The government sees property tax reform as one of the ways to tackle the housing problem. In his state of the nation address, Bettel (DP) confirmed that a bill to reform property taxation will be tabled within the next 12 months. In the crosshairs will be those who hold real estate for the sole purpose of speculation, or who tie up land for the same purpose.

It remains to be seen what form this reform will take. Discretion remains the order of the day. Especially when it comes to the tax rate that could be applied. In a recent parliamentary reply to deputies François Benoy (Déi Gréng) and Marc Hansen (Déi Gréng), Taina Bofferding remained cautious: "It is still too early to mention precise rates, the determination of which presupposes more in-depth analyses, which have yet to be carried out.”

Nevertheless, she also provided some concrete elements that hint at the outline of the bill:

- There is no question of a minor reform whose effects would be null and void. If real estate prices increase every year (+14.5% in 2020), and the same applies to land, taxation will have to follow the same trend. "As part of the work to prepare the bill, simulations will be carried out to define a critical threshold, although it is certain that the rates will have to increase progressively over time to achieve the purpose of the tax," the minister said.

- As far as land is concerned, pressure will initially be put on the owners of undeveloped land. According to Taina Bofferding: "Both land that can be built on immediately (so-called Baulücken) and land that still needs to be developed in areas that are primarily intended for residential use will be targeted. Moreover, account will be taken of the extent of the work and procedures required prior to building on the land concerned, particularly in terms of special development plans.”

- The tax will also be progressive, "annually from the time it is first due".

- Those who had hoped to see the project languish until the next generation of general development plans (PAG) had been adopted by all the municipalities will be left disappointed. "The number of PAGs whose redesign has been completed is already sufficient to be able to carry out reliable simulations to finalise and calibrate the new property tax calculation model," the minister explained. However, she acknowledged that "the new generation of PAGs is an essential prerequisite for the subsequent preparation of property tax forms.”

This story was first published in French on . It has been translated and edited for Delano.