The government, together with APS Bank, have launched a new scheme in order to aid persons over the age of 40 in becoming homeowners.
The Equity Sharing Scheme is a proposed measure from the 2019 budget which aims to provide affordable housing for those applicants who have a limited amount of assets and are unable to secure a bank loan. The scheme helps applicants over the age of 40 by funding up to half of the purchase price of a property to be repaid after 20 years.
For this scheme to apply, the eligible applicants must be able to purchase at least 50% of the property and have the other part paid by the Housing Authority. After 20 years, the applicants are required to purchase the share from the Housing Authority at the same price paid at the time of purchase.
Subject to all the bank’s criteria being satisfied, APS bank will provide applicants with a maximum loan of up to €160,000 for a finished and habitable property or €200,000 for a property in shell form to be made habitable. The Housing Authority is then able to finance between €20,000 and €100,000 for properties not exceeding a value of €200,000.
Following this, the property may then be inherited by the applicants’ children or heirs who are then able to purchase the share from the Housing Authority directly. However, if after 20 years applicants are unable to pay back the Housing Authority, the share of the property will remain the government’s but be transformed into a “social rent” payable to the state. This rent will then be commensurate with the investment and the return expected by the government but still remaining affordable.
Prime Minister, Joseph Muscat, said, “The scheme is not a silver bullet, as no such thing exists in this area and there is no measure which will address all the issue. It is, however, one of a series of policies which target different realities in our economy and society.” Acting as part of a holistic strategy, the scheme will provide housing to those who are not able to qualify for subsidies due to sufficient means.
The Equity Sharing Scheme is especially targeted, but not limited to, separated or divorced couples who, following selling their previous home, may not have sufficient funds to purchase a new property. Parliamentary Secretary, Roderick Galdes, focused on this and stated that this scheme gives these individuals a choice other than renting a property.
In order to apply for the Equity Sharing Scheme, the following conditions must be met:
- The property in question must be built in accordance with building regulations and planning permits;
- Applicants have to be able to finance at least 10% of the property’s price from their personal assets;
- Applicants are able to purchase the investment made by the Housing Authority before the end of the 20 year period.
To be eligible for the Equity Sharing Scheme, applicants should match the following criteria:
- In the case of married couples, or those in a civil union, one person must be at least 40 years old on the date of application;
- Single persons with unmarried children and single individuals must also be over the age of 40;
- In the case of two persons applying jointly, one must be over 40 years old;
- Legally separated persons without children living with them must also be over the age of 40;
- Applicants must be Maltese citizens or citizens of the European Union;
- EU citizens must acquire their first residence and satisfy the criteria issued by any Authority and/or by the Office of the Prime Minister;
- In the case of married couples, or those in a civil union, one person must be a Maltese citizen;
- Applicants should not have an annual aggregate income exceeding €40,000.
To collect applications for the Equity Sharing Scheme, visit the Housing Authority offices in Floriana, Malta and Victoria, Gozo. They may also be downloaded from housingauthority.gov.mt.
Feel free to contact us at Island Properties for more information. We provide clients with a wide range of properties that match all the above criteria.