First-time home buyers to benefit from interest subsidy scheme
Earlier this month, Justice Minister Chris Said announced the new interest subsidy scheme targeting up to three hundred buyers purchasing their first house. By means of the scheme, which will be launched shortly, the Government will subsidise an amount of the interest payable on the bank loan obtained for the purpose of financing the purchase of one’s residence; in particular, the subsidy will be of 2.5% on the first €80,000 borrowed. As a result, each applicant will be able to save a maximum of €14,500 when acquiring their first home. In order to be eligible, the bank loan in question must not exceed €150,000 in total, including allowance for furnishings.
In general, the subsidy is granted over the first eight years during which the loan is being paid off, while it is granted throughout the first ten years to the following applicants: those suffering from a disability, or who were placed in foster care, or who lived for a time in an orphanage, a residence for children, or a shelter.
Applicants must be at least eighteen years of age. Applicants should note that they cannot benefit from the scheme unless they are buying their first residence, and have signed the promise of sale agreement (‘konvenju’) no more than six months before the date of submission of their application.
There are also some requirements regarding the income and assets pertaining to beneficiaries. To qualify for the scheme, engaged or married couples, and persons who are separated or divorced and who live together with their children must have an income of no more that €40,000 per year, and assets amounting to a maximum of €40,000. Meanwhile, single persons and separated, divorced or widowed individuals who do not share a home with their children (if any), should be making €25,000 or less annually and their total assets should not exceed €25,000, in order for them to benefit.
The scheme, which is by no means the first of its kind, will be administered by the Housing Authority. It will be open for one year, or until such time as three hundred applications are submitted. Beneficiaries of the scheme will be obliged to live in the residence in question for at least ten years.
This information has been provided merely for information purposes and does not constitute legal or specialist advice. Should more information be sought it is recommended to contact Valletta Legal.
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