The use of home mortgage bridging loans (crédits-relais) has remained soft in the current , Luxembourg’s finance minister has told parliament.
The overall volume of bridging loans stood at around €1.4bn at the end of the second quarter of 2023, stated (DP), citing figures from the financial regulator CSSF. “This same data suggests that despite an increase in overdue bridging loans in recent months, their proportion did not exceed 4.5% of the total volume in July 2023.”
The CSSF’s guidance to banks, “while maintaining a strong prudential regime, has been revised to allow more flexibility in response to the slowdown observed in the real estate market. Thus, bridging loans can now run beyond 24 months in exceptional and duly justified circumstances,” she said.
Backes noted that the government had taken fresh measures this year “to support individuals buying real estate in Luxembourg.” This includes raising the on the 7% property purchase tax (Bëllegen Akt) from €20,000 to €30,000. The on mortgages for primary residences was raised from €2,000 to €3,000 a year, she said.
Backes was responding to a from the CSV MPs and on 3 October.
Homeowners typically use a to finance the purchase of a new home until they’ve sold their current property.