RTL Today - Act now or never: No extension for 2024 housing tax breaks, says Minister Claude Meisch

A range of tax measures introduced this year to support Luxembourg's housing market will not continue in 2025, Minister of Housing Claude Meisch stated, encouraging potential buyers and investors to act before year-end.

A whole series of measures put in place to boost the housing market in 2024 will not be renewed next year.

The tax measures introduced in 2024 to stimulate the Luxembourg property market will not be extended, Minister of Housing Claude Meisch confirmed in an interview with our colleagues from RTL Infos.

To take advantage of benefits such as the increased tax credit on notarial acts ("Bëllegen Akt") for private individuals (worth €40,000), the reduction in capital gains tax (from 20% to 10%), the tax credit on notarial acts for rental investment, or the accelerated depreciation rate of 6%, transactions must be completed before 31 December 2024.

"It's obvious that we can't extend them. If you want to make the most of them, you have to do it now," Meisch insisted. He believes that the state has "assumed its responsibilities" by offering a wide range of assistance and purchasing several stalled property projects.

Meisch stressed that it is not the state's role to bail out those who invested at too high a price. As Luxembourg moves into 2025, the market will need to find "a new equilibrium" without relying on public funds. Despite this, the Minister reassures that the government's commitment remains to "build more and build faster," pulling out all the stops to support future development.

Expanding the public housing stock

"We still have the ambition to buy projects on the private market," Meisch assured, while also emphasising other key priorities, such as the acquisition of building land. "We want to acquire land and housing," he said, with the goal of expanding the public housing stock as quickly as possible.

To achieve this, he explained, the government is exploring all avenues, including reaching out to landowners and encouraging them to build, sell, or even rent their properties. These steps have already been taken, and discussions are actively underway with the aim of concluding transactions. This is all happening alongside ongoing efforts to simplify administrative processes.

The government plans to present the first draft bills to the Chamber of Deputies in the coming weeks, Meisch stated. In this context, he pointed out that the impact of certain measures will not be felt for some time. "It could take years for the impact to be felt after this legislature," he noted.

"The ball is in the developers' court"

In the meantime, the minister is pleased to see that activity has returned to the existing housing market. Minister Meisch believes that the measures put in place by the government have something to do with this. "Confidence is about to return," he said, as interest rates are finally come down.

In his view, developers also bear responsibility for the continuing stagnation in the new-build market. He believes that a balance needs to be struck between financing levels, household purchasing power, and the price of off-plan properties (VEFA).

He explained that the reason for introducing financial aid in 2024 was partly to "avoid a disaster in the development and construction sectors." But come the new year, other solutions will have to be found. In fact, Claude Meisch believes that the government has done enough.

"There is no political will to announce new measures for the year 2025," he conceded during the interview. He also added that "it's not up to the State to come to the aid of those who invested at excessively high prices."