What does the new state support for rent and mortgage payments consist of?

Two new supports have been approved to help families meet their expenses related to the payment of rent or installments on their mortgages. This support will be a help for people who are in a more fragile situation considering the difficult times they are going through due to the rise in Euribor. It may not be an exorbitant amount of support, but it is worth remembering that any help is better than none.

Let’s look at each of these supports in more detail:

Rents

The criteria required to gain access are:

1. The household’s annual income cannot exceed the sixth income tax bracket – 38,632 euros gross per year. This gives about 2,400 euros net per month in the case of two adults (1,200 euros each);
2. The effort rate must be equal to or greater than 35% (divide the total amount of benefits by the household’s net income);
3. Contract entered into until March 15, 2023, registered with the Tax Authority (AT).

The monthly amount to receive is the difference between the 35% effort rate and the amount you are currently paying, up to a maximum of 200 euros and a minimum of 20 euros. The support has an expected term of 5 years. If the amount is less than 20 euros per month, the sum is paid every 6 months.

The support is paid by social security by bank transfer to the IBAN communicated in the respective direct social security area by the 20th of each month.

There is no necessary procedure to be done by the beneficiaries to obtain the support, being enough to fulfill the mentioned conditions to obtain the right to the support

Housing Credit

The support applies to credit agreements for the acquisition, construction, or renovation of permanent owner-occupied housing.

The criteria required to gain access are:

1. Have the conditions mentioned above for rent support;
2. Floating rate contract or, in the case of a mixed rate, is in a floating rate period;
3. Value of the contracted credit equal to or less than 250,000 euros;
4. The Euribor rate has to have risen by 3 % compared to the time the credit was contracted. If you contracted with the Euribor at 1% you will only be entitled if the Euribor reaches 4%, for example;
5. To have the installments duly settled.

Borrowers who hold financial assets that include, namely, deposits, financial instruments, capitalization insurance, or savings or treasury certificates, with a total value greater than 62 times the social support index (IAS) (currently 29,786.66 euros) are not eligible.

This support is not automatic like the previous one, so you will have to make the request to your bank (it can be in person or by digital means). You will need to attach your most recent IRS and financial wealth information to your application.

The bank will have 10 working days to respond and it will start to apply the following month retroactively to the month in 2023 when it entered the covered situation.

The amount you will receive will be the difference of whatever is above Euribor at 3% or above the maximum amount provided in the FINE you received when you made the contract. Up to the ceiling of the fourth bracket, with an annual income of 20,700 euros or less, you will receive 75% of the difference. If you have an annual income above the fourth bracket and equal to or below the sixth, you will receive only 50% of the difference. If your income is in the 7th income bracket of the IRS, you may be entitled to this support if you can prove that you had a 20% drop in income, falling under the ceiling of the 6th income bracket.

The maximum annual amount to be received, per credit agreement, is 720.65 euros (the equivalent of 60 euros per month). Banks communicate to their customers every month, via their bank statement, the amount allocated.

If you have any questions, please do not hesitate to contact us.