Financial Services, Latvia, Legislation, Real Estate, Society

The Economics Ministry presented to the government a report about further functioning of the program under which families with children can receive state-guaranteed mortgage loans to buy housing.

According to current estimates, about EUR 1.5 million will be received from sale of temporary residence permits to investors from third countries, who have invested in real estate in Latvia, therefore the additional financing required to continue the first-time home buyer program this year is EUR 2.5 million.

The government instructed to the Economics Ministry to prepare the draft documents about allocating EUR 2.5 million to the program from the contingency funds and setting a ceiling of EUR 200,000 on the value of properties to be bought under the program.

The ruling coalition parties at the meeting agreed to continue the program and grant extra financing this year to keep the program alive.

Speaking to the press after the meeting of the ruling coalition parties, Prime Minister Maris Kucinskis (Greens/Farmers) said that the EUR 200,000 ceiling would be introduced because so far about 25 properties purchased under the program had value in excess of EUR 200,000 which suggests that some of the beneficiaries are people, who do not really need state support very much. By establishing the maximum limit on the value of the property eligible to state support, the government will be able to help more families who are the target audience of this housing program, he said.

The housing program for families with children is being financed from the proceeds from sale of temporary residence permits to investors from third countries but the number of investors seeking to obtain temporary residence permits in Latvia has been shrinking lately therefore the program is faced with a shortage of financing. The ruling coalition previously agreed that the program should continue but with some adjustments to its terms.