Work abroad, buy at home: Hungary’s new housing scheme opens doors to commuters

A government decree on the Home Start subsidised credit scheme for first-time home buyers will be published in the coming week, at the latest, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on Thursday.

Details of the government’s Home Start Programme will be posted on a dedicated home page, accessible through the government website kormany.hu, from the weekend, Gulyás said.

He said the government had decided, after social consultations, to extend eligibility for the Home Start Programme to Hungarians who live in Hungary but commute to work in neighbouring countries. The government also took a decision to cap bank fees for the credit at HUF 30,000, he added.

The scheme, to launch from September 1, will offer fixed 3pc home loans to Hungarians over 18 who have worked for two years and paid their social security contributions. Social security contributions paid in neighbouring countries for cross-border commuters will meet the requirement.

The loans, up to HUF 50m, may be used for new or resale homes, and small farms. Eligibility extends to borrowers who have not owned residential property for the previous ten years, owners of real estate with a value under 15 million forints and people whose ownership stake in a home does not exceed 50 percent, he noted.

The value of homes eligible for purchase in the scheme has been set at 100 million forints for homes in multi-dwelling units and 150 million for detached homes, Gulyás said. Relative to usable area, the price threshold is 1.5 million forints/sqm.

Meanwhile, Gulyás said a home allowance scheme announced by the prime minister late Wednesday was a show of appreciation for civil servants. He noted that teachers, police, soldiers, nurses, doctors and other civil servants would be eligible for the 1 million forint annual allowance to be taxed similar to vouchers.

He added that the allowance could be used to repay home loans or put toward down payments. The allowance may also be combined with the Home Start Programme for first-time home buyers, he said. The details of the home allowance will be decided at a cabinet meeting in the coming week, he added.

The allowance will be subject to the same tax preferences as non-wage benefits, he said. Gulyás also announced that the government will expand funding for a village shops support programme to match demand.

He said applications for more than 10 billion forints of support had been received, well over the 4 billion forints initially earmarked for the scheme. The government has decided to ensure the funding necessary for awards for all eligible applications, he added. A total of 3,527 applications have been submitted by 2,392 applicants in 1,966 settlements with populations under 5,000, he said. Applicants may apply for up to 3 million forints in grant money.