Housing is the government’s number one priority. In the coalition agreement published this Friday morning by Reporter.lu, the word “housing” appears 145 times.
The plan that prime minister Luc Frieden (CSV) has entrusted to Claude Meisch (DP), the new housing minister, includes a series of analyses to be carried out on the market and on regulation. It’s a very complex subject with many levels to it.
The analyses are to address:
--the granting of mortgage loans, with a view to studying possible adjustments to the relevant legislative framework (in line with European law)
--the possibility of extending the system of subsidies for the creation of affordable housing to private players
--interest-rate subsidies and the state’s guarantee that they will be effective in helping first-time buyers and low-income households
--legislation on sales before completion (“VEFA, or vente en l'état futur d'achèvement”)
--and a tax exemption for premiums paid by companies to rent out housing
The main measures
Below are the ten key measures in this battle plan.
--The rate of accelerated depreciation for housing built for rental purposes and the length of the depreciation period will be increased. The total amount of tax relief will be capped.
--The tax rate on capital gains realised on the sale of a property will be reduced.
--A new “Bëllegen Akt” tax credit for investment in rental housing by individuals will be introduced.
--The exemption for net income from renting a home through an organisation involved in social rental management will be increased to 90%.
--The government will consult with the European Commission in order to reach agreement on the possibility of increasing the amount of the tax concession--regarding the 3% housing VAT--and of introducing transfers of capital gains on property within the country.
--A national register of buildings and dwellings will be set up to record occupied and unoccupied dwellings and to calculate tax on vacant dwellings. Vacancy tax will be introduced and the level of tax will be increased.
--The government plans to develop off-perimeter land close to urban areas and in locations conducive to the harmonious development of towns and villages. This land will mainly be reserved for the construction of affordable housing for rent and sale under long leases.
--The government will create a legal framework for the lease-purchase of rental housing built by local authorities or public developers.
--The government will take the initiative of launching a public fund through which private individuals can invest in property projects. The fund will invest not only in affordable housing but also in collective housing.
--The government plans to create tax incentives to enable companies to create and provide housing for their employees on favourable terms.
In the area of transparency, the government is committed to providing home buyers and tenants with more transparent information on property prices, by regulating the content of property advertisements. The requirements for access to the profession of estate agent will be tightened.
Below is the text of the coalition agreement (in French only).
This article was originally published in Paperjam. It has been translated and edited for Delano.