Henri Kox, Minister of Housing; Credit: MLOG

On Thursday 6 October 2022, on the proposal of Luxembourg's Minister for Housing, Henri Kox, the Government Council adopted a series of amendments to the bill no. 7642 on the overhaul of the rental lease.

The amendments aims to give better protection to tenants on the private market as well as to bring more transparency to the landlord-tenant relationship.

A key element of the amendments is the complete revision of the rent ceiling mechanism aimed at protecting tenants effectively against usurious rents.

The principles of the reform project:

  • Reform of the rent ceiling:
    • the maximum annual rent ceiling, currently limited to 5% of the capital invested (revalued and discounted) in housing, is reduced to a rate of 3.5% of the capital invested revalued and discounted,
    • 3% respectively for dwellings with only an energy performance certificate of categories F, G, H or I (dwellings whose energy efficiency induces high heating costs).
  • Increased rental market transparency and landlord accountability:
    • it will become mandatory for the owner to determine the capital invested, revalued and discounted, before renting out his accommodation,
    • the amount of capital invested, revalued and discounted must be indicated in the lease contract,
    • Otherwise: a sanction provides for a rent limit of €8 per m2 of surface.
  • Improvements to the colocation system:
    • the provisions on joint tenancy will be mandatory,
    • a colocation lease contract may also be concluded in the event that the lessor also lives in the accommodation rented out via a colocation lease contract.

According to Minister Kox, "with these amendments, I have finally been able to complete the reform project with the essential elements which were not unanimously accepted two years ago: an effective rent ceiling, the obligation for the owner to determine the invested capital, the obligation of a written lease contract with an indication of this invested capital in order to give tenants the transparency necessary to protect themselves against usurious rents”.