New Announcements for the Luxembourg Real Estate Market

New Announcements for the Luxembourg Real Estate Market

On Tuesday, May 13, 2025, Luxembourg Prime Minister Luc Frieden delivered his annual State of the Nation address before the Chamber of Deputies. During his speech, he outlined the government’s strategic priorities to strengthen social cohesion and support the housing sector and the Luxembourg real estate market.

Housing: Measures Maintained and a Planned Transition

To encourage homeownership, the Prime Minister confirmed the extension of several key measures until June 30, 2025:

  • Accelerated depreciation will remain in place to stimulate investment in rental properties.
  • The Bëllegen Akt tax credit will continue to provide €40,000 per person when acquiring a primary residence.

However, the registration duty, which has so far been reduced to 3.5%, will increase to 7% starting in July. This means only a few weeks remain to take advantage of the current reduced rate. These adjustments aim to create a better balance in the Luxembourg property market, in response to the growing gap between supply and demand.

Urban Planning: Simplified PAG & PAP Procedures

The government intends to accelerate housing development through the reform of building regulations and the simplification of procedures for adopting local urban plans (PAG and PAP). These reforms will allow for:

  • Faster densification of buildable areas,
  • Less administrative burden on municipalities,
  • Greater public participation in planning processes.

The objective is to speed up the release of buildable land and boost municipal development. This momentum is essential to ease the Luxembourg real estate market and enhance the country’s territorial appeal.

Public Investment: Strategic Infrastructure and Mobility

Luc Frieden also highlighted infrastructure as a key driver of urban development, stressing:

  • The importance of investing in transport networks, especially the expansion of the tram system, as a catalyst for real estate value enhancement.
  • The State’s commitment to major infrastructure projects to improve accessibility and attract new residents to well-connected areas.

Rental Subsidies: Easier Access

The Prime Minister also announced a simplification of rental subsidy procedures. The goal is to ensure quick and fair access to this aid for eligible households, by improving transparency and reducing processing times.

For more information on these measures and how to benefit from them, contact us!

Image source: https://www.chd.lu/fr/seance-publique-13-mai-2025-declaration-etat-nation

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