During the government’s recent presentation of support measures for the construction sector, Fayot addressed the respective solutions proposed by the CSV and labelled them unrealistic.
According to the politician from the Luxembourg Socialistic Worker’s Party (LSAP), temporarily reducing the VAT on investments into rented flats by private investors to 3% is “unworkable”.
Speaking to RTL reporters, Minister Fayot elaborated: “It is quite surprising for a serious party with a legal practitioner, Luc Frieden, as lead candidate, who actually should know this if he were to take a look at the directive. We don’t have this margin to manoeuvre and change the rate...the reduced rate has special treatment here in the country, and then we would fall back to our regular rate, which I think is in nobody’s interest.”
In other words, Minister Fayot believes that the proposed change would mean that construction and renovation work becomes more expensive for owners currently benefiting form the super-reduced rate of 3% on amounts of up to €50,000. He concluded: “And I think it is dangerous to keep on presenting this measure as sort of a miracle cure for the construction crisis as it is simply not doable.”
The housing crisis has highlighted the need for people to have more disposable income, CSV lead candidate Frieden had said. While the CSV aims to stimulate sales and support private investments, they do not prioritise taxing capital gains.
