The Question of the Month
Because when I wonder, it’s worth… asking!
Through this column of the Synergy Real Estate monthly magazine, answers are provided to various questions related to properties and the real estate market in Cyprus.
Our company’s Sales Manager, Panayiotis Tofas, gives an answer to the question posed to him this month, which follows:
“What housing subsidy schemes are currently in force or will be implemented soon, what do they entail, and how could a real estate agency be useful to potential applicants?”
A few months ago, the Ministry of Interior announced its new housing policy, including several pre-existing schemes, which, as it appears, will continue this year, along with some new initiatives.
Among the announced plans are:
- Providing a free building coefficient of up to 45% for those undertaking construction
- Offering financial or other assistance to citizens wishing to buy or rent affordable housing
- Incentives for the maintenance of vacant or out-of-market buildings to increase supply in an effort to control or reduce rental prices
- Land allocation plan to families based on income criteria
- Production plan for affordable housing units by the Cyprus Land Development Corporation.
Subsequently, in this column, we will focus on two plans targeting a significant percentage of citizens who aspire to own their homes, and whose applications are expected to commence in the coming months.
One of these state-subsidized plans is the “Rural, Mountainous, Remote and Disadvantaged Housing Rehabilitation Plan“,which will continue this year with the same terms and provisions as in previous years as it looks.
In recent years, with the rise in construction costs and a sudden increase in interest rates, more and more citizens are turning to buying homes outside urban areas, and this specific funding scheme provides an additional incentive. It covers a total of 277 communities/areas defined as border, mountainous, and disadvantaged based on specific criteria. The subsidy amounts to 50% of the total cost for home acquisition, with a minimum expenditure limit of €20,000. The maximum subsidy limit of 50% of the total cost depends on the community/area where the property is acquired, family composition, and annual gross family income, including 13th salaries and any other allowances received.
The categories based on the maximum subsidy amount are:
- Up to €35,000 for a single individual
- Up to €45,000 for a couple
- Up to €60,000 for a young couple where neither member has reached the age of 41 at the time of application
- Up to €50,000 for a family with children
- Up to €65,000 for a young age family with children
- Up to €70,000 for families with many children
- Up to €10,000 for individuals with disabilities for construction
- Up to €25,000 (depending on the region) for special constructions for safety and adequate support of the residence due to terrain morphology or slope.
The second funding scheme we’d like to highlight is the new “Housing Subsidy Plan for Young Couples and/or Individuals up to 41 Years Old”, aiming to provide one-time financial assistance to young couples and/or individuals up to 41 years old, enhancing their purchasing power and access to housing.
The total budget for the plan is €15 million, with 200 eligible couples and/or individuals annually, based on the conditions described below. The income categories covered are:
- Single individual: Annual total income up to €25,000
- Couple (two-person family) or single-parent family: Annual total income up to €45,000
- Families consisting of three, four, and five members, with annual incomes not exceeding €50,000, €55,000, and €65,000, respectively.
According to the provisions, young couples up to 41 years old receive a one-time grant of €20,000, while young single individuals can receive up to €45,000. On the other hand, a couple with one or more children can receive up to €50,000 for purchasing a primary residence in municipal areas.
It is crucial to emphasize that eligible individuals are those who have not owned a property in the last five years. The acquired property through the plan cannot have any use other than residence, and the specific residence must not exceed 85 sq.m.
A real estate agency can assist potential applicants by providing information about available housing subsidy programs and the required procedures. It can also assist in the search for a suitable property that meets the program’s requirements and offer advice on the purchasing process using housing subsidies, as well as helping with application submissions and completing all required documents, saving time and effort for the client.
