State home loan guarantee

Last update

Summary:

You can apply for a State home loan guarantee to purchase, build or renovate your home.

To grant a mortgage loan, banking establishments require guarantees (personal contribution, mortgage, etc.).

Subject to certain conditions, the Luxembourg State can help you guarantee the loan you wish to take out in order to purchase, build or renovate your home.

The banking institution where you apply for a loan must have signed an agreement with the State in order for you to benefit from this guarantee.

The maximum amount of the State guarantee may not exceed EUR 294,824.40 (value based on the average annual construction price index of 1133.94 for 2023).

Who is concerned?

If you wish to benefit from the State guarantee, you must:

  • be of legal age on the date the application is submitted;
  • have a right to stay in Luxembourg for more than 3 months and be listed in the National Registry of Natural Persons;
  • be about to purchase or build a dwelling.

Prerequisites

Conditions relating to the home

The mortgage loan must be taken out with a view to acquiring (with improvement works where applicable) or building a home located in Luxembourg.

You must be the exclusive owner of the home thus financed.

Dwelling conditions

The home financed by the loan must be your principal and permanent place of residence.

Conditions relating to savings

You must provide proof:

  • regular savings over a period of at least 3 years with one and the same banking institution; and
  • that the savings balance has increased by a net amount of at least EUR 1,000 per year (EUR 290 per year for savings built up until 31 December 2024).

Conditions relating to the loan

The loan must:

  • be a mortgage loan;
  • be obtained from a contracted financial institution;
  • finance at least 60 % of the cost of the project;
  • have a nominal interest rate that does not exceed the ceiling laid down by law.

Absence of ownership

Neither yourself nor your household can be the owner of another property in Luxembourg or abroad.

Conditions relating to income

Your household's income must not exceed the statutory limit,, namely:

  • single borrower: EUR 97,784.94 (value based on the index 921.63 for the year 2023);
  • several borrowers: EUR 135,387.45 (value based on the index 921.63 for the year 2023).

Determining the household's income

The income taken into account corresponds to the net income of the calendar year preceding the date of the decision to grant the aid.

If the total income to be taken into account includes income originating from remunerated work that was only engaged in for part of the calendar year in question, such income is to be extrapolated over a whole year.

In the event of a change of employer or if the household had no professional income during the year in question, the last known income is taken into account and extrapolated over the year.

The household's monthly net income is calculated by taking into account:

  • net income as stipulated in article 10 of the amended income tax law of 4 December 1967, after deduction of social security contributions and actual taxes withheld (e.g. income from paid employment or old-age pension, unemployment benefits, parental leave allowance, REVIS, RPGH, etc.);
  • the maintenance payments received;
  • net accident annuity amounts;
  • gross earnings paid for overtime hours.

Income from dependent children is not taken into account.

Social benefits are not taken into account to determine your household's net income, such as:

  • family allowance;
  • back-to-school allowance;
  • cost-of-living allowance.

Note: the above list is indicative only. The legal and regulatory provisions prevail.

How to proceed

Submitting the application

The credit institution submits the application for a State guarantee on your behalf, using a specific form. You must sign the application together with the credit institution.

Supporting documents

The application must be accompanied by the following documents:

  • a copy of your identity document;
  • a declaration concerning the composition of your household (see form L/A21 under 'Online services and forms'), duly filled in and signed by you;
  • a declaration of honour (see form L92 under 'Online services and forms') signed by yourself declaring that neither yourself nor any member of your household owns another property in Luxembourg or abroad. If the application is made by multiple applicants, you must add an individually signed declaration of honour for each applicant;
  • the history of the transactions on the savings account over the previous 3 years;
  • a copy of the provisional sale and purchase agreement in the case of purchase of property, or a copy of the preliminary contract (contrat préliminaire) if you are building a new property, or any other document proving that you are the full owner of the property;
  • a copy of the financing plan and the general terms and conditions of the loan to be taken out;
  • documents providing proof of the borrower's income;
  • a certificate of affiliation to the Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS) for each member of your household;
  • for third country nationals (including British nationals): a document proving that the members of our household benefit from a right to stay in Luxembourg for more than 3 months.

The ministry reserves the right to request additional documents or information. In such cases, you must send the documents and/or information to the Single point of contact for housing assistance within 3 months. If you fail to reply to the request or if you reply after the deadline, your file will be closed and your request rejected.

Family status

The household to be taken into account is that existing on the date of the decision to grant the aid.

Assessment and granting of the aid

The amount of the guarantee may not exceed the following thresholds:

  • 40 % of the cost of the project relating to the home;
  • the maximum amount provided for by law of EUR 294,824.40 (value based on the average annual construction price index of 1133.94 for 2023).

The cost of the project relating to the home corresponds to:

  • the cost of the land and construction work in the case of a new construction or a sale of property under construction (vente en état futur d’achèvement);
  • the cost of acquisition and any improvement or transformation works of the home in the case of the purchase of a previously occupied property.

If you are granted the subsidy, you and the credit institution will be informed in writing.

The guarantee is valid for the entire term of the loan and covers repayment of the principal, interest and ancillary costs of the loan.

Reimbursement

If the financial institution calls on the guarantee and the State pays out the guarantee to the financial institution, you will have to reimburse the sum in question in accordance with the procedure for the recovery of registration fees.

The law does not allow you to be exempted from reimbursement.

Refusal of aid

The aid is denied or discontinued if:

  • a member of your household (including ourself) already owns another dwelling than the one for the financing of which the State guarantee is requested;
  • the application contains false or incomplete information;
  • you do not submit all the required documents; or
  • one or more conditions for granting the aid are not met;

Combination with other types of aid

The State guarantee can be combined with other types of aid for the purchase, construction, improvement or energy efficiency enhancement of a home.

Online services and forms

Who to contact

Single point of contact for housing assistance

  • Ministry of Housing and Spatial Planning Single point of contact for housing assistance

    Address:
    11, rue de Hollerich L-1741 Luxembourg Luxembourg
    Phone:
    (+352) 8002 10 10
    Telephone: Monday to Friday from 8.00 to 16.00
    Email address:
    info@ml.etat.lu
    Closed ⋅ Opens at 13.30
    Wednesday:
    8.00 to 12.00, 13.30 to 16.00
    Thursday:
    Closed
    Friday:
    8.00 to 12.00, 13.30 to 16.00
    Saturday:
    Closed
    Sunday:
    Closed
    Monday:
    8.00 to 12.00, 13.30 to 16.00
    Tuesday:
    8.00 to 12.00, 13.30 to 16.00
    Thursdays by appointment only

Single point of contact for housing assistance

  • Ministry of Housing and Spatial Planning Single point of contact for housing assistance

    Address:
    11, rue de Hollerich L-1741 Luxembourg Luxembourg
    Phone:
    (+352) 8002 10 10
    Telephone: Monday to Friday from 8.00 to 16.00
    Email address:
    info@ml.etat.lu
    Closed ⋅ Opens at 13.30
    Wednesday:
    8.00 to 12.00, 13.30 to 16.00
    Thursday:
    Closed
    Friday:
    8.00 to 12.00, 13.30 to 16.00
    Saturday:
    Closed
    Sunday:
    Closed
    Monday:
    8.00 to 12.00, 13.30 to 16.00
    Tuesday:
    8.00 to 12.00, 13.30 to 16.00
    Thursdays by appointment only

Related procedures and links

Procedures

Links

Legal references

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