Despite the fact that Cyprus real estate prices are relatively low by European standards, many people here cannot afford their own house.
Let's talk about how the state supports the inhabitants of the island in the housing issue.
Government support programs allow you to adjust the population density and competently develop not the most popular areas. At the same time, the main task becomes the formation of full-fledged districts with developed infrastructure, and not closed ghettos.
Applications for participation are submitted to the district municipalities. The Council of Ministers makes a decision on each specific case. Unlike mortgage programs and installments, it is not required to return money to the state. The only thing that scares potential applicants away from such programs is a thick layer of frightening bureaucracy and the lack of a guarantee that the subsidy will be approved. Would you like to try it?
Most state support schemes have existed for years, but from time to time they are covered up, then updated and supplemented with new criteria for applicants, in accordance with the tasks set by the island government. Let's consider what is relevant for today.
State support programs for housing construction in mountainous and remote areas
In March 2022, the Minister of Internal Affairs of Cyprus Nikos Nouris announced a revision of the program for the development of remote and mountainous areas. The program budget has increased significantly (from 1.5 to 15 million euros), the criteria for applicants have been relaxed. Moreover, the scheme is planned to be further improved, taking into account the wishes of applicants and villagers participating in the project.
Young couples of Cyprus actively responded to the proposal to revive life in rural areas in 2021, but the issue of reviving rural lands remained open, so the program was extended for another year. Today, this popular scheme continues to gain momentum.
As you may know, the program to support construction in mountainous and remote areas started in March 2021. The government compensates up to 55 thousand euros. Agree, this is a very tangible support, given that the average price per square meter in villages does not exceed 500 euros, and the quality of life is sometimes higher than urban. There are more than 300 localities to choose from in the list. It is assumed that in this way the outflow of population from villages to cities will be reduced.
With the help of this support program, you can build or repair a house, buy new or secondary housing, as well as purchase housing for free (by inheritance).
The government does not pay compensation immediately. When obtaining a permit to purchase housing, an advance is paid first, and the rest of the money is paid after all the work is completed. The amount depends on the number of people in the family and the presence of children. Financial assistance is provided on the basis of a decision of the Council of Ministers.
Amounts of financial support for the purchase of housing in the mountain communities of Cyprus
It is noted that for people with disabilities, the subsidy increases by 10,000 euros for the installation of special equipment in the house.
In 2022, the Ministry of Internal Affairs decided to increase the income criteria of applicants for participation in the program of mountainous and disadvantaged areas to 10 thousand euros. For applicants wishing to settle in extremely mountainous and remote areas, the income criteria have been increased by 10 thousand euros.
The amount of maximum financial support in 2022 increased by 5 thousand euros in the program of mountainous and disadvantaged areas. In extremely mountainous and remote areas — for 15 thousand euros.
The second plan of this program concerns specific rural areas of Cyprus.
For families of four or more people, financial support is up to 20 thousand euros, and for one person and families of up to three people — up to 15 thousand euros. By the way, there are even villages near Limassol in the list of districts.
Applications will be accepted until December 31, 2022.
Housing schemes for people with refugee status (displaced persons)
The program is long-standing, mainly aimed at the Greek Cypriots who suffered during the 1974 military coup, but not only.
An application for one-time financial assistance for the purchase of a first home can be submitted by people who have a refugee certificate or have a certificate of the Victims Assistance Committee (επιτροπή ανακουφίσεως ΠαθόΝτων) who permanently reside in Cyprus. At the same time, the plot of land for the future house may belong to the applicant or his family members. The total area of housing should not exceed 250 m2. In addition, there should not be a swimming pool on the site.
The purchase of housing on the basis of a purchase and sale agreement registered with the Land Department is considered valid. It can be a new building under construction, a ready-made new house or secondary housing.
Full compensation for the cost can be obtained if the application is submitted no later than the first year after the purchase of housing. During the second year, the compensation will be 50%. After two years, no help is expected. At the same time, assistance is paid only if the housing is fully ready to move in. That is, it is required that in case of acquisition of a new building, the house will be completed within two years. You can extend it to a maximum of three years if the application was submitted earlier, in the first two years, but the house is not ready yet for some serious reasons.
The exception is the residential facilities of the Cyprus Organization for the Development of Land Resources (κυπριακός Οργανισμός αναπτύξεως γης (Κ.O.Α.Γ or KOAG). In this case, the terms may be extended.
Financial assistance for houses under construction is paid in two equal parts. The first part is when signing the contract after providing all the necessary information and an act prepared by the house's construction engineer that work on the building frame has been completed.
Financial assistance for ready-made houses is paid in a lump sum.
Income criteria for housing plans
The criteria are determined depending on the composition of the family and the total income of the family, taking into account the availability of sufficient funds for the purchase of housing. In 2019, the government increased the lower income level of people claiming compensation. At the same time, we decided to exclude applications for houses with swimming pools on the site from the program.
Housing program for middle-income individuals from Cyprus Land Development Corporation
According to the existing legislation, the Cyprus Land Development Organization (KOAG) allocates part of the plots for the construction of houses and apartments at relatively low prices for people who find it difficult to solve the housing issue.
These sites are mainly located in rural areas. Young couples are a priority. Assistance is provided depending on the composition of the family and total income.
Citizens of Cyprus, EU citizens and anyone who has legally and continuously lived in Cyprus for five years can use the support program. The amount of the subsidy depends on the composition of the family. Criteria such as movable and immovable property of applicants are also taken into account.
On June 8, 2022, the Council of Ministers of Cyprus approved new income criteria for applicants to participate in the Program for people with moderate income. The revision is based on the income criteria currently in force under the housing Program for refugees and rehabilitated persons (displaced persons).
This means that the level of maximum income of single applicants and families with three and four children has been increased, but the size of the permissible income level for families with five and six children has been significantly reduced. At the same time, the Council of Ministers declares that the number of beneficiaries of this social support plan has been increased.
In 2012, the Organization for the Development of Land Resources updated its rules. If necessary, budget housing can be sold to persons who do not have significant assets (up to 500 thousand euros) and are buying their first home.
The organization states that despite the reduced prices, the construction of housing is controlled by scientific and technical personnel who guarantee quality. The average market price of such apartments, excluding subsidies, is 170 thousand euros.
How to pay for housing from Κ.O.Α.Γ
First of all, the buyer pays 15-25% of the price as a deposit. Further, after completion of construction, you can pay the remaining amount or apply for a long-term loan of up to 75% through the Housing Finance Corporation (HFC) at subsidized interest. If desired, you can apply for a housing loan in any other organization.
Have you decided to buy an apartment or a house in Cyprus? Contact DOM! The website offers a huge selection of real estate —residential and commercial. Experienced agency specialists will be happy to help you make the right choice.
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