The Cypriot government on Wednesday approved a new program to subsidize interest rates on home loans, aimed at combating the effects of high interest rates and inflationary pressures. The move is part of the authorities’ efforts to support citizens facing high financial burdens due to economic instability.
Conditions for participation in the subsidy program
According to the decision of the Cabinet of Ministers, those who took out a housing loan between January 1, 2022 and December 31, 2023 can participate in the program. The loan must be issued for the purchase or construction of primary real estate, including a land plot, and must not be intended to refinance an existing loan.
In addition, those who have a loan with a variable interest rate and the loan amount must not exceed €400,000 can participate in the program. There is also a limit on the annual family income, which cannot exceed €50,000.
Applicants are required to pay all their income taxes .
Application process and subsidy amount
Applications for participation in the program can be submitted to Citizen Service Centers from January 2, 2025 for two months. The subsidy will cover 50% of the difference between the total interest rate on the loan for the reporting period and the interest rate that was set at the time the loan was issued. The maximum subsidy amount will be two percentage points (200 basis points) and will be valid for two years from the date of the first payment on the loan.
The state budget for 2025, 2026 and 2027 provides the following funds for the implementation of the subsidy program: €12 million in 2025, €11 million in 2026 and €10 million in 2027. Kostantin Letimbiotis noted that the European Commission approved this initiative because it does not require state support.
