Empty building tax slow to take off in Luxembourg

Four out of the five Luxembourg communes which have adopted the empty building tax have yet to use it.

According to figures published by Luxembourg Housing Minister Maggy Nagel, a total five communes have introduced the so-called empty house tax, introduced to ease Luxembourg's acute affordable housing shortage and prevent thousands of unused buildings from sitting empty.

Nine buildings taxed

Among communes applying the tax, the first was Esch-sur-Alzette, adopting the rule on January 1, 2013, followed by Beckerich, Diekirch, Esch-sur-Sûre and Redange-sur-Attert.

However, only one commune, Beckerich, has successfully taxed any landlords. Responding to a parliamentary question by Justin Turpel, Maggy Nagel wrote that Beckerich identified 39 empty properties to which the tax could be applied. Of that number, nine were taxed in 2013.

Ms Nagel explained that Diekirch had experienced some delays in 2013 after the Interior Ministry rejected its request to increase the tax, on the basis only a larger sum would incentivise landowners to sell or rent out empty properties.

Empty house tax explained

The tax is based on the external space of a building. During the first year, landlords will be taxed at 150 euros per facade metre, the second year 200 euros and the third year 300 euros. Owners of unused building plots will pay 15 euros per square metre during the first year, 30 euros during the second and 50 euros during the third.

The tax does not apply if the house is in the process of being sold, leased or altered. When selling, the landlord must obtain an official procedural notice to be exempt from the tax. Exceptions are possible in the case of inheritances or where the owners have moved to a retirement or nursing home.

Don't miss out on the news – sign up to receive the wort.lu newsletter in English delivered to your inbox six days a week.