New government measures in Luxembourg: what impact will they have on buying a new-build apartment?
Buying a New-Build Apartment in Luxembourg: How Much Could You Save Thanks to the New Government Measures?
Buying a new-build apartment is a significant investment. Beyond the purchase price, you also need to take into account VAT, registration duties, notarial deed costs and the various government incentives that can affect the actual cost of your property purchase.
To support access to home ownership and stimulate housing construction, the Luxembourg Government announced several new tax measures for owner-occupiers in July 2026.
Some were already in place, such as the 3% VAT rate, subject to certain conditions for a main residence, and the Bëllegen Akt tax credit. Others are entirely new, in particular the partial exemption from registration duties on the construction component of properties purchased off-plan (VEFA – Vente en l’État Futur d’Achèvement).
All these measures share a common objective: to reduce the overall cost of buying a new-build home.
But what could they actually mean for your budget?
In this article, we explain in simple terms:
- the measures announced by the Luxembourg Government;
- how they work;
- their potential impact on the cost of a new-build apartment;
- and how they may apply to an IKO Real Estate property.
Three measures that could reduce the cost of your purchase
The new measures do not consist of a single financial incentive. Instead, they combine several mechanisms that apply at different stages of your property purchase.
| Measures | What they change |
| 3% VAT | Reduces the construction cost of your main residence, subject to the applicable legal conditions. |
| Bëllegen Akt | Reduces the registration and transcription duties payable when purchasing a property. |
| New VEFA exemption | Exempts, subject to certain conditions, the registration fees on the part of the building that has not yet been completed. |
These three measures are complementary, but they do not apply to the same types of costs.
Understanding this distinction is essential to accurately estimate the actual cost of your property purchase.
3% VAT: A Tax Benefit for Your Main Residence
When purchasing a new-build apartment intended to become your main residence, you may be eligible for the super-reduced VAT rate of 3%, provided you meet the conditions set by Luxembourg’s Registration Duties, Estates and VAT Authority (Administration de l’enregistrement, des domaines et de la TVA).
This tax benefit reduces the cost of the construction component of the property compared with the standard VAT rate.
For most new-build developments marketed by IKO, the prices displayed for owner-occupiers already take this reduced rate into account where applicable.
However, the 3% VAT rate remains subject to a statutory cap and several eligibility criteria. Your IKO advisor can guide you through the necessary steps.
Bëllegen Akt: A Tax Credit to Reduce Your Purchase Costs
The Bëllegen Akt is often described as financial assistance, but it actually operates as a tax credit.
It is not a payment made directly into your bank account. Instead, it reduces the registration and transcription duties payable when the notarial deed is signed.
The Government has announced an increase in the maximum allowance to €45,000 per person, representing a significant benefit for many households.
Whether you are buying alone or as a couple, this measure can significantly reduce the costs associated with your property purchase.
The Major New Measure for 2026: Partial Exemption from Registration Duties for VEFA Purchases
This is the measure currently attracting the most attention.
For apartments purchased off-plan (VEFA), the Government has announced a partial exemption from registration duties on the construction component of the property.
In practical terms, where certain conditions are met, registration duties would only be calculated on the value of the land, while the portion of the construction work yet to be completed could be exempt.
The measure has two main objectives:
- to encourage the purchase of new-build homes;
- to support residential developments that are still under construction.
This measure primarily applies to properties where construction is still underway when the notarial deed is signed.
The less advanced the construction work is, the greater the proportion of construction still to be completed — and therefore the greater the potential saving may be.
How Much Could You Save with This New Measure?
Tax measures can often seem abstract until they are illustrated with a concrete example.
To better understand the potential impact of this new exemption, we have carried out a simulation based on the average price of one-bedroom apartments marketed by IKO Real Estate.
IKO Simulation
| Assumption | Valeur |
| Average price of a one-bedroom apartment | €532,864 |
| Average land share | 41.56% |
| Average construction share | 58.44% |
| Construction progress | 50% |
| Registration and transcription duty rate | 7% |
Estimated Savings
In this scenario, the partial exemption from registration duties on the construction component represents an estimated saving of approximately €10,900.
Key Takeaway
For a one-bedroom apartment priced at approximately €533,000, with construction 50% complete and an average land share of 41.56%, the newly announced exemption could represent savings of nearly €10,900.
Why Is This Only an Estimate?
This simulation is based on the average characteristics of one-bedroom apartments marketed by IKO.
It combines data from several residences with:
- different price levels;
- different stages of construction;
- varying land shares depending on the individual property.
The actual amount saved will depend on several factors, including:
- the property development you choose;
- the specific apartment selected;
- the land share stated in the notarial deed;
- the stage of construction at the time the deed is signed;
- the legal conditions ultimately applicable.
A personalised simulation is therefore essential to determine the potential savings applicable to your specific property purchase.
These Measures Are Not Limited to First-Time Buyers
Contrary to a common misconception, these measures are not exclusively aimed at first-time buyers.
They may also benefit existing homeowners looking for a property that better suits their changing personal circumstances.
This may be the case, for example, when:
- a couple wants to move from a one-bedroom apartment to a larger home;
- a family needs an additional bedroom or a dedicated home office;
- a homeowner sells their first apartment to purchase a new-build property that better meets their needs.
In all these situations, the new measures could help reduce the overall cost of the purchase, provided their applicability is assessed based on your personal circumstances and the property concerned.
Two IKO Developments to Bring Your Plans to Life
The new measures become particularly relevant when applied to homes that meet your lifestyle and long-term needs.
At IKO Real Estate, two developments may be particularly suitable for owner-occupiers.
| Project | Location | Estimated delivery |
| D’Haus | Rout Lëns – Esch-sur-Alzette | 1st quarter of 2027 |
| Livvy | Howald | 4th quarter of 2027 |
| Résidence | Location | Ideal for | Delivery |
| D’Haus | Rout Lëns – Esch-sur-Alzette | Primary residence | Q1 2027 |
| Livvy | Howald | Primary residence | Q4 2027 |
| Häerz | Rout Lëns – Esch-sur-Alzette | Rental investment | Q3 2029 |
| Calluna | Howald | Wealth investment | Q3 2029 |
Looking for Your Future Main Residence?
The D’Haus and Livvy residences offer apartments designed for buyers looking to settle long term in a new-build, energy-efficient home located in a growing neighbourhood.
Depending on the stage of construction and the conditions set out in the legislation, these developments may allow owner-occupiers to benefit from the new government measures.
Also Considering a Property Investment?
Some buyers use the purchase of their main residence as an opportunity to start planning a future rental property investment.
In this case, IKO also offers two complementary developments:
- Häerz, at the heart of the Rout Lëns neighbourhood in Esch-sur-Alzette, is aimed at investors looking for a competitive entry price and strong potential for capital appreciation in a rapidly transforming neighbourhood.
- Calluna, in Howald, is particularly suited to investors looking to build a property portfolio in a highly sought-after area close to Luxembourg City.
👉 Read our guide to the new measures for property investors in Luxembourg.
The Most Common Misconceptions
The new measures are sometimes misunderstood. Here are some of the most common misconceptions we encounter.
Assuming That All Benefits Are Paid Directly to You
The 3% VAT rate, Bëllegen Akt and registration duty exemption are not grants paid directly into your bank account.
They are tax mechanisms designed to reduce the overall cost of your property purchase.
Assuming That the Savings Are the Same for Every Property
The amount you could save depends on several factors, including:
- the price of the property;
- the land share;
- the stage of construction;
- your personal circumstances;
- the applicable legal provisions.
Every property purchase is therefore different.
Focusing Solely on the Purchase Price
The actual cost of buying a property also includes:
- notarial deed costs;
- bank charges;
- insurance;
- fixtures and fittings not included in the purchase price;
- any additional fit-out or finishing work.
A comprehensive simulation should take all these factors into account.
Why Choose IKO Real Estate to Guide You Through Your Purchase?
The new measures offer significant opportunities, but understanding the applicable rules is essential.
Our teams support you at every stage of your property purchase:
- assessing your budget;
- explaining the available incentives;
- providing a personalised simulation;
- comparing different developments;
- supporting you through to signing.
Our objective is simple: to help you make an informed decision with a clear understanding of the actual cost of your property purchase.
Conclusion
The new government measures announced in 2026 represent an important development for buyers looking to purchase a new-build apartment in Luxembourg.
Between the 3% VAT rate, the enhanced Bëllegen Akt and the new partial exemption from registration duties for VEFA purchases, the potential savings can amount to several thousand euros.
Based on the average price of a one-bedroom apartment marketed by IKO, our simulation shows that savings of approximately €10,900 could be achieved under certain assumptions.
As every property purchase is different, a personalised simulation is essential to accurately assess the potential impact of these measures on your future home.
Calculate Your Potential Savings for Free
Are you considering buying a new-build apartment as your main residence?
Our advisors can help you:
- understand the new government measures;
- estimate the potential savings for your property purchase;
- compare IKO’s different residences;
- identify the home that best suits your needs.
FAQ
Are the New Measures Only for First-Time Buyers?
No. They may also benefit existing homeowners looking to purchase a new property as their main residence, subject to the conditions set out in the legislation.
Am I Eligible for the 3% VAT Rate?
Yes, provided the property is intended to become your main residence and you meet the conditions set by Luxembourg’s Registration Duties, Estates and VAT Authority (Administration de l’enregistrement, des domaines et de la TVA).
What Is the Bëllegen Akt?
It is a tax credit that reduces the registration and transcription duties payable when purchasing a property intended as your main residence.
What Does the New Registration Duty Exemption Change?
Under certain conditions, registration duties may be calculated solely on the value of the land for certain VEFA purchases, thereby reducing the overall cost of the property purchase.
How Can I Find Out How Much I Could Actually Save?
The amount depends on several factors, including the property price, land share, stage of construction, your personal circumstances and the applicable legal conditions. A personalised simulation is the best way to obtain a reliable estimate.