Government announces new scheme to help first-time buyers
A new scheme to assist first-time house buyers was announced this afternoon by the Social Policy Ministry.
The minister, John Dalli, said the scheme will be open to single or separated persons, single parents, married or unmarried couples, and couples with children. The scheme is divided into three categories with the maximum value of the properties ranging from €70,000 to €120,000.
In terms of the scheme, the government will pay up to 30% of monthly bank loan repayments for 10 years. This assistance would not have to be paid back by the applicants.
The minister said the new scheme, which will be formally launched in December, will replace the Equity Sharing Scheme, where assistance had to be repaid. (See Mr Dalli's brief explanation on video above)
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L agius
Nov 14th 2008, 14:51
....cont/ this means that the difference in price between a 2 bedroom and a 3 bedroom would now be of Lm15,000 !!!. If the government would subsidize the first Lm50,000, on a maximum of Lm60,000 , this would encourage first time buyers to invest / opt for a higher standard property, and would not create a situation where property between 50K and 60K would remain for a long time on the market...
L agius
Nov 14th 2008, 14:36
I agree with this initiative to help first time buyers, however , working in property myself, i can say that up to Lm50,000 one can only buy a small apartment , in most of the cases 2 bedroom, I suggest that the government should offer subsidy but put up his bracket to Lm60,000 in which a lot of 3 bedroom apartments fall in this price range. The government should offer the subsidy on the loan repayment on the first Lm50,000 and if people opt to buy a property up to Lm60,000 the extra Lm10,000 would not be subsidized . With the present scheme first time buyers that where considering buying a Lm 55,000, 3 bedroom apt, would reconsider their choice and opt for a Lm, 49,000 2 bedroom to fall under the scheme. reasons are simply mathematical e.g. LM51000 less 10% deposit = Lm45,900 (loan) at 4.875 % for 39 years = Lm217 per month , less 30 % grant = Lm152 per month (savings of Lm65 x 12 months x 10 years =Lm 7,800) . Lm55000 (no subsidy) = LM 236 per month - diff = LM10,000 over 10 years!!...cont/
V Farrugia
Oct 31st 2008, 08:53
Dear C Chircop, I can understand your concern, but sometimes people tend to bite off more than they can chew. You can buy what is called a starter home, then in a few years move upwards according to your requirements. A couple, still childless, doesn't need a 3 bedroom unit, with 2 bathrooms, when they will only use a single bedroom and a single bathroom for quite a few years; so it's easier to buy a smaller place, and then move into a larger one when the arrival of children demands more space.
Marc Anthony Azzopardi
Oct 31st 2008, 07:46
Yes in fact...
This proposal, while appearing generous at a first glance, is a bit restricting... In today's market, €120,000 (Lm51,000) will only buy you a rather substandard piece of property.
While recognizing that the government has financial limitations, it should not really put a cap on the value of the property... It should rather put the limit on the government's net contribution. (ie 30% of 120,000 = €40,000).
I might prefer to make a little more effort to get a reasonable €200,000 (small but decent) flat that is acceptable for the longer term and still benefit from some government help.
Anyone in his right senses will be planning to cater for his medium to long term needs and not just the immediate urgency for a place to dwell in.
Michael Neville Cassar
Oct 31st 2008, 05:30
Is this Why taxes are paid? What about those who have been struggling for years who also have children to buy a home (house) in this island the lazy and the more you are a drifter the better deal you get .To whom it may concern, you make my blood boil.
M. Attard
Oct 30th 2008, 22:02
This is meant to help persons who would like or need to have their own home but cannot afford prices. If you afford to buy a property at Lm80,000 well... I guess you are almost there without any help!! Evryone wants the best but financial some like a single parent like me has a limit and a gentle assistance like this will improve todays "stagnar fil-propjeta ukoll" !! Imma kif dejjem xi hadd jrid jgorr ghal kull inizjattiva gdida li jkun hawn??!!
Karl Abela
Oct 30th 2008, 21:52
Us Maltese are a funny bunch of people. Such an initiative from the government to help the lower class should be applauded....but of course, all we love to do is grumble and moan especially the politically biased ones.
Or maybe we can evaluate it in another way.... most Maltese are so well off (and most are probably professionals) that no one is considering buying a property less than Lm51,000....excellent!!!
...and just in case anyone asks....yes you can still buy a decent apartment with Lm50,000, especially now that property prices are tumbling down.
Mark Piscopo
Oct 30th 2008, 21:37
Dear Dr Dalli,
Kindly note that currently with Eur70,000 you will buy a garage not an apartment.The new scheme will definitely not help the first time buyers because the properties ranging from €70,000 to €120,000 will not be decent for a couple.The maximum value must begin with 120,000. It is an excellent scheme but the maximum value must be revised.
Albert Farrugia
Oct 30th 2008, 21:26
@ C Chircop
Young professionals? Of course the scheme is not aimed at you. You earn good money and can afford to buy a house. Scheme such as this are meant for low income earners. The old mentality of everyone sucking from government's udders, irrespective of income, is still very much alive and kicking it seems.
John Borg
Oct 30th 2008, 21:08
@C Chircop
Mr Chircop, the schemes are intended for people with low income and not for the young professionals. Everyone in Malta wants to buy a villa as a first-time home.
People have to learn to go step by step. A flat is enough for first-time buyers and they upgrade as time goes by.
J. Theuma
Oct 30th 2008, 20:33
Dear Chirchop
Anyone who can afford that kind of money, should not be helped. This is aimed at people who cannot make up for payments for a small place called home not a luxury.
With your argument why not raise the ceiling to 150 Lm K ? For me to buy a terraced house instead ? Why make a difference between 80K and 150K ?
M Zahra
Oct 30th 2008, 20:15
At C Chircop
If you cannot afford an Lm80k house - buy an Lm50 one.
Why should Government support an extra kapricc?
You cannot buy a villa- but you do get decent 2-bedroom flats with 50 000...
l Galea
Oct 30th 2008, 20:15
That price bracket is what most couples go for.
Those who go for higher priced properties do not normally need support.
If the Government were to support prices up to Lm80,000, then the property prices will continue to increase artificially more than they are now.
G Sammut
Oct 30th 2008, 19:57
Why should we do that? Just so you can get something for free? Why would middle class earners need help at all? Isn't the logic behind government assistance to help lower income earners who cannot afford a decent standard through taxing higher income earners? If you afford above LM50K, then you shouldn't be helped, you should be taxed; so that those who cannot afford comparable properties outright will be able to get help to live decently, rather than slide into poverty. It's not a question of milking the cow, it's a question of redistributing capital.
Mark Busuttil
Oct 30th 2008, 19:36
I agree, it is quite upsetting that it doesn't apply to first time buyers who wish to purchase a property greater then Lm50k.
There are loads of couples who wish to purchase a decent living which could do with the Government’s help, at the end of the day we also do pay taxes!
Anyhow, I think this is a great initiative from the Government.
P.Schembri
Oct 30th 2008, 19:35
Is anybody out there noticing a pattern here? When there's bad news or something harsh such as introducing new taxes, or new tariffs for that matter, alongs comes a little cejca to avert our vision from the real thing. Just a spoonful of sugar and the medicine goes down...... Remember that song???
dgrech
Oct 30th 2008, 19:32
Giving tax money to first time buyers will only keep property prices over inflated - is this what the average person wants?
Daphne Caruana Galizia
Oct 30th 2008, 19:28
Apparently, you don't understand the meaning of social assistance. If you can afford a home of Lm80,000 on the understanding that one of less than Lm50,000 is not good enough for you, you shouldn't expect the state to help you buy it. The state isn't there to help you buy a home suitably aspirational for a middle-class professional. Middle-class professionals buy their own homes without help from the state.
Edward Fenech
Oct 30th 2008, 19:18
Super! Another subsidy for the building industry. If you want more affordable property then simply tax vacant property.
J Zammit
Oct 30th 2008, 19:09
@ Mr Chircop
Surely, as a professsional, you should be able to buy your own house unaided! Even if it means starting small and trading up as your income increases. Think of the wannabe home-buyers who have little prospect of salary progression because of the job they do.
Some people want it buttered on both sides!
Henrik Piski
Oct 30th 2008, 19:07
This means that the tax payer is going to part-finance the purchase of property for the first-time buyers. Instead of it, property tax should be introduced starting from the second owned property. These taxes should than be used to give tax incentives to owners willing to invest in energy saving measures for their property.
Duncan Muscat
Oct 30th 2008, 19:07
Its the same old story same tricks, and same strategy used by GonziPN/GattPn whatever! They always do this when they're struggling! The University Lecturers issue, The recent Methode Electronics issue the SHOCK you know! They're always hunting for votes!
D Delia
Oct 30th 2008, 19:02
I would rather have left the present stagnant market push down prices.
From what appears in the article above, this scheme will be helping developers indirectly by inducing buyers to reach the € 120,000, putting the buyer’s minds at rest that there is somebody paying for the extra mile.
Developers will keep firm on house asking prices still making the big profits. I am sure that they know how to use this scheme as a selling tool, working it out nicely for buyers that in actual fact the purchase price will be cheaper (as happened on energy saving appliances govt rebate).
....With all the money coming from the taxpayers.
Gavril Flores
Oct 30th 2008, 19:02
So families will get more loans from the banks. The banks will make necessary profit in time of recession and we'll continue to show the world how strong our financial services are. i think that ultimately families would have saved more with the old scheme.
@ Chircop - I think those who can afford a lm 80 000 home do not need the give them. I prefer the gov helping middle class through better through better state education & health or subsidized private education & health. As in both cases the gov is saving with middle class opting for private.
m borg
Oct 30th 2008, 19:00
I would have been more than pleased to see Hon John Dalli as prime minister rather that the present one.
The one we have must really think people are so stupid.
Cleaven Vella
Oct 30th 2008, 18:43
What about couples who have taken a home loan in the recent years? There are no help for these couples. Interest rates on home loans have been increasing, electricity & water tarrifs increasing, cost of living increasing, gas cylinder prices will increase. Is this what we were promised before the last general election? NO IT WAS THE OPPOSITE.
WAKE UP GOVT. A MESS IS HAPPENING.
phil press
Oct 30th 2008, 18:40
Will the scheme also assist, the first time buyers to pay their utility bills ?.
C Chircop
Oct 30th 2008, 18:24
This is limited for properties between Lm 30,000 and Lm 50,000 approximately.
Hence, for the middle class earners who aspire for properties > Lm 50,000 (you don't get anything decent in a decent area below that amount, especially as a couple), this is not valid!
Basically, I'm out of the question together with other young professionals out there!
Couldn't the ceiling be raised to € 185,000 (Lm 80,000)?