Affordable housing and rent subsidies
In May 2021 the government announced that it would deliver 4,000 affordable homes by 2025, as house prices continued to rise year on year.
Average rents in 2022 were between €1,479 for an apartment and almost €3,249 for a house, and current affordable housing wait lists have a high number of single parents and families.
However, the government has proposed a new bill to cut the maximum amount that rental prices could be increased from 5% of the capital invested in the dwelling to 3-3.5% (depending on the energy rating of the property), limit deposits to two months' rent and reimbursement of them by landlords to one month. In addition, the government has reintroduced the no eviction policy on residential rentals until end March 2023 to prevent people suddenly finding themselves homeless in winter. There's more information on increased rent subsidies for low-income households at the end of this article.
So what should you do if you cannot afford to rent or buy in the private sector?
You can subscribe to the Housing Fund and the Société Nationale des Habitations à Bon Marché, or SNBHM, or even directly with city authorities in Luxembourg. If your circumstances change dramatically, you should contact the foundation for access to housing, the Red Cross or Caritas.
However, be aware that there are 4,000 people on the waiting list for a flat or house with the Housing Fund, and the SNBHM recently announced that close to 7,500 are on its waiting list to purchase an apartment and 3,500 to rent a place.
The Housing Fund (Fonds du Logement)
Offering both subsidised and non-subsidised housing across Luxembourg, currently you can make an appointment to visit the Housing Fund offices from Monday to Friday 08.30 to 16.00.
The process for application is not easy. You must belong to the country's social security system Centre commun de la sécurité sociale, or CCSS, and you must renew your application annually otherwise you will drop off the waiting list.
Rental of subsidised housing for low-income families is only available for those who do not have another property to live in, and who have a right to residence in Luxembourg.
To apply you must fill in a form and send it together with:
- Copy of ID and residence permit for every member of the household.
- A copy showing your affiliation to the CCSS for three months (for adults).
- A university registration form for students over 18 years of age.
- Proof of your income for the last three months including wage slips, pension income, unemployment benefit, family benefits or income from insurance, alimony or orphan’s pension.
- Certificate of non-ownership of a property in Luxembourg or abroad.
- A copy of your current rental agreement and proof of payment.
- Applicants with disabilities need a medical certificate attesting that they cannot live in accommodation that is not adapted for their disability, or a certificate of invalidity.
Those receiving subsidised rent must pay a deposit of three months' rent and provide proof of insurance for the property.
You can also apply to buy a subsidised home, but again you must not be a homeowner in Luxembourg or abroad (or undertake to sell your current property).
You must complete a form and send it in with a housing aid agreement, financial agreement from the bank that you can take a loan, and ID and residency permits for all household occupants. You’ll find full details and the form here.
Once you’ve purchased the property, you must live in it as your main residence, pay an annual license fee of €27 for an apartment or €50 for a house, and you cannot carry out any exterior work to the property without the agreement of the Housing Fund.
You can also apply to rent or buy a Housing Fund property that is non-subsidised. In which case you need to provide ID, proof of residence, proof of income, a certificate of employment (or contract) and a certificate of non-ownership. The rent must be less than 40% of household income and if you are buying, you must be able to secure a mortgage from a bank.
SNHBM (Société Nationale des Habitations à Bon Marché)
The SNHBM has a rental stock of 300 apartments and is currently constructing units in several locations in Luxembourg.
Those looking to buy an affordable home must lease the land for 99 years and must not be a homeowner in Luxembourg or abroad (or must sell their current home within 3 months of receiving the keys to their property).
The income ceiling to qualify for affordable housing is higher than you might think:
Single person €84,220
Couple €109,310
Couple with three children €151,630
Different rules apply to employees of the EU institutions where a net salary will be calculated.
You can register online and selection is made by taking into account when you registered, and which particular developments you registered for. The property size you are entitled to will depend on your household size. So only a single parent or couple with two children or more can apply for a 4 bedroom unit, and conversely only a single person or couple can apply for a one-bedroom unit.
Each property is reserved for 3 weeks in which time you must get approval for your loan or mortgage from a bank.
In addition to property for sale, SNHBM also has 212 apartments for social rental with between one and four bedrooms. Properties are located in Luxembourg City (Bonnevoie, Cents, Kirchberg and Belair) and in Diekirch, Esch and Grevenmacher.
It also has 10 affordable housing units in Kirchberg specifically put aside for those who don’t qualify for social housing but whose combined income is still too low for private rental.
Luxembourg City (Ville de Luxembourg)
The VdL has 879 dwellings managed by the Service Lodgement which include 192 units for the elderly or those with special needs and 41 affordable dwellings. It recently added 12 new furnished rooms with ensuite showers on rue de la Tour Jcob in Clausen (available from 26 September 2022). To qualify, you must have resided in Luxembourg City for three years and not own a property or have the right to reside in a property. One household member must work in the municipality.
Successful applicants will be put on a waiting list, which like the Housing Fund list requires you to update your application annually in case your circumstances change.
To apply you need to provide the following:
- Residence permit and a copy of ID.
- Social security certificate for the adults in the household and proof of income.
- School or university certificates for children.
- Proof of salary, unemployment or invalidity benefit, family benefits, or pensions.
- A copy of your current lease.
- A copy of your eviction notice (if applicable).
- Any relevant medical information for why you cannot live in your current residence due to disability.
- A certificate of non-ownership of a property in Luxembourg or abroad.
Monthly rent will not exceed 30% of the household disposable income (net income plus benefits), and you must sign up before you can see which properties are available.
The VdL also has 26 housing units in different neighbourhoods and will have more when new housing projects are complete. They vary from single family houses to flats, and are rented to those who work in the city, young households or those with children on an average income.
To be eligible, you must have the right household composition (total number of people), and your household income must not exceed a certain income (defined in thresholds by the city). Rental will not exceed 30% of the household disposable net monthly income and benefits and allowances.
You can sign up to the link here for notifications when a property is vacant.
Foundation for Access to Housing (Fondation pour l'acces au Logement)
This organisation includes Abitatio, a social promoter that constructs housing for long-term rental while working with local municipalities. Recently it worked with the commune of Clervaux to provide 12 three-bedroom apartments in Heinerscheid.
It also runs AIS, a Social Housing Agency that provides housing for those in a precarious position due to poverty or social exclusion, which it runs in collaboration with social services. You will need to be referred to AIS by a social worker and it is possible to rent a property for a fixed period whilst social services also provide support such as retraining to access work, debt repayment, or psychological help for trauma or addiction.
Caritas provides housing for vulnerable people, particularly those who have been homeless for a long time or who are on a very modest income. Housing is provided individually or in groups, in addition to support for addiction, debt or for families already in Caritas shelters.
The Red Cross runs a programme called Cellule Logement in which it asks private landlords to consider their property for social housing. In return, Red Cross can guarantee rent payment and will provide an additional €3,000 for any damage not covered by the deposit.
Rent subsidies
If you don't think you'll qualify for social or affordable housing, you may still be entitled to a rent subsidy, if your rent is more than 25% of your total monthly income.
To qualify for between €200-400 a month in rental subsidy you must be legally residing in Luxembourg.
A single person earning up to €3.126,83 will get a subsidy of €200, a couple on €4.800,49 will receive €360 a month and a family with three children or more can receive up to €400 depending on their income. You can find a table listing the income brackets here, although you may qualify for a slightly lower subsidy than the maximum, so it's worth checking.
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