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The Idea Foundation has presented six new measures to boost Luxembourg's struggling residential property market

Residential investment in Luxembourg has been lagging behind for some time, according to economist Michel-Edouard Ruben from the Idea Foundation. In a working paper presented to the press on Thursday, Ruben outlined six ways to move housing policy beyond its usual automatic responses, namely, the fiscal measures the government often recycles in an effort to stimulate the property market.

Ruben noted that government initiatives such as the recently announced housing construction booster package largely rely on the same standard measures: accelerated depreciation, lower VAT rates for rental housing, and exemptions from registration fees on certain properties. The Idea Foundation instead aims to offer proposals that go beyond these familiar approaches, according to Ruben.

One particularly noteworthy proposal is the creation of a mutual fund dedicated to building housing for employees. This fund would be financed by a new housing contribution: a 0.5% levy on all professional income in Luxembourg. Ruben calculates that such a tax on wages could raise around €200 million per year. With this level of funding, the mutual fund would become one of the country's largest investors in real estate and would be managed by Luxembourg's social partners, Ruben explained.

The idea is inspired by a previous temporary budget-balancing tax, which was used to finance child benefit reforms between 2015 and 2017, and worked very well back then, according to Ruben. He also argued that this new contribution could partly offset the loss of tax revenue expected from upcoming changes to income tax classes.

Also today

• Police have issued a missing person appeal for 28-year-old Téid Gasparini, who has not been seen since Tuesday.
• The ADR youth wing, ADRenalin, has hit back at the newly formed Platform for Democracy launched by rival political youth sections.
• The teachers' union Féduse-CGFP has expressed deep concern over Luxembourg’s poor PISA results.
• New York commemorated the 25th anniversary of the devastating September 11, 2001 attacks Friday with a ceremony marked by controversy.
• A Hong Kong court has handed three Tiananmen vigil activists jail sentences of between five and seven years on Friday for national security crimes.
• The Iran-backed Houthis have today seized control of Yemen's entire Red Sea coast and captured three strategic islands.

On air

Tom is a film buff and is jolly excited about the forthcoming British & Irish film festival taking place from 19-27 September, and also the CinEast festival, which takes place from 9-25 October.

Figure of the day

70 offences recorded in major police checks in Luxembourg City and on Dudelange A3

• During targeted police operations carried out on Wednesday and Thursday in Luxembourg City and on the A3 motorway near Dudelange, officers recorded 70 traffic offences. Among these, 26 drivers received fines of €250 and four penalty points for using their mobile phones while driving.
• Ten motorists were fined €49 each for sounding their horns or flashing their lights without a valid reason. Police also reported that two drivers could not present valid driving licences, and one motorcycle was seized during the checks.

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