What Financial Support Is Available to Buy, Build or Renovate a Property?

Applying for a State home loan guarantee

In most cases, to build, renovate or buy a house, you will need to apply for a bank loan. And to be granted this loan, you will need to be able to present a number of guarantees to the bank.

In order for the State to help you get your loan, you must hold a savings account in the same banking establishment for at least 3 years and you must have deposited a minimum amount of €100 when you opened the account, and then at least €290 per year for 3 years or more. In addition, you must have secured a loan for the purchase of the land or property and, possibly, for its construction, that covers at least 60% of your investment. Note also that your monthly loan repayment must not exceed 40% of your available income, and that the interest rate should not exceed the ceiling previously set by the Grand-Ducal regulation by more than 3%.

Construction, improvement or purchase subsidy

For building a house, but also for buying one or for renovation works, a lump-sum capital payment can be obtained in Luxembourg. In order to qualify for this subsidy, you must have taken out a mortgage loan in Luxembourg for your project, and be using the property as your primary and permanent residence. You cannot already be the owner, co-owner or usufructuary of another property, either here or in another country. Moreover, the aid is only available for housing with a limited surface area, i.e. between 65 and 140 square metres for a house and between 45 and 120 square metres for a flat.

The subsidy ranges from €250 to €9,700, depending on the family's income and status. This amount might be increased in certain specific cases (construction of a semi-detached house, for example).

Savings subsidy for building or buying

The savings subsidy is not accessible for renovation, but can be applied for when buying or building a main residence. This aid is paid in the form of a lump-sum capital payment and corresponds to the subsidised interest and premiums on your savings account.

In order to benefit from it, at least 90 % of the holdings in this account should be used to finance your home and you must already be receiving a construction or purchase subsidy. You must also have saved for at least 3 years in a savings account, with a minimum starting capital of €100. For one beneficiary, this grant cannot exceed €5,000.

Interest subsidies

The aim of an interest subsidy is to reduce monthly costs for repaying a mortgage loan contracted for the construction, purchase or even improvement of a dwelling. As with the other aids mentioned above, to benefit from it you must not be the owner, co-owner or usufructuary of another dwelling and the property (for which the surface area is restricted) must be your primary residence.

For loans up to €175,000, the interest subsidy is estimated on the basis of the interests due, according to the amortization plan provided by the bank.

An interest relief scheme, which reduces the monthly loan repayment costs by about 0.50% per dependent child, is also available. The conditions for obtaining it are similar to those for the interest subsidy.

LENOZ certificate subsidy

The LENOZ certificate has been introduced to assess the sustainability of a dwelling on the basis of 143 criteria, including location, functionality, technical facilities, ecology, economy and society. Although it is voluntary, you might be eligible for a bonus if you complete it – up to €1,500 for a house and €750 for a flat.