The State Agency for Legal Transactions and Real Estate Brokerage (APN) yesterday announced the start of a new round of housing loan subsidies and will receive applications from September 28th. They stated that he would consider the requests in the order of receiving the complete requests, which means - who would be his girlfriend first.
Those who count on state subsidies already know that so far they have had to collect all the documentation to apply for the tender, and it is quite extensive. In fact, applications are submitted by banks where customers take out a loan and which have de facto approved loans to their clients. We wrote earlier that 14 banks were involved in the process, offering effective interest rates of 2.12 to 3.50 percent, which are historically low interest rates. Namely, according to the data of the Croatian Banking Association, the current interest rates on commercial housing loans are on average around three percent, so the loans offered through APN are slightly cheaper because of the interest rates.
By the way, more than 13,000 customers have used these subsidies so far. In the last round of the tender, which was in the spring, interest rates were slightly higher - from 2.19 to 3.70 percent. The Ministry of Construction revealed that more than 1,750 children have been born in families that have already used the incentives. The subsidy can be requested by anyone under the age of 45, and the condition is that they do not own real estate, ie an apartment or a house. Part of the price will be subsidized up to a maximum of 1,500 euros per square meter, or up to a maximum of 100,000 euros in loans. This means that someone can also buy a property whose square meter is more expensive, but only a part of the price up to 1500 euros per square meter will be subsidized. Also, the loan repayment period must not be shorter than 15 years. Subsidies last for the first five years of repayment. If a child is born or a family is adopted in the meantime, the subsidies are extended for an additional two years per child. This was made possible by amendments to the accompanying laws, and this extension can also be requested by those who received subsidies even before the legal changes passed in June 2019. Such people can request an extension of the subsidy for one year per child.
Subsidies up to 51 percent
In an earlier conversation with real estate agencies, we learned that subsidies, when added up, also cover 16 percent of the current property price. And if the subsidy is extended for a child by two years, then it also covers a quarter of the price of the property. But this is just a rough calculation. The largest subsidies can be received by those who intend to buy an apartment or house or build a house in the least developed areas, while 30 percent of the monthly loan installment goes to those who decide to buy or build real estate in urban centers such as Zagreb. The property to be purchased must have all the "papers", ie it must have a use permit. The APN website also states that subsidies can be obtained for the reconstruction of a house, for which a building permit is attached, but for works that would be less demanding and would not require obtaining a building permit, no subsidy can be obtained. Also, a subsidy can be obtained for construction that has already begun. It is good to know that buyers must register their residence at the address of that property within 30 days of becoming the owner.
HUB: INTEREST WILL STILL FALL WITH EURO
The Croatian Banking Association says that data from July show that the epidemic and recession have not reduced lending activity. Moreover, the placement of housing loans in July was as much as 8.8 percent higher than in July 2019. HUB estimates that the period of low interest rates will continue, and with the entry into the eurozone that they will fall further.
PENALTIES WHEN THE PROPERTY IS SOLD
If someone decides to sell the property for which he receives a state subsidy, he can, but then the loan will be considered due in full and the owner will have to repay all the subsidy he received. Only two years after the end of the subsidy, such real estate can be sold without a "penalty".