Luxembourg's rental reform has sparked mixed political reactions by splitting agency fees, lowering deposits, mandating written contracts, yet delaying rent cap changes.
Key changes include the shared responsibility of agency costs between tenants and landlords, a reduction in the rental guarantee from three months' rent to two months, and clear guidelines for the return of deposits. The reform also establishes a legal framework for co-rentals and mandates written rental agreements, rendering verbal contracts invalid.
These changes were initially proposed by former Green Party Housing Minister Henri Kox, although his suggested alterations to the rent cap were postponed. The government parties have committed to presenting new draft legislation on the rent cap by the end of June 2025.
Minister of Housing Claude Meisch described the reform as "a small step towards modernisation and tenant protection."
The reform's approval marks a significant development in Luxembourg's housing policy, aiming to improve tenant rights and modernise rental practices.
Opinion – Rent reform: a problem half-solved
Background
Reforms of the rental bill were first proposed under the previous government, and the then minister of housing Henri Kox. Among the changes proposed by Kox was a reduction in the rental cap – the percentage of money invested into the property that can be charges as annual rent – from the current 5% to 3.5%. This part of the amendment was removed.
The initial reform proposal was met with some skepticism. LSAP accused Kox of "deception", stating that Kox had concealed a change in the definition of "invested capital", which sets the ceiling for chargeable rent. LSAP also questioned the fact that older apartments could, under the proposed amendments, seemingly charge higher rents than new-builds.
Kox subsequently responded to the latter point by stating that all relevant information had been made available. However, matters were not helped by a faulty spreadsheet for calculating rental caps being shared by the Ministry of Housing.
Pirate Party MP Sven Clement also criticised the reform, which he labelled "disastrous" and argued "ultimately won't help anyone".The Pirate Party instead favour using lower interest rates as a means of ameltiorating the difficult housing situation, while proposing that the state buy houses on a 'massive scale'.
The bill ended up stalling, and in March of 2024 RTL looked into what exactly happened to it, and what would likely come next, in a summary from earlier this year. In April, it was confirmed that the rent cap had been scrapped.
