On Monday 26 October 2026, the Luxembourg Employers' Association (Union des Entreprises Luxembourgeoises - UEL) published its position on the occasion of the first meeting of the Tripartite Housing Monitoring Committee.

Private-sector housing stakeholders and employer representatives, under the coordination of UEL, reiterated the urgent need to restore the conditions necessary for a sustainable recovery in housing construction in Luxembourg. They also highlighted the common interest of trade unions, businesses and the government in reviving housing production.

According to UEL, while housing needs are estimated at between 5,000 and 7,000 housing units per year, current production, limited to approximately 1,000 housing units annually, remains largely insufficient. At the same time, residential investment accounted for only 2.9% of GDP in 2025, compared with an average of 3.8% over the period 2014-2019, whereas a level close to 5% of GDP would be necessary to meet the country's housing needs.

The situation remains particularly concerning in the VEFA (sale of property in a future state of completion) market. After only 149 sales recorded in the fourth quarter of 2025, 207 sales were recorded in the first quarter and 226 in the second quarter of 2026, levels that remain far below the average observed before the crisis.

Given the scale of the needs, the recovery of housing construction requires greater mobilisation of private and institutional investors, in addition to public efforts.

In this context, employer representatives presented several possible measures aimed at restoring confidence, strengthening the attractiveness of residential investment and enabling the launch of new projects.

The main proposals include:

  • Adapting the accelerated depreciation scheme, particularly by extending it to real estate civil partnerships and adjusting the current threshold of €600,000 according to the type of housing concerned;
  • Creating an alternative environmentally oriented scheme allowing the application of a reduced VAT rate of 8% to housing meeting the criteria for energy performance class A;
  • Relaxing certain conditions governing the application of 8% VAT to rental housing intended for social purposes;
  • Establishing a legal framework allowing the use of rent-to-buy ("Mietkauf");
  • Introducing a genuine completion guarantee, rather than a simple repayment guarantee;
  • Introducing a 21% tax allowance applicable to VEFA purchases of housing meeting a high level of energy performance;
  • Introducing the possibility of temporarily renting out housing units held in stock without the future purchaser losing the benefit of the housing VAT scheme;
  • Adapting the taxation of rental income to strengthen the attractiveness of property investment.

Employer representatives welcomed the constructive nature of the discussions held during this first meeting of the Tripartite Housing Monitoring Committee.

They consider that the Monitoring Committee should enable the various proposals discussed to be examined in greater depth without delay, with a view to reaching concrete measures capable of supporting housing production. In this regard, they emphasised the need to reconvene the Monitoring Committee as soon as possible in order to continue discussions and take appropriate measures.

UEL also stressed that, beyond the real estate sector, the housing crisis represents a major challenge for Luxembourg's attractiveness, competitiveness, labour market and, ultimately, the sustainability of its economic and social model