Government unveils €196 mln relief package

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The government unveiled a comprehensive €196 mln package of measures, including fuel subsidies, to alleviate the financial burdens of the rising cost of living.

The 17-measure package, including the reinstatement of an electricity bill subsidy, was announced by President Nikos Christodoulides following a cabinet meeting on Thursday.

“I am acutely aware of the problems and challenges that you are grappling with.

“I understand the immense pressure that both households and businesses are currently enduring,” said President Christodoulides in his address.

“It is within this very context that, immediately upon taking office, we implemented a range of measures aimed at alleviating the challenges faced by our citizens,” he added.

The President referred to the renewal of the Cost-of-Living Allowance agreement, raising welfare allowances, increasing low-pension allowances, reducing the extraordinary contribution to defence on collected taxes, implementing a zero-rate policy for various essential goods”.

One of the key measures is the reinstatement of the electricity subsidy, effective from November 1 to February 29, 2024.

This subsidy will apply to residential, commercial, and industrial consumers, with the amount of support varying based on income.

Vulnerable consumers will be entitled to 100% of the subsidy.

The President did not reveal the subsidy amount to be allocated to each consumer.

Previously, the measure provided a maximum €68.72 discount on electricity bills.

The universal subsidy benefited 449,000 households and 111,500 businesses at an estimated cost from September 2022 until June at over €100 mln. It was scrapped at the end of June this year.

In addition to the electricity subsidy, the government has decided to reinstate a fuel consumption tax reduction of 08.33 cents per litre from November until the end of February.

The consumption tax on heating oil will also be reduced by 06.39 cents per litre from December to March.

Zero VAT

Moreover, VAT on meat and vegetables will be waived from December until the end of May.

Child benefits will now be extended to cover children of large families until they complete their undergraduate studies, with the allowance increasing by 5%.

The housing market is boosted with a 2% subsidy on the interest rate for mortgages contracted between January 2022 and the end of December this year, specifically for first-time homebuyers with a combined annual income of €50,000 or less.

The government has introduced several “medium-term” measures, including rent subsidies a one-time payment of €300 for those receiving the guaranteed minimum income, which increases to €500 for beneficiaries with severe disabilities.

Recipients of the mobility allowance for individuals with disabilities will receive a one-time payment of €120.

Promoting solar energy is part of these medium-term measures, with an initial grant of €1,000 provided to those interested in installing solar panels in small and medium-sized houses, to be repaid through future electricity bills.

The government has also introduced the “Renovate-Rent” plan to bring vacant and abandoned houses back into the housing market.

Urban planning incentives for the construction of residential units will be reinforced, with some units offered at affordable rates.

Efforts will be made to utilise more private land with additional tax incentives for constructing residential units.

More social housing will be developed, and rural land plots will be offered to low-income families.

The one-time housing subsidy grant for young couples aged 41 and below has been raised from €20,000 to €50,000.