Last week, the government proposed a draft law by which only 3.5% instead of 5% of invested capital could be requested as rent in the future.
Asked about this initiative, MP Lies admitted that his party has little appreciation for the draft bill. Aside from the proposal itself, the politician further criticised that the Chamber’s housing commission, in which he is the vice president, was only informed shortly beforehand.
MP Lies further noted that many questions about the proposal remain open in his eyes. He illustrated this argument by pointing out that, after having bought an 80-square-metre apartment for €375,000 in the last twelve months, a person was able to charge a maximum of €1,560 rent per month.
If the government proposal is passed, the same rent would be limited to €1,093 per month. The CSV politician believes that selling will therefore become more lucrative than renting for many landlords, which in return will bring down the number of apartments available for rent.
MP Lies acknowledged that the matter cannot be trivialised since there is a high number of apartment owners who benefited from high rents without having to pay back significant loans. Nevertheless, he is convinced that the government’s proposal will be felt by the middle class, not just by high earners.
The change to capital investments is a demonisation of private investments and of renting, argued the CSV politician. He does not understand why the private sector is not more included in the management of social housing. He believes that a market in between social and private could represent the right way forward, as this would allow owners to rent out their apartments at affordable rates while receiving tax cuts of 50%.
Asked about the reform of the real-estate tax and the introduction of the so-called ‘mobilisation taxes’ on unused real estate, MP Lies expressed his support as his party has long advocated for this initiative. But again, many questions remain open, he said.
Earlier this year, the CSV proposed different measures to counteract the lack of housing opportunities in Luxembourg. Those include a more liberal approach to the opening of building parameters where possible and to construction density in some areas.
However, MP Lies concluded by noting that in his home town, Hesperange, density would be unfavourable since the planned bypass is not yet finished and there is already substantial congestion due to too much traffic.
