New arrangements for temporary tax benefits for housing: 'Greater flexibility for buyers and support for housing supply and development'

On 2 June 2025, the Minister of Finance, Gilles Roth, presented the updated terms and conditions for eligibility under the temporary tax benefits introduced by the Act of 22 May 2024. This legislation forms part of a broader package aimed at stimulating the housing market. A related bill was recently approved by the government.

Under the current legal framework, these tax measures are set to expire for property purchases not notarised by 30 June 2025. However, due to the high volume of applications, banks and notaries may struggle to process all transactions within this timeframe.

Increased flexibility for buyers

To address this issue, the new bill introduces greater flexibility for prospective buyers.

While the 30 June 2025 deadline remains in place, buyers will now only be required to register—by that date—with the Registration Duties, Estates and VAT Authority (AED) either a signed preliminary sales agreement or a signed reservation contract for a property under future completion. The purchase must then be finalised through a notarial deed between 1 July and 30 September 2025.

Key tax measures under the bill include:

• A rental tax credit of €20,000 per individual
• A 50% reduction in the tax base for registration and transcription duties
• Accelerated depreciation at a rate of 6%
• Taxation of transfer profits at a quarter of the standard rate
• Exemption from capital gains tax for transfers to social rental housing or residential buildings achieving an A+ energy rating

The 'Bëllegen Akt' tax credit – available for the purchase of a primary residence – is not affected by this bill. It will continue to be available at €40,000 beyond the 30 June 2025 deadline.

Guidance for homebuyers

A dedicated guide has been published to help homebuyers make full use of the AED's services. It provides details of relevant offices and other practical information.

The guide is available on the 'News' page of the AED's Indirect Taxation Portal (in french): Portail de la fiscalité indirecte - Luxembourg

Minister of Finance Gilles Roth commented: "The government clearly indicated that the tax package would not be extended beyond 30 June 2025, and we have upheld that commitment. At the same time, it is important to remain adaptable. Through this new bill, we are giving buyers greater flexibility while also supporting the supply and development of housing."

Press release by the Ministry of Finance