The urgent challenges facing Luxembourg's housing market, from tax policy to the pace of regulation, were the focus of a debate between Housing Minister Claude Meisch and Green Party MP Sam Tanson on Saturday.

In a discussion on RTL Radio this Saturday, Minister of Housing Claude Meisch and Green Party (Déi Gréng) MP Sam Tanson debated the central challenges in Luxembourg's housing and national planning, revealing both common ground and pointed criticisms.

The debate highlighted differing views on the government's progress. MP Tanson, who heads the Green Party parliamentary group, critiqued the pace of action from the Ministry of Housing. She called for Minister Meisch to urgently present a new rent cap and to accelerate measures such as the tax on vacant properties. "The texts are ready," Tanson stated, arguing that "the current government is not giving itself the necessary means" to implement them.

In response, Minister Meisch defended his approach, reiterating that the tax on vacant homes is part of the coalition agreement and that technical preparatory work is ongoing. He emphasised that his ministry is already taking parallel action, specifically through social rental management, to "turn a few screws" and mobilise additional housing supply.

On the issue of land availability, the two politicians found consensus. Minister Meisch argued that politics had "collectively failed in the past" by not having the state build up its own "land reserve," leaving it with too few plots today. He contended that with more public land, the state could act more effectively as a market regulator and launch more development projects directly.

Both officials also agreed on the need for strategic, quality construction. Minister Meisch stressed that development cannot be "wild" and must prioritise the re-use of old brownfield sites, citing the "Metzeschmelz" project as an initiative that "must definitely go ahead." He added that the country clearly cannot be sealed "at will." Echoing the importance of sustainable planning, MP Tanson pointed out the value of building homes and neighbourhoods in areas already well-connected to public transport and existing infrastructure.

Off-plan programme 'must and will' continue

Minister Meisch pledged that the government's public procurement programme for off-plan housing (vente en l’état futur d’achèvement – VEFA) "must and will" continue. He stated that what was initially a crisis instrument under former Housing Minister Henri Kox should remain a pillar of housing policy. The programme, which involves the state purchasing homes before construction is complete, has seen over 500 homes acquired so far, utilising two-thirds of its €1.5 billion budget.

In response, MP Tanson issued a clear appeal for the state and municipalities to intensify their efforts, arguing they should "buy even more homes themselves to create a larger state-owned property portfolio."

Tax policy's role in housing

The discussion also covered the role of tax incentives in addressing the housing crisis. Minister Meisch acknowledged that the temporary reintroduction of a "6% accelerated depreciation" scheme had a slight positive effect on the struggling construction sector. However, he firmly opposed reintroducing broader tax instruments that, in his view, had previously failed to help people and contributed to market overheating.

Meisch stated that while he is open to discussion, any tax incentives should not only benefit investors but also the people who live in the properties. "Simply reducing taxes so that the capital gain for a developer or a first-time buyer becomes larger cannot be the ultimate goal of a housing policy in the long run," he concluded.

Meanwhile, MP Tanson highlighted a different concern, noting that under the current system, tenants are unable to benefit from any form of tax incentive.

Meisch suggests rethinking registration fees to adapt to market

Minister Meisch called for a reconsideration of Luxembourg's housing-related tax policy, arguing it is no longer aligned with current purchasing behaviour. He noted that the existing model is primarily geared towards buying off-plan properties, an option potential buyers are now hesitant to pursue. In light of this, the Minister suggested the need for a potential new tax framework and explicitly questioned the current 7% registration fee.

Green Party MP criticises pace of administrative simplification

In the final segment of the discussion, Tanson shifted criticism to the government's progress on administrative reform. She contended that of the various announced measures, it has been the policies with negative environmental impacts that have been prioritised for implementation. Conversely, she argued, promised simplifications for the public – particularly a single, unified building regulation – have been significantly delayed and "are still a long time coming."