In the new law, Luxembourg’s housing ministry has redefined the criteria for financing a rental guarantee or deposit, usually equivalent to three months’ rent.
The proposal would increase the number of people eligible for the state deposit guarantee, by pushing up the net monthly earnings threshold of individuals living alone to €2,900. The guarantee would then increase according to the household composition, the ministry said in a statement on Friday.
The proposed law also means that applicants will only have to prove a regular income of three months instead of six, which is currently the case. The threshold aims to help tenants paying a rent rate of up to 40% of their net income, without the rent being capped. Currently, the guarantee excludes any rent beyond €1,612.28.
To calculate what this could mean, the ministry cites the situation for a household with two children. The mechanism could help finance a rental guarantee until the household reaches a net income of €6,090.15 on a rent of up to €2,436.06. The current income threshold is €4,710.94 covering a guarantee of up to €1,612.28.
Lastly, the new law should make landlords more accountable if they do not meet minimum rental, sanitation, hygiene and security standards. If a dwelling is closed because it does not meet the standards set by law, the owner, operator or commune would have to relocate the tenant.
The cost of this relocation would be borne for three months by the owner.