Property tax reform not approved by the State Council
Property tax reform means removing housing from the standstill. It would be an incentive for owners to rent out unoccupied dwellings and a contribution to the easing of tensions in the property market.
The initiative itself is clearly needed in Luxembourg. However, the Council of State has asked the working group to completely rewrite the proposed draft. The point is that the current version of the document would lead to a confusion between the administrative decisions and the tax procedures. It would also not guarantee transparency and accessibility. These are some of the main criteria.
The Council points to significant legal uncertainties. In particular, it criticises the distinction between urban and green zones in the definition of land subject to property tax and mobilisation tax.
The authors include Taina Bofferding, Minister of the Interior, Henri Kox, Minister of Housing, and Yuriko Backes, Minister of Finance. The Council of State recommends a complete rewrite of the text, as it does not take into account the legal complexity of the matter, particularly with regard to procedural aspects.
Various organisations, such as Syvicol, the Chamber of Salaries and the youth parties, have expressed their reactions to the property tax reform. The Young Greens and Young Liberals have criticised the reform, claiming that it lacks sufficient depth. The Chamber of Salaries shares a similar opinion. Syvicol, a local government association, is disappointed that the revenue from the new mobilisation tax will not go to local authorities.
This is not the end of the law, but something will have to be done about the 17 formal objections raised by the state. The text is being finalised and it is not yet clear when the next meeting will take place.
