Interview with Claude Meisch: housing challenges in Luxembourg

To mark the launch of its new magazine – the Autumn 2026 issue – atHome had the opportunity to speak with Claude Meisch, Minister for Housing and Spatial Planning, about the current state of the property market and the key housing challenges facing Luxembourg.

Whether it be the market recovery, new-build housing, home ownership, affordable housing or the rental market: the Minister reviews the developments observed in recent months and sets out the main policies and measures designed to support the sector.

This interview can be found in the new atHomeMagazine – Autumn 2026 issue, available for a sneak preview at our stand at Home Expo, taking place from 8 to 11 October 2026 at Luxexpo The Box during National Housing Week.

The magazine will then be available at newsagents across Luxembourg, at our partner estate agents, via the Lesezirkel network, and online.

A year ago, you mentioned the first signs of a recovery in the property market. Twelve months on, how do you assess how the market has developed, particularly in terms of the difference between the existing-home and new-build markets? Which indicators do you find most encouraging at present?

Let’s start with the facts. After three very difficult years, the market has stopped declining. Sales have picked up again and prices are no longer falling. This does not mean that housing has become affordable again, because it has not, and it would be wrong to claim otherwise. But a collapsing market does not produce cheaper housing; it produces fewer homes, and therefore higher prices in a few years’ time. Stabilisation is not an end in itself; it is the prerequisite for rebuilding.

What has changed – and this is undoubtedly the most notable sign – is that people are starting to consider buying again. It was this confidence that was missing the most.

However, the recovery is not the same everywhere. In the second-hand market, both houses and flats are selling significantly better than a year ago. The new-build market, on the other hand, is lagging behind. Sales of off-plan properties remain well below their pre-crisis levels, even though the low point reached in 2023 has been surpassed. It is this discrepancy that we must focus on, because it is here that tomorrow’s supply is determined – and therefore the price that those looking for a home in a few years’ time will pay.

Because when it comes to housing, everything takes time. A home that isn’t built today will be missing in three or four years« time. That is precisely why we didn’t wait. With the »Booster for Housing Construction’, presented in July alongside my colleague from the Department of Finance, we have taken action where the bottleneck was most acute, namely in off-plan sales.

The government recently announced new measures to support housing construction. Which of these do you think are likely to have the most immediate impact on the market? Are any further support measures planned to bolster the market?

The «Booster fir de Wunnengsbau» package, unveiled in July 2026, works on three fronts simultaneously. It helps households finance their purchases, encourages investors and revives construction projects. The aim is simple. We need to build more so that housing becomes affordable again.

What households will notice most immediately are the fees payable when signing the contract at the notary’s office. When you buy a property that is yet to be built, you no longer pay registration duties on the construction portion. And the Bëllegen Akt – the tax credit that reduces your legal fees – is being increased to €45,000 per person, so

€90,000 for a couple. In practical terms, you need significantly fewer initial savings to be able to sign the contract.

The most important measure for reviving the construction sector is less obvious, but highly effective. Before financing a project, a bank requires that a proportion of the homes have already been sold, and until this threshold is reached, nothing gets off the ground. From now on, the Government will step in as soon as sales open and may purchase only a portion of the homes in an off-plan (VEFA) project. This initial boost makes it possible to reach the required number of sales more quickly, release the bank loan and actually get the building work underway. To ensure this scheme can operate on a large scale, we are allocating an additional 300 million euros, on top of the initial budget of 480 million. These homes will then go on to expand the stock of affordable housing.

Further measures will follow. A reduced VAT rate of 8 % will apply to properties let at a moderate rent, subject to strict rules on floor area, rent and tenancy duration. A tax incentive will support those who invest in property intended for letting. And a government bond available to the public, the «Housing Bond», will enable everyone to put their savings towards affordable housing.

Project funding and price levels remain key challenges for new-build housing. What measures can be taken today to make new homes more affordable, whilst maintaining standards of quality and sustainability?

It is not a question of choosing between price and quality. A poorly insulated home may cost less to buy, but it costs more each month to heat and loses value over time. The cost isn’t avoided; it’s simply passed on to the household. The real scope for savings lies elsewhere.

First of all, land, which accounts for the largest share of the final price. We have adjusted the maximum prices the State is willing to pay on a region-by-region basis, because land does not cost the same in the south as it does in the north of the country. This makes it possible to build affordable housing everywhere, not just where land is cheap.

Next, there is the issue of delays. A project that has to wait twelve months for authorisation costs more than a technically complex project, as every month of waiting incurs interest costs which are passed on in the sale price. The administrative simplifications introduced by the government are specifically designed to reduce these delays.

Finally, the construction method. Repeating the same plans, preparing some of the components in the workshop and working in batches remains an effective way of bringing down the price per square metre in the long term.

We also need to restore confidence. When buying off-plan, you are paying for a property you cannot yet see, and buyers are quite rightly asking for additional guarantees regarding the completion of their property. This is the whole point of the ongoing reform, which aims to better protect those who buy a property before it is built.

Despite recent market developments and the various forms of support available, getting on the property ladder remains difficult for many young households. What are the current priorities to make it easier for them to buy their first home?

For a young household, there are two major hurdles to overcome. First, they need to raise the initial deposit, and then they have to keep up with the monthly repayments. We help with both.

When it comes to the initial deposit, the reduction in fees at the time of signing is a real game-changer, as this is precisely when you need to come up with money that no bank will lend. Furthermore, the home-buyer’s grant and the savings grant are now available to young people buying affordable or moderately-priced homes. Until now, these same young people were excluded from these schemes, which was inconsistent and has now been rectified.

The government covers part of the interest on the loan as part of the monthly repayment. We have increased the eligible loan amount to €300,000 for a first-time purchase made before the age of 35, with an additional €30,000 per child. For a young family, this represents a saving of several hundred euros each year.

We must also be realistic. No amount of support will be enough if we do not build enough homes, and helping buyers without increasing the number of homes available would simply drive up prices. That is why we are doing both at the same time, in particular by purchasing off-plan homes that will quickly boost the stock of affordable housing.

The rental market also remains a major challenge for many households. How can we further expand the supply of affordable rental accommodation, and how do you see the government, local authorities and private sector working together?

It is indeed there that the situation is most strained, and it is young people, new arrivals and low-income households who are hardest hit by high rents.

We have introduced a new measure. For the first time, a tax relief on housing is linked to social commitments. The reduced VAT rate of 8 % for affordable rental accommodation will only be granted if the landlord meets specific conditions regarding the size of the property, the rent cap, the limited return on investment and the minimum tenancy period. In other words, the Government is offering a helping hand, but in return the housing must remain genuinely affordable.

No one can solve this problem on their own. The State sets the framework, provides long-term funding and carries out construction through its public developers. Local authorities have control over land and local planning. Private sector players, for their part, provide the capacity to build quickly and on a large scale. We need all three.

Several initiatives are being taken forward in parallel. A national conciliation committee will help resolve disputes between tenants and landlords without going to court, where possible. A national rent register will finally give everyone a clear idea of what rents actually are in their local area.

The Government also purchases off-plan housing, which it then entrusts to public housing developers to let at affordable rents. To date, nearly 860 homes have been acquired or reserved in this way. This measure alone will provide housing for some 2,600 people, whilst directly supporting the construction sector. And we are building on this momentum, as the «Booster fir de Wunnengsbau» is providing a further 300 million euros for this acquisition programme, which will enable new homes to be built. Major projects such as «Neischmelz» and «Wunnen mat der Woltz» will further significantly expand the rental housing stock.

The financial commitment, meanwhile, has reached an unprecedented level. Funding for affordable housing has more than doubled in a single year, approaching half a billion euros. The subsidised housing stock now comprises more than 5,000 homes, spread across some 350 projects, with over a thousand additional homes having been brought under the scheme over the past year. These figures demonstrate the scale of the Government’s investment in housing provision.

You can read the full interview in our new atHomeMagazine – Autumn 2026 issue.