Subsidisation of housing loans

Subsidization of housing loans is a measure of assistance that provides subsidies to young people to pay part of a housing loan for the first five years of loan repayment. The measure has been implemented since 2017, i.e., calls were implemented in 2017, 2018, 2019 and 2020. Applications under the last call were received from 30 March to 30 April 2020 and 3,681 applications for loan subsidy were received.

Currently, the Agency for Real Estate Mediation and Transactions is processing the received applications.

Also this year the call was open for citizens with permanent residence in the territory of the Republic of Croatia who meet the conditions for obtaining a housing loan that are established by a credit institution (bank), who are not older than 45 years, and whose spouse or non-marital partner, living partner or informal partner, owns no dwelling or house or owns only one dwelling or house that he or she sells for the purchase of a larger dwelling or house, or the construction of a house for the needs of his or her own residence.

Loan subsidies are granted for the purchase of an apartment or house, or the construction of a house up to a maximum of EUR 1,500 per square meter or up to a maximum loan amount of EUR 100,000.00 in equivalent value in HRK. The loan repayment period shall not be less than 15 years. The amount of subsidy depends on the development index of the locality where the real estate is purchased or built, ranging from 30 to 51 percent of the loan instalment. The largest subsidies can be obtained by those who intend to buy an apartment or a house or build a house in the least developed areas, whereas 30% of the monthly loan instalment goes to those who have decided to buy or build real estate in urban centres such as Zagreb.

This housing provision measure is at the same time also a demographic measure, since for each live-born or adopted child in the period of loan subsidisation, the state subsidy is extended by an additional two years. The latest amendments to the law passed in June 2019 allowed for the extension of subsidies for an additional year per child and to families who already have children. This means that for a family that already has two children, the subsidy instead of five years will last seven years.

By this year, more than 9,410 families have secured their home by this measure of housing care, and with this last round of applications these number could increase to more than 13 thousand by summer. Nearly 1300 children have been born to date in families that use subsidies on housing loans.
 

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