EC approves interest subsidy scheme for housing loans

In a significant development, the European Commission's DG Competition has approved an interest subsidy scheme aimed at housing loans in Cyprus. The scheme, applicable to loans concluded between January 1, 2022, and December 31, 2023, specifically targets the purchase or construction of primary residences for families with an annual income of €50,000, as revealed by Government Spokesperson Konstantinos Letymbiotis in a press briefing at the Presidential Palace on Tuesday.

Letymbiotis highlighted that the DG Competition's decision signifies the absence of any element of state aid within the scheme. This applies to both the credit institutions participating and the ultimate beneficiaries, making it eligible for implementation.

At the core of the government's policies, Letymbiotis emphasized the scheme's role as a "targeted, substantial measure to support households." The estimated annual fiscal cost of the scheme is €20 million, extending over 2 years. The subsidy itself covers 50% of the interest rate increase between the loan agreement date and the subsidy payment date, capped at a maximum of 2 percentage points.

The spokesperson outlined the eligibility criteria, specifying that households with an annual family income of up to €50,000 qualify. To benefit from the subsidy, they must have obtained a housing loan of up to €400,000 during the period from January 1, 2022, to December 31, 2023, with the additional condition that the loan remains in good standing.

[Information sourced from CNA]