Issue link: https://maltatoday.uberflip.com/i/1042376
BUDGET 2019 maltatoday | TUESDAY • 23 OCTOBER 2018 14 JAMES DEBONO IN a measure clearly target- ing separated persons pres- ently facing a bleak housing situation, the government is offering over-40-year-olds the chance to buy a residence jointly with the government. They will buy half the prop- erty, with the government buying the other half and paying the loan on that half. Once the loans are paid, the tenant will either have the chance of buying the other half of the property from the government, or else pay the government a rent on it. According to a White Pa- per issued last week single individuals needed to be on a gross income of €20,000 in order to afford a property in the cheapest region of the is- land. The Budget proposals fol- low the trust of the White Paper, which proposed that rental contracts are made mandatory for all rental agreements. According to the Budget, these will have to be registered with the Housing Authority as from next year. Means testing will be scrapped when calculating rent subsidies first intro- duced last year, with the gov- ernment seeking ways to help lower-middle-income earn- ers struggling with the hike in rents. The rent subsidy will be raised to €3,000 for single persons, from €1,600, and up to €5,000 for a family with two children, subject to a number of conditions which will be announced in the coming weeks. Incentives will also be an- nounced for landlords who rent out their properties on seven-year-long lets at af- fordable rents. These land- lords will receive a reduction on capital gains tax due when the property is eventually sold after the rent expires. Schemes for first- and second-time homebuy- ers' scheme introduced in previous Budgets as well as schemes encouraging the res- toration of properties in Ur- ban Conservation Areas will be retained. The government is also committed to introduce new regulations for an equity scheme through which the elderly can leave their home to the government in return for residing in a home of the elderly free-of-charge. As regards social housing the government reiterated plans for the construction of 500 apartments. For the first time the government an- nounced that a number of government buildings, which are currently in a dilapidated state, will be repaired and used as social housing. Government to help over 40s buy a home PROPERTY CHILDREN'S ALLOWANCE LOW income parents with more than one child will be the main ben- eficiaries of a revision of Children allowance rates announced in the Budget which will cost the govern- ment a meager €2 million which will be shared by 24,600 children living in families earning less than €20,000. Although hardly a game changer for middle income parents with a single child; the impact on low income fam- ilies – especially single parents and couples with more than one child – is more significant. The measure retains a strong ele- ment of proportionality benefitting low income earners but hardly touch- ing middle income earners. A couple earning €15,000 a year or a single parent earning that amount will only get €57 a year for each child. A couple earning a modest income of €18,000 (the equivalent of two mini- mum wages) a year would only get an extra €2 for each child. But a couple or a single parent earning the minimum wage (€8,600) would get an extra €89 for each child each year. This means that a single parent on the minimum wage who has two children will be getting an extra €192 a year. A couple earning €12,000 a year that has three children will get an extra €217 a year. Children's allowance, once con- sidered a pillar of the welfare state created by the Labour government in the 1970s, was last boosted in the Budget presented by Lawrence Gonzi in 2007. Back than the government extended the benefit to middle income earners by allocating €250 per child to 25,000 families previously deprived of this benefit. The government also read- justed rates in favour of families with more than one child. In this way the Nationalist govern- ment effectively reversed its own 1996 decision to restrict what was once a universal benefit to families where both spouses together earn more than €23,929. Back then it de- creased beneficiaries by 5,231 in one fell swoop. Introduced in 1971 by Dom Mint- off as an allowance for the first three children of every Maltese family, the benefit was extended to cover any number of children in a family when the PN was elected in 1987. €2 million children's allowance increase targets low income families