The 2027 Draft Budget proposes abolishing the Built Property Tax exemption for vacant apartments, a measure previously proposed in 2022 but removed by Parliament. While this could help recover tax revenues and discourage keeping properties vacant, the proposal in its current form raises concerns, including preferential treatment for developers and the absence of a progressive approach based on the duration of vacancy and owners’ wealth.

Lebanon’s existing tax framework has historically facilitated vacancy and real estate speculation by making it easier to declare properties vacant and benefit from tax exemptions. With high vacancy rates and a significant stock of usable but unoccupied housing, abolishing the exemption could be an important first step towards bringing vacant units back into use and curbing speculation.

However, abolishing the exemption alone is insufficient. A separate, progressive vacancy tax is needed to further discourage long-term vacancy, increase the supply of available housing and help address Lebanon’s ongoing housing crisis and the displacement caused by the Israeli war.