HEALTHPLAN MAGAZINE

The Spanish government has announced a new aid package to help young people and families secure a mortgage for their first home. The aid will be provided through Spain's Official Credit Institute (ICO), which will guarantee 20 percent of the mortgage for eligible applicants.

Spanish Prime Minister Pedro Sánchez (pictured) announced the creation of this new aid on May 7, stating that it was a response to the "housing emergency" in Spain. The measure aims to make it easier for young people and families to buy their first home, as they will only have to pay sales taxes, which typically cost around 10 percent of the property's price.

The new aid will be available for those under the age of 35 with an annual income of less than 37,800 euros gross, as well as families with children under their care who haven't previously purchased a property. The scheme will essentially allow those in need to receive up to 100 percent of the mortgage, which is helpful as many banks only offer up to 80 percent financing. The ICO loans and guarantees can be requested from any of the affiliated banking entities, and around 30 banks currently offer ICO loans and guarantees.

Sources from La Moncloa believe that this public endorsement "will help to avoid that insurmountable wall called 'entry' for so many young people and families with minors, who will finally be able to buy decent housing."

According to FotoCasa, one of Spain's largest online estate agents, six in ten young people in Spain between the ages of 18 and 34 have tried to buy a property without success. The Emancipation Observatory of the Spanish Youth Council (CJE) has also revealed that in Spain, 59.2 percent of young people rent, while only 17.4 percent own their own property and pay a mortgage. Data shows that most Spaniards are not able to buy their own property until they are 41 years old.

The Spanish Cabinet was set to approve the new aid package yesterday, May 9, and some details are still to be released. It is also not yet known when people can start applying for the benefit.

The main requisites for this aid include being under 35 years of age, having a suitable income and financial profile to apply for a mortgage, living in Spain, and purchasing a home that does not exceed the maximum price specified for this aid. Additionally, the home must be used for habitual residence, and it should be the applicant's first home.

The Spanish government's new housing policy is a hot topic, especially after the recent approval of the new Housing Law or Ley de Viviendas. The government aims to solve the problem of access to housing in Spain by increasing the number of subsidised homes. The goal is to make subsidised housing at least 20 percent of the total housing stock. Sánchez believes that the construction of subsidised housing will help young people and families who face difficulties when they go to a bank to get a mortgage and buy their own home.

The Spanish government plans to build 20,000 subsidised homes, with 300 of them to be constructed on land owned by the Ministry of Defence. The signing of this agreement was due to take place in Santa Cruz de Tenerife on May 9. Sánchez stressed that the government's priority is to put housing at the centre of its agenda. The new aid package is expected to help around 16.6 million people in Spain, providing them with an opportunity to secure a mortgage for their first home and make the dream of homeownership a reality.

Sources

https://www.thelocal.es/20230508/spains-govt-to-guarantee-20-percent-of-mortgages-for-young-people-and-families
https://elpais.com/espana/2023-05-07/el-gobierno-anuncia-un-aval-de-hasta-el-20-de-la-hipoteca-para-jovenes-y-familias-con-rentas-bajas-y-medias.html
https://www.mitma.gob.es/el-ministerio/sala-de-prensa/noticias/mar-09052023-1649