Tax incentives to encourage long-term home rentals

The á Reyni district in Tórshavn’s city centre used to be a lively place where neighbours visited each other and children played around the houses.

Today, however, the community spirit in the old-town neighbourhood appears much less vibrant.

“Many of the houses around us are empty most of the year,” says Kristian Blak, who has lived in the district for almost 50 years.

“But then, in the summer, we see people in these houses and we don’t know who they are. It leaves us with a bit of an empty feeling.”

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This is just one example of a growing trend across the country.

Figures from 2021 show that of the approximately 18,880 residential properties in the Faroes, 2,614 (about 14 percent) are not occupied by full-time residents.

Meanwhile, the country is experiencing a massive housing shortage.

This is a problem, and the government is working on solutions.

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One such solution is imposing mandatory occupancy requirements for homeowners and introducing service charges for homeowners who do not reside in the municipality where their house is located.

The government is currently negotiating this with local councils.

But this is not enough to solve the problem, says Ingilín D. Strøm, the Minister of Environment, Industry and Trade, who is also responsible for housing.

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“We know that some local councils have requested these mandatory occupancy requirements and service charges for homeowners, but we cannot guarantee that all local councils would adopt this approach,” she says.

"Another solution under consideration involves implementing tax incentives for long-term rentals and imposing higher taxes on Airbnb renters."

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Back to á Reyni resident Kristian Blak, who was born in Denmark but moved to the Faroes in 1974:

“Having close relations with our neighbours has meant a whole lot to us over the years,” he says.

“This new situation has somehow strenghtened the bond among those of us who remain in the district. But there are times when we feel a bit lonely here.”

Read the Faroese version of this article here.

Translated by prosa.fo.

More Faroese News in English.