Lawmakers on Monday began discussing two government bills aimed at boosting the stock of residential units and providing affordable housing, but not all were convinced this was enough to drive down rents.

The two bills relate, respectively, to the government schemes known as ‘Build to Rent’ and ‘Renovate and Rent’.

MPs gave the various implicated departments and agencies (finance ministry, the tax department, the Land Development Corporation, the land registry) two weeks to come back with feedback and possible tweaks to the legislation.

Under the ‘Build to Rent’ scheme, incentives are given to developers to rent out residential properties at affordable rates. This involves affording such properties a higher building ratio.

As for the ‘Renovate and Rent’ scheme, it aims to bring back into the market idle residential units. Here, the government will provide assistance so that the owners can afford to renovate the properties.

A state grant for renovation expenses will be given provided the units meet certain conditions – the property was idle, and has a construction permit and a structural stability certificate.

The term ‘affordable rent’ is defined as that which is 30 per cent lower than the going market rate, depending on the locality.

Tenants’ revenues from rent would be completely exempt from income tax (or corporate tax), and moreover property owners will qualify for higher capital allowances – akin to tax deductible expenses. The capital allowances for the buildings themselves will go up to 5 per cent from 3 per cent, and to 15 per cent from 10 per cent for machinery and equipment.

The tax relief will apply for as long as the ‘Renovate and Rent’ scheme is in force. The scheme spans the years 2024-2027 and will have an estimated fiscal impact of €1.75 million a year.

Eleni Simeonidou, director of the Land Development Corporation, suggested the duration of the scheme be extended to six years instead of the planned four.

Answering questions, she said that a platform for ‘Renovate and Rent’ is already live since mid-November; so far about 25 applications have been received from property owners.

Applications for ‘Build to Rent’ began being accepted in June of last year. On this, Simeonidou told MPs that “we’ve got a very satisfactory number of applications” and that nine agreements with property owners have been struck to date.

For his part, Diko MP Chrysis Pantelides said the expectation is that every incentive or tax relief would help toward the chief priority – “everyone being able to afford housing”.

But Akel’s Andreas Kafkalias was less impressed: “If the government thinks that these two bills…solve the problem of affordable housing, it confirms they have not grasped the scope of the issue.”