(source: SME)
The housing construction savings was the first state-supported scheme helping Slovaks either to improve their housing or acquire their own after the fall of the communist regime. Now, with the Slovak housing loan market fully developed, offering potential clients several paths to their own housing, the government has revamped it. The goal is to make it more targeted and effective. The new rules will be effective from the beginning of 2019.
“After years of its existence, the government has the right to say something about it,” said Finance Minister Peter Kažimír as cited by the TASR newswire, adding that the state pays tens of millions of euros from state coffers to savers within this scheme. “Now it is up to those who provide this service [i.e. three specialized banks] to adjust this product and make it attractive in 2019 as well.”
Under the current housing construction saving scheme, savers can sign a contract with any of three specialised banks. They firstly save for six years when the state provides them with an annual premium in case their annual savings are high enough. After this period, they are entitled to a soft loan. In case they do not want to wait six years, they can take a commercial interim loan. Those savers, who do not want to take a loan after the six-year period, can walk away from the bank with the saved money, premiums and interest rates and use them for any purposes.
Under the new rules, the savers will be obliged to use saved money for construction purposes only. Otherwise they will have to return the premiums.
Also, only those savers whose income does not exceed the 1.3 times the average wage will be entitled for the state premium. The saver will not receive the premium when taking and re-paying an interim loan.
The revision further halves the state premium from the original 5 percent to 2.5 percent of the annual savings. This means that the saver will need to deposit double the sum to get the full premium. The maximum premium was increased moderately from current he €66.39 to €70.
The premium will be paid out proportionally during the first year of savings. This means that when a saver deposits money only in the second half of the year, he or she will be entitled only to one half the premium at the most.
The government gave up its plan to exclude children from receiving the state premiums.
