Tenants: What assistance is available for your housing?

You have decided to settle in the Grand Duchy and are looking for a rental property that suits you. Did you know that, like homeowners, tenants can also benefit from financial aid from the State to help them realize their project? myLIFE offers to review them with you.*

Finding rental accommodation in Luxembourg is no easy task. While there are many specialist agencies and property websites, demand is high and rents are often high. Whether one is an owner or a tenant, the cost of housing thus represents one of the most significant expenses for the country’s inhabitants. So much so that access to housing can be a real problem for those with modest incomes.

In response to this situation, the Luxembourg government has established financial assistance. While some are reserved for future homeowners, others are intended for tenants. This is notably the case for assistance in financing the rental guarantee and the rent subsidy. What is it about? What are the conditions to be able to benefit from it? myLIFE provides some details.

Assistance with financing the rental guarantee

In the Grand Duchy, when you rent a property, the landlord will generally ask you to pay a rental guarantee, also known as a “deposit.” This is a sum of money (equivalent to a maximum of two months’ rent) intended to cover payment defaults (rent, rental charges) and/or potential damage to the property. This guarantee can only be required if a pre-tenancy inventory check has been conducted with the landlord before handing over the keys.

Given the high rental prices in the country, the rent deposit can quickly represent a significant amount of money. If you do not have these funds, the Ministry of Housing and Spatial Planning can, under certain conditions, act as a guarantor on your behalf. This means they commit to paying the guarantee to the landlord if the latter were to demand it.

In exchange, you will need to open a conditioned deposit account with a contracted credit institution and commit to saving by standing order the amount of the rental guarantee over a period of 3 years. The money will then be blocked in favour of the Ministry of Housing and Spatial Planning for the entire duration of the lease and up to 6 months after its expiration.

At the end of the rental period, if the landlord calls upon the guarantee (in case of damages and/or unpaid rent or charges), the State will directly pay the funds to them. Then, the money saved in the conditioned deposit account will be transferred to the State by the financial institution.

To benefit from the rental guarantee financing, the monthly rent (excluding charges) of your rental must not exceed 50% of your income.

What are the eligibility requirements?

First of all, the accommodation must be located in the Grand Duchy and serve as your main and permanent residence. It must have been rented on the private market and not by a public body, such as the Housing Fund, the National Affordable Housing Society (SNHBM), a municipality, etc. The landlord cannot be your father, mother, or one of your children. Finally, to benefit from the rent deposit financing, the monthly rent (excluding charges) of your rental must not exceed 50% of your income.

On your side, you must be of legal age and have a right of residence for more than 3 months in the Grand Duchy of Luxembourg. If you are the owner, co-owner, usufructuary, emphyteusis holder, or holder of a surface right of more than one-third of another accommodation in Luxembourg or abroad, you will not have access to this aid.

Finally, your income must be regular (for at least three months). The same applies to income of your household community, meaning the members who make up your household and live with you, must be below the limits set by law.

Good to know: before signing the lease contract, you can request a certificate from the Ministry indicating the maximum rent and rental guarantee amount you can benefit from. This will help you target your housing searches.

To give you an idea of the amount that could be covered by the State, you can use the rent deposit simulator.

Example

Lucas and his wife wish to rent a small apartment in the Bonnevoie district. They both work: he full-time as a technician at a heating company and she, part-time as a nanny in a family. Together, they earn €4,700 net per month. They have already spotted a few apartments that could meet their needs. As they meet the allocation criteria, they will use the simulator to get an idea of the amount of the rent deposit that could be covered by the State.

The latter indicates that the financial assistance for the rental guarantee they could benefit from amounts to a maximum of €4,700**. This means that the monthly rent (excluding charges) of their future apartment should not exceed €2,350 (i.e., 2 months’ rent excluding charges). They therefore continue their search by incorporating this criterion. They also take the opportunity to check if they can also benefit from a rent subsidy.

The rent subsidy

The rent subsidy is a financial aid provided monthly by the Ministry of Housing and Spatial Planning to cover part of your rent amount. This sum is determined according to the composition of your household and its income. It can vary from €10 to €520 per month.

What are the conditions to qualify for it?

To be eligible for a rent subsidy, the accommodation must be located in Luxembourg and serve as your main and permanent residence. It must be rented on the private market and cannot be rented by one of your ascendants or descendants in the first degree.

To apply, you must be of legal age and have a residence permit in Luxembourg for at least three months. You, or a member of your household, must not own more than one-third of another property in Luxembourg or abroad. Your income must be regular and below the limits set by the law.

For example, a person living alone and earning less than (approximately) €44,700 net per year could receive assistance of up to €200 per month to help pay their rent. A household with one dependent child earning less than (approximately) €84,900 net per year could receive support of up to €360 per month (maximum amounts as of 01/06/2024).

To qualify for the subsidy, your monthly rent (excluding charges) must be more than 25% of the net income of your household community.

Good to know: to qualify for the rent subsidy, your monthly rent (excluding charges) must be more than 25% of the net income of your household community. For example, if you earn €3,500 net per month, the rent must be more than €875.

Just like for the financing of the rent deposit, you can use the rent subsidy simulator to get an idea of the aid you might receive.

Attention: you are obliged to report any change in situation (family and financial) to the Single point of contact for housing assistance, otherwise you may have to repay the subsidies received.

Example

Let us meet Lucas and his wife. The couple has found an apartment with a rent of €2,200. They are going to check the rent subsidy simulator to see if they could receive support. Since they meet the eligibility criteria and the monthly rent represents more than 25% of their net income, the subsidy could amount to €152.91** per month, which still represents more than €1,800 over the year. They therefore decide to try their luck and apply.

How to apply for rental assistance?

If you wish to apply for rental assistance (rent deposit or rent subsidy), start by checking that you meet the eligibility conditions. Then, complete and sign the application form available on the Single point of contact for housing assistance website or at guichet.lu. Attach the supporting documents indicated on the form, then send the entire file by post (or drop it off) at the Single point of contact for housing assistance (11, rue de Hollerich L-1741 Luxembourg).

Good to know: rent deposit financing assistance and rent subsidy can be combined.

Find more information on rental assistance on the Single point of contact for housing assistance.

Rent deposit financing assistance and rent subsidy can be combined.

* Content translated from French by the BIL GPT AI tool

** The amounts indicated by the simulator are provided for informational purposes.