Anyone who bought their first property within the past year will be able to apply for a €1,000 annual cash grant as of next week, when a €10,000, 10-year budget promise kicks off.

As of Monday, February 20, all first-time buyers who bought a property from 1 January 2022 and obtained a loan for the purchase, can apply to receive €1,000 every year for 10 years. 

Prime Minister Robert Abela unveiled the scheme during a press conference on Friday morning, saying he hoped developers would not abuse of the scheme by raising property prices to match the grant.

“I want to urge anyone in the sector to not shoot themselves in the foot by increasing property prices,” Abela said.

The new measure for first-time buyers was one of Labour’s key electoral pledges and was announced in last year’s Budget speech. The main aim of the scheme is to ease the burden many young first-time buyers face, especially at a time when they are also starting their careers. 

Abela's announcement comes just as one of Malta's major retail banks, HSBC Malta, quietly increased its interest rates and down payment requirements for first-time property purchases. 

The prime minister said he learnt of HSBC's move on Thursday. Property buyers could shop around at various other retail banks, he said. 

How does the scheme work?

To benefit from the scheme, first-time buyers must take out a home loan to finance their purchase from any local bank. This means the grant money will be paid directly to the buyer’s account, or joint account in the case of a couple. 

When only one person in a couple is a first-time buyer, the grant will be reduced to €500 per year. 

Applications will start being accepted on Monday, and all those who purchased a property as of January 2022 must apply no later than May 31, 2023. Their first grant payment will be issued by June 2023. 

First-time buyers who bought their property and signed their contract this year are to apply by no later than March 2024. Their first grant payment will be issued in June 2024. 

Applications can be filed through the Housing Authority website or by visiting the authority’s offices in Floriana.

Applicants will then need to submit proof that they have an outstanding home loan, in the form of a bank statement, each subsequent year between January and March, throughout the full 10-year term of the scheme. 

Anyone who sells their property or pays off their loan in full will stop receiving annual €1,000 grant payments.

Prime Minister Robert Abela during Friday's press conference. Photo: Matthew Mirabelli

3,000 first-time buyers to benefit from grant in first year 

Speaking during the press conference, Abela said in the first year alone, some 3,000 first-time buyers are expected to benefit from the grant, that will cost the public €3 million. 

“The government is focusing on addressing challenges people face everyday, especially our young first-time buyers, who are balancing the challenges of owning their own home and also chasing their dreams,” Abela said. 

He said that housing is no longer just about social housing, but also about making housing "affordable" for first-time buyers and other homeowners. 

Replying to journalists' questions on whether the scheme will cause inflation, Abela said it will not and appealed to developers to not take advantage of the scheme and increase the price of the property. 

Speaking during the press conference, Housing Minister Roderick Galdes praised the new scheme and said the government will continue to address the challenge of affordable housing over the years. 

Those interested to read more about the scheme can do so at housingauthority.gov.mt or call 153.