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Date Published: 14/02/2024

Spain approves new mortgage guarantees for under-35s

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The aid will help around 50,000 young people in Spain purchase their first home

Spain approves new mortgage guarantees for under-35s

This week, the Spanish government has approved a line of public guarantees for young people aged 35 and under, as well as families with dependent minors, to assist them in purchasing a home. This initiative aims to support younger families who desire to own a home but struggle to save enough for the down payment on a mortgage. The government has allocated 2.5 billion euros for this purpose through the Official Credit Institute (ICO).

"Today we take one more step, we fill one more layer of concrete to consolidate housing as the fifth pillar of the welfare state," said the Minister of Housing, Isabel Rodríguez, in the press conference held after the Council of Ministers.

The public guarantees to cover up to 20% of the home's price (up to 25% if the property has an energy rating of D or higher) and can be applied for the purchase of a first residence that serves as the buyer's primary and permanent home.

To be eligible for these guarantees, applicants must be over 18 years old, and their annual income must not exceed 37,800 euros per person (4.5 times the IPREM). For couples or families with dependents, the income limit will be adjusted accordingly. Additionally, the threshold increases by 0.3 times the IPREM (2,520 euros gross per year) for each dependent minor, and single-parent families can benefit from an extra 70% increase in the limit.

The government expects this initiative to benefit around 50,000 people. To access the guarantees, applicants must submit their request through the ICO website. The minister emphasised that the state will act as the guarantor for these loans, providing assistance to those who need it most.

In addition, new home buyers must not have assets worth more than 100,000 euros and must have resided in Spain, uninterrupted, for a period of two years or more. And given that the objective of the programme is to help young people purchase their first home, the aid won’t be available to anyone who already owns property, unless they can prove they don’t have access to the house through separation, divorce or any other cause beyond their control.

"The ultimate objective of the ministry is that to access decent housing, no Spaniard has to dedicate more than 30% of their income," the minister stressed.

The period for the return of state guarantees will be ten years, during which time the home must be maintained as a habitual residence – it can only be rented in the event of a move due to marriage, separation or job transfer. The new aid can be requested until December 31, 2025, although there is the possibility of this being extended for two more years.

In addition to the agreement signed on Tuesday February 13, the Ministry of Housing is also in the process of finalising a separate agreement with the ICO for the construction of 40,000 homes through loans to public and private developers. This initiative was approved by the government at the end of 2023 and is expected to be launched before the end of February.

In other news: 5 ways to save thousands on your 2024 Spanish personal Income Tax return

Image: Freepik

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