Government extends housing tax measures until 2025

The government is extending tax benefits for housing construction until July 2025, Prime Minister Luc Frieden announced on Friday afternoon.

This mainly concerns the “Bëllegen Act” tax credit for first-time buyers of owner-occupied flats and purchases of yet-to-be-built rental flats (VEFA). Tax credit for the purchase of a home in which the owner undertakes to live for at least two years will be increased from €30,000 to €40,000.

It also allows for a tax credit of €20,000 per person for investments in rented accommodation. That applies exclusively to new builds where the buyer undertakes to rent out the property for at least two years.

“We have decided to extend the tax measures that were to be valid only for the year 2024. We do not want to interrupt the momentum that is currently observed in the housing market,” said Frieden.

The favourable taxation of the added value arising from the sale of flats will also not expire. The rate for accelerated depreciation of flats built and approved for rental purposes, which has been increased to 6% for six years, will not end either.

All extensions are to apply until July 2025. The subsidies were due to expire at the end of 2024.

Frieden added that this will be the last extension to the benefits.

(This article was originally published by the Luxemburger Wort. Translation and editing by Kabir Agarwal.)