purchases in the future state of completion (vente en l’état futur d’achèvement, “VEFA”) and raise the interest subsidy ceilings. Additionally, Draft Law No. 8775 removes the age condition for the higher housing savings (épargne-logement) deduction ceiling and the 2027 State budget, presented on 7 October 2026, amends the accelerated depreciation rules for rental housing. Other measures have been announced but are not yet presented in draft law.
Bëllegen Akt permanent increase
Draft Law No. 8806 provides for an increase of the Bëllegen Akt tax credit on registration and transcription duties from EUR 40,000 to EUR 45,000 per purchaser, on a permanent basis. The credit had already been raised to EUR 40,000, initially on a temporary basis, before being made permanent by the Luxembourg law of 3 July 2025.
The date of application would be 16 July 2026: the increase would apply to acquisitions of property intended for use as a dwelling documented by a notarial deed executed on or after that date.
Registration duty relief on VEFA acquisitions (2026–2029)
Draft Law No. 8807 provides that, for acquisitions of VEFA by individuals documented by a notarial deed executed between 16 July 2026 and 16 July 2029, registration and transcription duties would no longer be levied on the construction part where the works are no more than 80% complete at the time of acquisition. Duties would solely be maintained on the land part. The draft law covers dwellings, whereas the press release referred to the main residence; such that the exact scope will need to be monitored. For deeds executed before the law enters into force, the notary may request a recalculation and refund from the Luxembourg Registration Duties, Estates and VAT Authority (Administration de l’enregistrement, des domaines et de la TVA, “AED”).
Higher interest subsidy ceilings, with a boost for young buyers
Draft Law No. 8836, which amends the Luxembourg law of 7 August 2023 on individual housing aid (loi du 7 août 2023 relative aux aides individuelles au logement), raises the loan ceiling used to calculate the interest subsidy (subvention d’intérêt) from EUR 200,000 to EUR 250,000, and the increase per dependent child from EUR 20,000 to EUR 30,000, up to EUR 370,000 with four children or more. For a young buyer (jeune acquéreur), the ceiling would be EUR 300,000, up to EUR 420,000 with four children or more.
The Draft Law defines the young buyer as a person aged 35 or under at the date of the notarial deed documenting the acquisition or the VEFA or, where the applicant organises the construction of the dwelling, at the date of the declaration of the start of works. The general ceilings would apply from the first payment following the entry into force of the law. The young buyer ceilings would apply only if the deed, or the declaration of the start of works, is dated after the entry into force of the law, which is set at the first day of the month following publication in the Journal officiel.
A young buyer of housing intended for affordable sale (vente abordable) or cost-moderated sale (vente à coût modéré) within the meaning of the Luxembourg law of 7 August 2023 on affordable housing (loi du 7 août 2023 relative au logement abordable) would also become eligible for the home ownership grant (prime d’accession à la propriété).
Housing savings: age condition removed as from tax year 2027
Draft Law No. 8775, filed earlier, on 22 June 2026, and implementing the tripartite agreement of 8 June 2026, amends the ceiling for tax deductible contributions paid under housing savings contracts (contrats d’épargne-logement) taken out to finance the taxpayer’s own home. The annual ceiling is currently EUR 1,344 for subscribers aged 18 to 40 at the beginning of the tax year, and EUR 672 for the others. The draft law removes the age condition and sets a uniform ceiling of EUR 1,344. The ceiling is still increased by its own amount for the spouse (where taxed jointly) and for each child giving right to a child tax allowance (modération d’impôt pour enfant).
Accelerated depreciation for rental housing
The accelerated depreciation of rental housing under Article 32ter of the Luxembourg Income Tax Law would be increased from 4% to 6%, where the depreciable base of the whole building at completion does not exceed EUR 600,000 and completion dates back less than six years. The same would apply to renovation expenses exceeding 20% of the price, where the price of the whole building does not exceed EUR 600,000 and the renovation was completed after 31 December 2025 and less than six years ago. The 4% rate would be maintained, subject to a five-year (rather than six-year) completion test, for buildings acquired or constituted between 2021 and 2025 and, in 2026, for buildings whose depreciable base at completion exceeds EUR 600,000. Draft Law No. 8800 provides that the measure would apply from tax year 2026.
Three other announced measures not yet published
- Reduced 8% VAT rate for social rental housing: dwellings of 120 m² or less, capped price, rental yield of 4% or less, rental for at least ten years and an eligible tenant.
- Housing Bond: EUR 250 million bond in 2027 to finance affordable housing, with interest exempt from withholding tax.
- Withholding tax on real estate capital gains: from tax year 2028, a withholding tax mechanism is planned, and the tax would be withheld when the transaction is carried out, instead of when the taxpayer declares his/her income.
Takeaways
The accelerated depreciation rules should apply as from tax year 2026. The updated housing savings ceiling would apply from tax year 2027. The Bëllegen Akt increase and the VEFA exemption apply to deeds executed from 16 July 2026. For the interest subsidy, the date of the deed relative to the entry into force of Draft Law No. 8836 will determine access to the young buyer ceilings. The three other measures should be monitored until a draft law is submitted.
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