The subsidy of up to 75% of the additional interest will not be automatic, at a variable interest rate (Euribor), in credits for the purchase, construction or renovation of owner-occupied and permanent homes up to 250 thousand euros, with an effort percentage equal to or more than 35%. Families must ask the bank for access to the support, according to a questions and answers document published Monday on the government’s website.
“The family submits, by physical or electronic means, the request for access to the premium to the relevant institution”, the same note states.
Afterwards, “the institutions will inform the borrower within 10 working days of receipt of the complete application whether it meets the eligibility conditions for the subsidy”. The support will be credited to the customer’s account in installments immediately after this notification and will have retroactive effect from 1 January 2023. This means that the bank will pay the interest subsidy in advance and will then be reimbursed by the State.
Per credit agreement, the maximum annual subsidy amount is 720.6 euros (1.5 times the Social Support Index – IAS, which is 480.43 euros).
The measure is in effect until 31 December 2023 and can be extended if justified. The Prime Minister, António Costa, had already indicated at the briefing of the Council of Ministers last week that he approved housing aid, that the measure “will remain in force until the end of the year and can be extended if by then , it is not if there is is a normalization of interest rates”.
Which income counts?
Borrowers with an annual net income up to the 6th rung of the IRS (up to 38,632 euros) are entitled to aid. However, the government is now clarifying that families who have exceeded that limit in their last tax return can also qualify, as long as they demonstrate a fall in annual income of more than 20% that puts them in that bracket.
“Families with income up to the 6th rung of the IRS are eligible or who, above the 6th rung on the last IRS filing, have an income drop of more than 20% of income that puts it at or below the 6th echelon “, according to the document released this Monday.
Since the delivery of the tax authorities on the income for 2022 takes place from 1 April to 30 June, only the returns for the income for 2021 will most likely be available when the measure takes effect. the income of families that have not yet been registered with the tax authorities.
These accounts will have to be held by credit institutions. As the finance minister Fernando Medina had argued, the explanatory memorandum states that the “aid will be operationalized directly by the banks”.
The exclusion clause remains in place and stipulates that borrowers must not have savings, i.e. movable assets, including deposits, financial instruments, capitalization insurance, PPRs or savings or treasury certificates, with a value greater than 29,786 euros (62 times the IAS).
Only contracts concluded before March 15 are eligible. In addition, the amount of the initially contracted debt must be equal to or less than EUR 250,000 and the installments must be paid.
interest subsidy
Families up to and including the sixth income bracket with an effort percentage of more than 35% in their housing period are eligible for the additional interest amount of up to 75%.
The subsidy depends on income. Thus, the annual net income to the limit determined by the fourth step of the IRS (up to 20,700 euros) is supported by 75%. Families in the fifth level (between 20,700 and 26,355 euros net) and in the sixth level (between 26,355 and 38,632 net annual euros) will be able to benefit from a subsidy of 50% of the additional amount of interest.
“The additional interest amount corresponds to the difference between the current index and the threshold of 3%; or, if it exceeds 3%, and only in the case of effort rates between 35% and 50%, it corresponds to the index at the time of taking out the credit plus three percentage points,” the government document said.
Some examples are given in the explanatory notes for a loan with a contracted debt of 140,000 euros over 30 years and a surcharge of 1%.
In the case of a family in the 3rd rank (with a net annual income between 11,284 and 15,992 euros), who pays 726 euros per month to the bank (178 euros capital + 548 euros interest), with an effort percentage of 52%, and a with an initial interest rate of 0.25%, which has meanwhile risen to 3.7%, the aid will amount to EUR 61 per month up to a maximum of EUR 720 per year.
For a household in the 6th level (between EUR 26,355 and EUR 38,632 net per year), with a monthly installment of EUR 795 (EUR 153 capital + EUR 642 interest), which corresponds to an effort rate of 38%, whose interest has risen from From 0% to 4.5%, the subsidy is 88 euros per month up to a maximum of 720 euros per year.
read more in Living Money
Source: DN
