Faroese government demands special housing construction

The Faroese housing minister has ordered Bústaðir, the public housing agency, to prioritise construction for young people, students, the elderly, and those with special needs, state broadcaster KVF reports.

Negotiations will now begin on how to implement the directive. The government also plans to review its 2012 housing policy.

Rent increases will be capped at the rate of inflation unless exceptional circumstances justify higher hikes. Authorities will also explore creating a housing fund to support first-time buyers.

To encourage long-term rentals over short-term platforms like Airbnb, the minister proposes limiting tax exemptions on rental income to properties leased for 12 months or more. Currently, landlords can deduct up to 100,000 krónur in tax.