A Home Deposit Scheme has been launched through a joint agreement between the Social Accommodation Ministry, Finance Ministry and local banks wherein first time home buyers will be able to apply for a 10% loan on their deposit.
This was revealed during a press conference on Wednesday morning by Social Accommodation Minister Roderick Galdes and Finance Minister Edwin Scicluna.
"This scheme is directed towards those young adults who are finishing their studies or have started their first job and want to start looking for home but do not have enough financial flexibility to allow them to do so, even though they have some kind of income coming in," Glades said.
Applicants will receive a 10% loan on their home deposit and they will be given 25 years to pay it back. The government is putting a tax guarantee on the amount loaned with the local bank that the applicant is working with. This scheme applies for loans that do not exceed €175,000 and BOV and APS are the main financial stakeholders of this scheme.
Glades explained that this scheme is not trying to encourage social dependency as it is a loan not a simple hand-out of funds.
On the contrary, the government is encouraging people to keep save up as quickly as possible since if the applicant pays the amount back by 5 years they will have a 5% discount form the amount provided while if they pay it back within 5 to 10 years, they will get a 2% discount, he said.
The scheme applies to people between 21 to 39 years of age. Single people between 21 to 30 years of age must have a total annual income of €19,000 to €25,000 while those between 31 to 39 years old must have an annual income of €25,000 to €35,000. Couples within this age range that apply for the scheme together must have an income of €19,000 to €35,000.
"It is the state's duty to keep our youngsters hopeful of the future, as their future is our country's future. If the state doesn't provide this security who will?" Glades asked.
Finance Minister Scicluna said that this was not an easy scheme to put in place due to the risks it poses with regards to its regulation and agreements with local banks.
"No government or social partner can overlook the issue of housing as it forms a large part of a family's consumption; 25-30% depending on their circumstances," he said while emphasising that this scheme is aimed to provide some liquidity between banks and loaners so that they do not lose the opportunity to buy their first home.
Applications will be accepted from tomorrow and Galdes said that the ministry is already anticipation 300 applications.
Anyone interested can contact the ministry by making a call on 2991120 or 70646064.