The Malta Independent 4 August 2020, Tuesday

Budget 2018: Housing - Second time buyers’ scheme launched

Tuesday, 10 October 2017, 08:29 Last update: about 4 years ago

Measures introduced earlier this year have been included in the budget, such as incentivising the public sector to contribute to social housing.

Reference was also made to the €50 million investment scheme the government embarked on earlier this year, which will see some 700 units for social housing generated.

“These are important initiatives, but we need to continue our work within this [social housing] sector.”

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Rent subsidies

Building on the previous year, when the rent subsidy was doubled and thresholds for eligibility were further widened, this year the government will again be widening the threshold for eligibility.

A special set of thresholds for the rent subsidy will be made applicable for those aged 65 and over. The Housing Authority will shortly publish the list of criteria for various sub-groups looking to benefit from the subsidy.

 

Scheme: Renting to help out

From 1 September this year, the scheme ‘Renting to help out’  (Nikru biex nassistu) will incentivise private homeowners to rent their home out to the Housing Authority, which will in turn place those properties on the social housing market for a period of ten years.

The scheme has already seen some 200 applications, the while government announced that homeowners may apply throughout 2018.

 

Scheme for unused private residences in disrepair

The Housing Authority will be offering a maximum of €25,000 to those who need financial help repairing their unused second properties. In return, the homeowner will be committing themselves to renting out the refurbished property to the Housing Authority for the purpose of social housing.

This scheme is applicable to the first 100 residents who apply for the financial assistance, while the property must be ready and in a state of habitation from when the go-ahead is given for financial help.

 

Vacant government properties rented to the elderly

Where elderly people living in a government property move to a home or a hospital, such as St Vincent de Paul (SVDP), the keys to the property generally remain in the hands of those elderly people – for a number of reasons.

When an elderly person moves to a state hospital or institution, 80 and 60 per cent (respectively) on income is deducted from their pensions as a form of payment for round-the-clock care.

Those elderly people who are willing to hand back the keys of their government properties to be managed by the Housing Authority for social housing will have 20 per cent less of their pension deducted. As such, an elderly person admitted to SVDP but giving up their government property will have 60 per cent taken from their pension, as opposed to 80. An elderly person stands to save between €1,350 to €2,700 per year in this way.

Those elderly persons already in a state institution or hospital will also be able to avail themselves of this scheme.

 

 

Social loans

The Housing Authority together with the Foundation for Wellbeing and Social Services (FSWS) entered into an arrangement with APS Bank so that social loans are granted to 100 prospective homeowners in need. This initiative has been a success and as such the government has now entered into a similar scheme with Bank of Valletta so that another 300 applicants will be able to make use of the scheme.

 

 

Installation of lifts in government and Housing Authority blocks

With EU funds, the government is well on track to refurbishing and installing lifts in many government housing blocks. The entire project includes 109 apartment blocks.

The project will cost €16 million, half of which will be paid for through EU funds.

The Housing Authority will, throughout the upcoming year, regenerate and maintain many government housing estates.

 

White Paper on affordable housing

A White Paper on the rental market, especially the provision of affordable rental homes for low-income individuals by the private sector, will be published.

The government has taken into consideration the majority of people who rent but do not qualify for social housing, and who are, however, finding it difficult  to find affordable housing, especially families on a single income.

With this in mind, the government will be releasing a White Paper with its own proposals for ensuring a higher degree of professionalism within the rental market, without introducing rent control or rent capping.

Some measures to be discussed are:

Obligatory registration of each rental contract, without which a landlord will not be protected by the law;

Contracts must regulate rent increases and how this will take place over the duration of the contract;

The contract must cover a reasonable minimum period of time, while retaining flexibility for the tourism market and short lets;

Implementing a deposit retention scheme to reduce rampant abuse where landlords keep deposits despite dwellings being left in good condition;

Lastly, revision of laws making it simpler and more efficient for landlords to take action against tenants who do not pay their rent or breach their contract.

 

First-time buyers

Stamp duty exemption of properties up to €150,000 for those purchasing their first home will be extended for a third year.

 

 

Second-time buyers

Those looking to upgrade their homes – for example, a flat with more bedrooms due to a family having more children – or those looking to downgrade their home if the children have moved out, for instance, will benefit from a stamp duty refund of up to €3,000.

Those eligible must not have any other property, but must be looking to replace their current residential home. Upgrades to luxury villas will not permit a homeowner to benefit from this scheme.

Those homeowners with disabilities wishing to avail themselves of this scheme can benefit from a stamp duty refund of up to €5,000. If you live with a disabled person, you may benefit from this scheme under certain criteria to be made public shortly.

Increased efficiency of Malta’s stock is hoped to be achieved through this measure.

 

 

Refurbishment schemes

To incentivise the public to purchase vacant properties in the centre of towns and villages, the government will continue its scheme of providing assistance in property refurbishment in Urban Conservation Areas (UCAs).

Vacant properties in UCAs – to encourage the use of vacant buildings in UCAs – the government is reducing the stamp duty on such properties in half, from five to 2.5 per cent.

 

Incentives to purchase properties in Gozo

The scheme where those buying a residential property in Gozo benefit from a reduction in stamp duty from five per cent to two per cent will be extended for another year.

 

 

Equity release

Malta will see its own Equity Release Facility Scheme aimed at pensioners but it could be introduced for older people, for example 55 and over. A homeowner looking to add to their monthly income, or a pensioner who is not getting by and who could use the extra income may enter into an agreement with a company whereby the value of that person’s home is established with the company making monthly payments or part-lump-sum-part-monthly instalments for the property.

 

 

 

In this way, an older person with an unforeseen expense or a pensioner needing the extra income may make use of the value of their property. The company would recoup its money once that person has passed away. Should any payments still be necessary after the homeowner passes away, this is then passed on to his/her heirs.

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