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Greek gvt’s affordable housing plan: Interest-free loans and subsidies to young people

Featured Greek gvt’s affordable housing plan: Interest-free loans and subsidies to young people

The Greek government will proceed to a strategic plan with multi-level actions in order to provide affordable housing to Greek citizens. The main objective of the plan is to ensure that government support reaches the beneficiaries directly, so that it can bear fruit as soon as possible.

According to information, the housing plan the Greek Prime Minister, Mr Kyriakos Mitsotakis, will announce from the Thessaloniki International Fair will include interest-free loans and subsidies that will provide a solution to the major problem of expensive rents that households and especially young couples have to face.

The implementation of the plan should start next year and the Greek government will use the 1.5 billion euro reserve of the Public Employment Service (formerly the OAED). The task force, which has been set up in collaboration with officials at the highest level of government, have elaborated various proposals to implement policies aimed at improving accessibility to cheaper properties.

The upcoming announcements will target low and middle-income young people, unemployed and students who are paying rent. It is reported that beneficiaries will be young people up to 29 years old and young couples, and there will be income criteria.

The conditions for providing support to beneficiaries will be more favourable when it concerns a couple where both are working, and there will be even more favourable provisions for special categories such as an unemployed couple or a single-parent family.

The plan also includes construction, reconstruction and concession-rental of social housing with PPP, rent subsidy and loan subsidy for the acquisition of a first home.

Renovations of old properties
According to the information available so far, owners or tenants will receive money, in order to renovate old properties which cannot be occupied, or they will receive rent subsidies. In the proposals that have been worked out by the relevant officials, these subsidies are to take a dual form. That is, they will either be granted as a state subsidy or as interest-free loans of 25,000-30,000 euros, with an increase of about 5,000 euros for each dependent member. The repayment period can be up to 10-15 years. In addition, the beneficiaries of the housing allowance will be young people under 30 and young couples, while income criteria will be provided.

Based also on the model which is being implemented in some foreign countries, the scheme is intended to give the opportunity to buy a home to workers who cannot pay the full amount required to buy a house or even have no access to bank loans. As regards the rent, the general framework is to pay the rent agreed with the Manpower Unemployment Organization (OAED), while retaining the possibility to buy the property they rent at a predetermined time and at a preferential price by taking an interest-free loan. The time so that the tenant can buy the property is determined on the basis of the agreement made with the Organization.

State properties
Thus, the Greek government’s housing plan includes the leasing of properties, their reconstruction at the expense of the tenant, the possibility of purchasing properties from the Public Employment Service, and the partnership with public and private entities in order to construct new ones. According to the plan 200 plots of land, 100 buildings and 100 vacant shops owned by the former Manpower Unemployment Organization, will be given to beneficiaries. The new housing policy package reportedly includes the possibility of the Agency to:

  • lease its land for housing development through PPP schemes with private parties
  • purchase suitable land within which to develop properties
    provide houses to unemployed people or young people at low rents, so that in a few years, pursuant to specific conditions, the houses can be transferred to the tenant on a “rent to own” basis, or
  • move to a rent subsidy or
  • move to a mortgage interest rate subsidy, or
  • subsidize the purchase of a first home; and
  • renovate the existing buildings to make them available to employees.