29th April 2024

Real Estate: Why it makes sense to buy in 2024

Have rising interest rates, declining house prices and lower loan applications done the trick for Luxembourg's real estate sector? The answer is no! Although this sector has been affected by the crisis, several measures have been devised to keep property purchases affordable. Read on to find out why you should consider buying a property in 2024.

Falling interest rates

Barring any major unforeseen events, analysts are forecasting several rate cuts, which should take effect in the second half of 2024 and in 2025.

This means that financing conditions are set to improve compared with previous months, making it worth considering taking out a housing loan.

What does the bank look at when granting a housing loan?

Numerous criteria are taken into account, including your repayment capacity, your personal contribution, your real guarantees, etc.

It is in the customer's interest for the bank to analyse applications, considering the customer's situation over the full term of the loan.

Measures announced by the government to boost the housing sector

The new government has announced numerous measures that should be implemented soon.

These measures include:

  • The increase in the “Bëllegen Akt” tax credit to EUR 40.000 per person (currently: EUR 30.000) for all deeds signed in 2024, i.e. a maximum of EUR 80.000 for a couple.

  • Reduction in the capital gains tax rate to 25% of the overall rate for a minimum holding period of two years. From 1 January 2025, capital gains will be taxed at half the overall rate (held for more than 5 years).

  • Increase in the tax deductibility of interest expenses to EUR 4.000* (currently EUR 3.000) for the year of occupancy and the following five years; to EUR 3.000* for subsequent years (6-10 years) and EUR 2.000* thereafter.

From the 2024 tax year and for the next five years, a household of four will be able to claim EUR 16.000 instead of the current EUR 12.000. This measure provides a maximum net tax saving of around EUR 1.830 per year.*
*example taken from gouvernement.lu

How to be informed about government measures to support housing?

The measures will be announced in the national press, but Spuerkeess is also committed to keeping its customers informed. The measures adopted will be presented in a series of articles for customers. Stay tuned 😉.

The correction in property prices

For a long time, this was predicted but never materialised, however over the past year there has been a real fall in property prices. As a result, some property prices have been revised down, and these properties now represent an interesting opportunity. 

The housing sector thus remains favourable to buyers, as has been the case for several months now.

The attention Spuerkeess pays to its customers

Spuerkeess is close to its customers and considers their long-term financial health to be a priority. That's why it will always make sure that a financing application is as sound as possible. And it does so for the benefit of its customers, over the entire term of the loan.

It is important to the bank that its customers can afford to buy the property of their choice and that they are able to repay their loans without difficulty over the entire term.

Spuerkeess is committed to being a reliable partner, and our advisers are on hand to support you in your projects.

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