Review compensation for young families buying a home: there will be more cases where the money will not have to be repaid

As of September 2018, young homeless families in the regions can claim between 15 and 30 percent. compensation up to the value of the mortgage loan, the law that defines the support has come into effect since then.

More than 3,000 young families have already benefited from this support as of July this year. Most (more than 80%) of subsidies to families were granted for the purchase of the first home, the remaining part – in cases of housing construction or its completion, reported the Ministry of Social Security and Labor.

However, it also happened that some families had to be reimbursed. The housing loans were repaid within 6 years of the first home purchase by 6 families who were also required to repay the subsidy.

“The main reasons for repaying loans and subsidies are the sale of properties, for example in cases of divorce,” explained the Ministry of Social Security and Labor (SADM).

Other families have problems if they want to move to bigger houses; current regulations do not allow it.

A young family that has been granted a subsidy for their first home in the region cannot freely dispose of the acquired property; currently, if home ownership is transferred to someone else during the first 10 years, the subsidy must be returned to the state budget.

The ministry estimates that this support could be provided to young families in a simpler and clearer way, it could dispense with excessive regulatory provisions, so it will propose amendments to the law in the fall.

What could change?

“In practice, there are situations where families want to change their purchased home economically within 5 years of its purchase to a larger one in order to meet the needs of the family, for example due to the increase of the family or the improvement of conditions for the disabled. In this case, in accordance with current legal regulations, the subsidy must be returned to the families ”, explains the problem of the Ministry of Social Affairs.

At present, the possibility of non-payment of the subsidy is provided only in cases where the family changes to a larger one only in the same municipality.

“Taking into account the issues that arise in practice with respect to the application of the Law on economic incentives for young families acquiring their first home, it is necessary to regulate more clearly the provisions of the Law on homes owned or owned by a family young people, determining the right to economic incentives and other aspects. Furthermore, considering the intensity of current changes in social and economic life, it is believed that legal regulation should create better conditions for families to adapt to economic and social change ” said the comment.

He shared the results: without support, only one in three families would have bought a house

In 2019, the provision of economic incentives to families was monitored, during which it was evaluated whether the support provided met the planned objectives.

“According to the survey results, the financial incentive helped young families to have their own first home. Most of the young families indicated that they would not have bought a home without an economic incentive (67%). As you know, the initial contribution for young people is the biggest problem in obtaining a mortgage loan, ”says SADM.

According to the ministry, incentives for families also contributed to the revitalization of the regions: 27 percent. the families indicated that they had moved to the region from another municipality. A significant part: 37 percent. – Now they work in the municipality where the house was purchased.

11 percent 6% of respondents indicated that the financial incentive encouraged them to stay in Lithuania. indicated that this led to having children.

According to the Ministry, the financial incentive is necessary and does not lose its relevance even now, to regenerate and strengthen the regions. The formation of young families in the regions and their integration into the regional labor market create preconditions to encourage entrepreneurs to increase investments and generate new jobs in the regions, ”says the Ministry of Social Affairs.

The support aims to help young families obtain their own housing, contribute to the recovery of the country’s regions, strengthen them, reduce socio-economic disparities between regions and promote balanced and sustainable development throughout the country.

Why doesn’t the incentive cover big cities?

“One of the main objectives of the law was to revitalize the regions and help young families to find housing in the regions. Families living in large cities, who are poor, have the opportunity to receive state support for the purchase of housing according to the Law of the Republic of Lithuania on Support for the Acquisition or Rental of Housing ”, the Ministry of Social Affairs is responsible.

The amounts of support would not change, this year 18 million were allocated for support. euros

The ministry does not intend to review the support amounts.

Currently, young families without children can expect the state to repay 15 percent of the first home mortgage loan.

Those families raising one child can already expect compensation of 20 percent, two children 25 percent, and young families with 3 or more children 30 percent of the loan amount.

As the family grows, an additional subsidy can be applied for to pay the additional accrued interest. However, at the time of application, the family must meet the definition of a young family, that is, spouses, registered partners, or a single parent must be under 36 years of age. If the family has three or more children, you can apply up to age 40.

The maximum amount of credit is limited, it cannot exceed 87 thousand euros. Up to 15 percent of a home loan can be made for land.

“The financial incentive (donation amounts) is considered adequate and the disbursement conditions are sufficiently clear and favorable,” the comment read.

2021 18 million for the financial incentive. euros from the state budget.

“Decision on the allocation of funds for the financing of this measure in 2022. not yet adopted. The scope of the financing will become clear after the Seimas approves the state budget for next year,” writes the Ministry of Social Affairs.

Who and where can you ask for help?

All young families raising one or more children are eligible for home loan support.

The supported credit must be for housing: purchase, construction, reconstruction of existing housing, part of the credit can be used to acquire land on which there is or is planning to build housing.

Only regional housing is supported; areas where support is available are valued at home prices.

The normative value of real estate in that area must be at least 65 percent lower compared to the centers of large cities, where the normative value of housing in apartment buildings is the highest. Therefore, the number of municipalities eligible for support may change from year to year.

The maximum value per square meter is determined by the Registry Center, based on the average values ​​of the real estate market reviewed annually.

In 2021, it is estimated that housing will be supported in areas where the average cost per square meter of housing is up to 667.8 euros.

This year, the city of Panevėžys, part of the city of Utena, was one of the supported areas. Families from Vilnius, Kaunas, Klaipėda and Šiauliai cannot make use of these compensations. Also, support is not available in Neringa, part of Palanga, Tauragė, Druskininkai, Birštonas, Trakai district areas, as well as in Vilnius districts, Kaunas district around cities. in some areas. Delfi has already written more about this.

Those wishing to receive the grant must have declared their place of residence in Lithuania or be included in the accounts of people who have not declared their place of residence. The allowance is available not only to Lithuanian citizens and their relatives, but also to EU citizens and other foreigners who have a long-term residence permit in the EU or have obtained asylum in Lithuania.

A family applying for a state subsidy for the first home cannot own or have owned the home owned, unless the usable area per home does not exceed 14 square meters or if the home depreciates by more than 60% , indicates the SADM explanation. .

Other families can also apply for state housing assistance. Families in which one of the parents has died is supported. The grants also go to individuals under the care of their parents under 36 and their families. Also for families raising three or more children or raising children in permanent custody (care). Disabled individuals or families with disabled individuals are also eligible.