Luxembourg to Raise Tax Exemption to 90% for Social Rental Management

“Social rental management is one of the instruments available to the ministry to support the rental sector and in which everyone benefits: households having difficulty accessing housing, owners who can rely on the security of management by the GLS partner, the GLS partner which has the necessary accommodation for its customers, and even the municipalities benefit financially from it. This is an effective instrument for mobilising unoccupied housing which has proven itself,” underlined Minister Meisch.

Social rental management, initiated by the State in 2009, aims to mobilise unoccupied housing and provide affordable housing for low-income households. Various entities, including municipalities, public developers and non-profit organisations, among others, collaborate with the ministry to rent unoccupied private housing to those in need at rents significantly below market rates.

Incentives for property owners participating in social rental management include guaranteed rent, tenant supervision, property availability for personal use and property maintenance assistance. Additionally, owners benefit from tax exemptions and financial contributions from the Ministry of Housing and Spatial Planning and municipalities.

Agreement partners receive from the ministry a contribution of €120 per month per accommodation, and an amount of €20 per month per additional contract for the same accommodation if it is “shared” accommodation, to cover the management and maintenance costs in direct relation to the accommodation.

Municipalities benefit from an additional financial advantage. As part of the Housing Pact 2.0, a budgetary allocation of €2,500 per year is provided for per accommodation managed under the GLS regime in the territory of the municipality participating in the pact. For this allocation, the ministry takes into account all housing managed under the GLS regime of all approved partners.