Housing | Government to assist over-40s to buy homes

The government will help over-40s buy homes by entering as a partner for mortgages

The mandatory registration of rental contracts is a policy objective of this year’s Budget.

Last year the government doubled the number of people qualifying for a rental subsidy and doubled the subsidy that was paid, upon registration of the rental contract. In reality, it did not leave an effect or affected a small segment of society.

The problem to be targeted is mainly related to people who cannot buy property because they have been priced out of the real estate market.

In some cases that were identified, men and women over 40 years of age have encountered problems accessing banking finance for a home loan. The problem affects people who are on permanent rental contracts, those whose salaries are not high enough to sustain loan repayments, or even those who have encountered a ‘life-changing situation’ that now prevents them from accessing banking finance, such as separated or divorced couples. These people don’t qualify for subsidies that are usually granted for social cases or low-income earners.

This housing programme will be aimed at particular people, such as couples who have separated and sold a house they bought together but which income will not give them enough to individually buy their own house.

To be eligible applicants will have to be 45 years or older, and must be buying a primary residence. An agreement has already been signed with APS Bank which will allow the person to buy half the property through a mortgage, while government pays the other half together with interest.

At the end of 20 years, the person will have a right to buy the second half from the government at an agreed-upon price. If they can’t afford it, they can rent it. At the end of the process, once they die or the property is inherited by their children, they can choose to buy it from the government. If they choose not to, government will buy the other half itself and use the property for social housing.

Other incentives

Government will be scrapping the means-testing on the rental subsidy, which will be replaced by benchmarks, the criteria of which will be explained in the coming months.

The subsidy for single people will be increased from €1,600 to €3,600. Families with kids will see their subsidy increase from €2,000 to €5,000.

Other incentives will be launched for landlords who agree on a tenancy agreement of five years at minimum, in agreement with a government authority, to fix a rental rate that is less than the market price, with an agreed rate of annual increments, in return for a cheaper capital gains tax for landlords should they wish to sell the property after it returns in their hands, possibly less than the lowest 8% tax rate.

Another 1,200 units that have been described as dilapidated properties have been identified and will be used for social accommodation. Government will also be entering into a private social partnership with a number of NGOs for properties that have to be regenerated.