The higher the price, the greater the problems (L'essentiel)

The planned increase in VAT could deaden the interest of Luxembourg citizens in buying or renovating real estates.

 
If you want to buy a real estate in Luxembourg, you have to dig deep into your pocket since prices stand at € 5,265 per square meter. This figure released by the “Observatoire de l’habitat” has quickly circulated and provoked many reactions. The first one to speak up was the CSV MP Marc Lies, who raised the following question in Parliament: “Is there a direct link between the increase in real estate prices and the government’s announcement to increase the VAT to be paid on an eventual second home?”

Steve Heiliger, a spokesman for the civil servants’ trade union CGFP, however, points out that the increase in VAT may also have effects on the purchase and renovation of first homes in Luxembourg. He believes it is possible that in the coming years fewer new homes will be bought and less old buildings will be renovated. “The upper limit for the respective grants was already reduced in 2013 from 60,000 to 50,000” Heiliger says. In addition, the VAT increase to 17% would reduce the purchasing power of the local citizens.

If buyers want to continue to benefit from the grants to the same extent as they did until now, “the upper limit should increase from 50,000 to 93,800 €” as per estimates made by the CGFP. Due to the current economic situation the proposal is cut and dried. This fact leads the trade union to the conclusion that the political decisions of the past months have been “unrealistic, incomprehensible and unfair.”