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Cyprus

Public consultation on the draft law for ‘Mortgage to Rent’ scheme

The finance ministry on Thursday published a call for a public consultation on a package of seven bills aimed at the smoother implementation of the ‘Mortgage to Rent’ scheme which aims to protect vulnerable borrowers who cannot restructure their loans secured against their primary residence.

“The purpose of the scheme, of which Kedipes is the implementing entity, offers an alternative, definitive solution where people can transfer ownership of their primary residence to Kedipes, while keeping residency in their home without any other financial burden, and with the rent paid in full by the state over the long term,” read a ministry statement.

Kedipes (Cyprus Asset Management Company) is a residual entity of the now-defunct Cyprus Cooperative Bank.

For the purpose of implementing the plan, a set of bills has been prepared to make its implementation smoother and attractive to potential beneficiaries.

According to the finance ministry, the purpose of proposed bills 1 through 6 is to enable exemption from the obligation to pay tax on the transfer of immovable property, with the ultimate aim of making this project more attractive.

Any interested party can submit opinions, comments or suggestions on the bill, to the Finance Ministry until November 25, 2022, in Microsoft Word file format, at the e-mail address [email protected].

The scheme is expected to cover several thousands of vulnerable borrowers as well as pensioners over the age of 65.

Eligible for the scheme are individuals who had non-performing loans secured against a primary residence, the market value of which cannot exceed €250,000, irrespective of whether these individuals participated in another government scheme.

Also included in the programme will be vulnerable borrowers at Kedipes and the Housing Finance Corporation whose housing loans are likewise non-performing.

Based on preliminary data, the scheme will cover a loan portfolio of between €2.5 billion to €3 billion, of which €1.5 billion held by Kedipes.

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