Encouraging investors

“Don’t limit tax deductions for investors, as they are the ones who have always supported the rental market,” say , managing director of BPI Luxembourg, , country manager of BPI Real Estate, and Christophe Gilain, chief financial officer of BPI Real Estate .

“Introduce aid for investors, even if it means linking it to the level of rents charged (aid granted, through tax credits for example, if the rent charged respects a certain ceiling),” suggests Louis-Marie Piron, founder of Thomas & Piron.

“Extend the scope of the accelerated depreciation measure to legal entities (SCIs),” puts forth , managing director of Kuhn Construction.

, managing director of Immobel Luxembourg, proposes the following: “Develop tax benefits for institutional investment funds in the context of an investment for low-income housing.”

“Further improve the attractiveness of the financial sector in Luxembourg, in particular the fund industry, which today drives our country’s economy and has a direct impact on the real estate industry,” says , head of real estate at BDO Luxembourg.

“Encourage private investors who already have a main residence and still have investment capacity to acquire a flat that they rent out,” suggests Georges Krieger, avocat à la Cour at Krieger & Associés.

“Reduce the taxable base of rents received by investors (for example, a 50% allowance) to make investment more attractive,” says , partner at Lionstone Capital Management. Another suggestion is the  “permanent reintroduction of 6% depreciation over six years, to stimulate the creation of rental housing, alleviate the housing shortage and relieve pressure on rents.”

“Issue state guarantees to encourage investment in VEFA and restore confidence to individuals,” says , director of Poeckes.

“For public investment, apply a counter-cyclical policy by bringing forward multi-year investment budgets to keep construction sector staff in employment,” Nathan adds.

Mobilising dormant land

"Mobilise the 13,000 empty ‘Baulücken’ spaces that offer great potential, as well as building plots that have that have all the public infrastructure and can therefore be mobilised quickly,” says Nathan.

“Many projects are blocked because owners refuse to develop their land, preventing the development of entire sites,” note Thibaut Gasparini and Diane Baradel, Arcane Architectes et urbanistes. “This situation is holding back housing production and weighing on players in the sector, who have already been weakened by rising interest rates. Ministerial reparcelling is one solution, but other mechanisms could also be envisaged. For example, a system of transfers of land areas within the same site would make it possible to unblock projects whilst respecting the interests of reluctant owners.”

“Increase and extend taxes on undeveloped land, to combat land speculation and encourage owners to release land,” suggests Louis-Marie Piron of Thomas & Piron.

“Considering, on the one hand, the lack of dynamism of certain communes in terms of property tax and, on the other hand, the legal uncertainties associated with a significant increase in the communal rate (cf. Trib. adm, 10 February 2023, no. 45777, confirmed by Cour adm., 28 November 2023, no. 48728C), it would be necessary--pending the overall reform of property tax--to introduce national brackets for municipal rates in the B6 sub-category of property tax. This national law would create an economic incentive for landowners to create housing on their empty plot(s) throughout the country. This minimum rate would be a good sign against land retention,” says Max Leners, avocat à la Cour, Leners.

“Facilitate access to land for public developers,” says , managing director of the Société Nationale des Habitations à Bon Marché (SNHBM), Luxembourg’s national low-cost housing administration.

Review the registration fee and the Bëllegen Akt

“Apply registration duty only to the share of the land and not to buildings already built. If the developer decides to build from scratch, he should not be penalised,” says Steve Vermeer from Lionstone Capital Management.

“Increase the ‘Bëllegen Akt’ tax credit,” suggests Roland Kuhn of Kuhn Construction.

“Support the liquidity of real estate through a general reduction in registration duties, which in Luxembourg are among the highest in Europe,” says , managing partner, DSM Avocats à la Cour.

“Replace the ‘Bëllegen Akt’ with the ‘Gratis Akt’: abolish registration duties and transcription duties for people wishing to acquire a property for personal residential purposes,” suggests Max Leners, avocat à la cour.

This article was written in  for the  of Paperjam magazine, published on 24 April. The content is produced exclusively for the magazine. It is published on the site to contribute to the full Paperjam archive. .

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