Why doesn't the Government use the tax system instead of giving Grants and other schemes to encourage young people to save for their first home.

timesofmalta.com is inviting readers to submit their questions on the Budget. They will be forwarded to the Ministry of Finance for its replies. Questions may be submitted through this section or on budget@timesofmalta.com

A number of questions have already been forwarded to the ministry. The following is the first reply

Question from Joe Xuereb

Why doesn't the Government use the tax system instead of giving Grants and other schemes to encourage young people to save for their first home.

Reply -

The government It is important to note that in the last three years, the government has drastically reduced the income tax rates. These measures have left no less than €84 million in the pockets of those working, thus incentivising employment.

As a result of the last budget earners up to €11,900 were also exempt from paying tax. By leaving more money in the pockets of the people, the government is helping people to be able to spend more on goods and services and also in buying property. One needs to distinguish between tax incentives and other schemes that help young people to buy their first homes. In launching tailor made schemes the government would be able to directly address the needs of people.

In the last budgets a number of measures were also launched for this scope - like

(i) exemptions to widows or widowers from payment of stamp duty causa mortis on the part of the inheritance which is connected with their residential home;

(ii) Young engaged couples when purchasing their first properties will get a subsidy over 10 yrs - max 1% on the base rate on interest established by the Central Bank;

(iii) Reduction of stamp duty - once- only transfer of one property from the parents to their children for the purposes that such property be used for personal residence;

(iv) One also has to keep in mind the number of assistance in the form of apartments - (€1.2million) - Housing Authority will improve and extend its Equity Share Scheme for the purchase of 1st residence In this budget the government is proposing the construction of 80 apartments and 12 other maisonettes to serve as social accommodation. 200 apartments will also be constructed and will be rented, showing that this is a government that truly believes in solidarity.