Luxembourg’s richest gain most from housing aid
Luxembourg’s wealthiest residents benefit more from housing aid than those on lower salaries, a report by the country’s main real estate research institute published on Tuesday showed.
Subsidies, tax relief and financial grants are available to those buying and renting homes in the country in a bid to help counteract steep real estate prices, but these measures are more advantageous to the well-off, the report said.
“The benefit of all of these measures together is higher for the richest households,” the report from the Luxembourg Institute for Socio-Economic (LISER) said.
Nearly three quarters of those renting rooms or homes are in Luxembourg’s lowest income bracket, the report said. Yet only 2% of real estate in the country is social housing – for those who cannot afford rents - or affordable housing – designed for those on lower incomes.
Not many people are actually eligible for rent subsidies and only around 33,000 households in Luxembourg can benefit from rental aid, at an average of €143 per month, the study said.
The cost of housing is a concern for the vast majority of Luxembourgers, with 82% of voters saying that they were "greatly worried" about access to affordable housing, a poll released in November found.
For those on smaller salaries hoping to get on the property ladder it is difficult to secure financial grants. Only 40% of those in the lowest income bracket can access them, and only 22% of the second lowest income bracket.
Homeowners - generally on higher salaries - benefit from a tax deduction on their mortgage interest rates.
Luxembourg has some of the highest real-estate prices in Europe and house prices rose by more than 17% at the end of 2020 compared with the same period the previous year.
The value of land designated for construction rose by 83% between 2010 and 2019, while house prices rose by 65% for existing units and by 62% for homes under construction over the same period.
Steep housing prices have pushed thousands to move to neighbouring Germany, France and Belgium for cheaper properties.