Housing proposals aim to alleviate high costs for first-time homebuyers in Faroe Islands

Housing in the Faroe Islands is currently too expensive, according to the Union Party, which has proposed a solution to this issue.

The Union Party’s housing package includes various measures aimed at easing the burden for first-time homebuyers, particularly young people and families.

To address the challenge of saving enough for a down payment, the Union Party suggests establishing a housing fund of 200 million Danish kroner. First-time homebuyers would be able to borrow five percent of their own financing, capped at 200,000 kroner. The party proposes that the public housing company, Bústaðir, manage this new housing fund and its loans.

Many people struggle to afford high housing loans, prompting the need for a system that allows individuals to use their funds to repay loans instead of solely saving for retirement.

In addition, the Union Party’s new housing policy, presented by Erhard Joensen and Bárður á Steig Nielsen, includes a proposal allowing first-time homebuyers to receive half of their pension contributions as regular salary payments for ten years. This would provide higher disposable income and improve their ability to repay housing loans.

Furthermore, the party plans to increase parental benefits, raising the upper limit for payments to 40,000 kroner monthly. If necessary, the entry fee for the parental benefit scheme would also increase to finance the higher payments.

The proposed changes would cost approximately 50 million kroner, which the Union Party plans to fund through a seven percent special tax on banks and insurance companies. They also aim to increase housing support for renters, managed based on individuals’ incomes.

Implementing this housing package would require several legal changes, with some measures expected to take effect next year and others by 2026.