Reform of the land tax (IFON)
It’s price noting that the land tax in its present type is likely one of the oldest taxes within the Grand Duchy, and that the unit values at the moment used date again to 1941! The principle targets of the land tax reform are to get rid of the inequalities generated by the present IFON and to create a brand new analysis mannequin that will probably be extra goal, clear and truthful. The reformed land tax additionally introduces a novelty, particularly a tax discount on the primary residence, as a hard and fast quantity for every taxpayer. It must also be famous that the longer term IFON will stay a municipal tax.
The Minister for Dwelling Affairs, Taina Bofferding, could be very happy with the mission: “It is a nice leap ahead! For many years, the reform of the land tax has been debated: We now have acted to make this reform a actuality! I wish to make it very clear that the intention of this reform is to not generate further tax income, however to get rid of the basic injustices of the present system.”
With a view to permit residents to estimate the quantity of land tax they must pay underneath the deliberate reform, the federal government has arrange a simulator accessible at: grondsteier-rechner.lu.
Introduction of a land mobilisation tax (IMOB)
One other problem of this reform is the struggle towards the infamous housing scarcity in Luxembourg. To this finish, the invoice introduces a tax on the mobilisation of land, whose function it’s to encourage the efficient building of housing on the land devoted to this finish. The IMOB is an innovation and is predicated on the institution of a nationwide register of undeveloped land, which lists all land obtainable for building underneath the overall growth plans (PAG). A distinction is made on this regard between land that’s instantly constructible, and land that requires the completion of prior roadworks and public and collective infrastructures.
“The land mobilisation tax will probably be calculated on the identical foundation because the IFON. It’s unacceptable that house owners don’t construct housing on their land, though it’s meant for this function, whereas increasingly individuals, younger individuals, households, can not afford to dwell in Luxembourg”, emphasises Taina Bofferding.
Introduction of a nationwide tax on the non-occupation of housing (INOL)
By introducing the INOL, complementary to the reform of the IFON and the IMOB, the federal government intends to mobilise current unoccupied housing.
The municipal tax on unoccupied dwellings, launched in 2008 on an non-compulsory foundation as a part of the Housing Pact 1.0, having failed to provide the anticipated outcomes, will probably be changed by a brand new obligatory nationwide tax.
A dwelling is taken into account unoccupied if no pure particular person is registered in it for a interval of six months. The municipality should set up {that a} dwelling will not be occupied.
The INOL will probably be levied by the Luxembourg Inland Income for the good thing about the State will quantity to three.000 euros per dwelling for the primary yr. The tax will improve by 900 euros per yr as much as a most of seven.500 euros. If the property stays unoccupied, this quantity will probably be due yearly.
“Within the face of the housing scarcity, leaving houses unoccupied is a luxurious we will not afford. Making the tax on the non-occupation of housing operational is due to this fact important. That is much more justified as now we have, with 30 organisations energetic in Social Rental Administration, a system that makes it very simple for house owners to lease out their houses. Greater than 1.000 housing items in Social Rental Administration are proof of this”, emphasised the Minister for Housing, Henri Kox, on the press convention.
Introduction of a nationwide register of buildings and dwellings (RNBL)
The gathering of the INOL requires the creation of a nationwide register of buildings and dwellings.
The primary goal of the RNBL is to assign a singular identification quantity to all sorts of buildings and to every separate dwelling inside the buildings. It will allow municipalities to register their inhabitants not solely at an handle on their territory, but in addition in a dwelling recognized by its nationwide identification quantity. That is essential to implement the INOL.
As well as, the RNBL offers efficient added worth in lots of areas of administration for the good thing about residents, whether or not for statistical or tax functions, for scientific analysis or for planning functions, by making it potential to determine buildings and dwellings with rigour and precision.
Thus, it’s indispensable for bettering the mandatory transparency of the nationwide constructing inventory, which remains to be missing at this time. Specifically, the RNBL will make it potential to higher help the implementation of the laws on sanitation and the letting of (furnished) rooms.
Yuriko Backes, Minister of Finance, feedback: “The measures we’re proposing at this time type a coherent and complete bundle. The land tax will probably be reformed to make it extra fashionable and truthful. The intention is to not create a further tax burden for residents and corporations, which in instances of disaster and inflation wouldn’t be fascinating. This tax will probably be supplemented by a brand new land mobilisation tax and a tax on the non-occupation of dwellings. The first goal of this measure is to place a critical brake on hypothesis and the expansion of property costs, as a way to improve provide, to not generate further income.”
Press launch by the Ministry of Dwelling Affairs, Ministry of Housing, the Ministry of Finance