TAXES: TOWARDS THE END OF PROPERTY SPECULATION?

It was a promise from the Bettel government. Almost 100 years old, the property tax law will be reformed. A bill was introduced last October. And it will considerably change the situation, especially for owners of unoccupied properties.

Housing has been a central concern of Luxembourgers for several years, in particular due to the shortage of housing in Luxembourg. To address this, the government has been working for several years on a property tax reform. Last October, a bill was introduced. It not only provides for a new method of calculating property tax, but also the creation of two new taxes: the tax on the mobilization of land (l’imp?t sur la mobilisation de terrains) and the tax on the non-occupation of housing (l’imp?t sur la non-occupation de logements). To adhere more to the reality of the real estate market, the property tax will be established according to several criteria: the building potential of the land, its methods of allocation, its geographical location, its availability for construction, its surface, nearby infrastructure and the general level of real estate prices. This is hard to see clearly for the individual. It is for this reason that the State has set up, pending the adoption of the bill, a ?? 2.0 version of the simulator for calculating property.

In addition to this overhaul of the property tax, the government wishes to replace the B6 tax which exclusively concerns building land for residential purposes by introducing the tax on the mobilization of land. All building land that can accommodate new construction will therefore be taxed. The amount of this tax will be established according to the location of the land within the special development plans (PAP - plans d'aménagement particulier) of the municipality and the years during which the land has remained unused. A reduction per child under 25 will also be provided.

In the same spirit, the bill wants to create a tax on the non-occupation of housing. Thus, the owners of uninhabited houses or apartments will be taxed up to 3,000 euros per unoccupied dwelling for the first year. In subsequent years, the tax will be increased by 900 euros per year, up to a maximum amount of 7,500 euros.

Although the bill was introduced recently, its entry into force may not take place before 2028, or even 2031. In other words, nothing is won.