Subsidies, VAT cuts and housing aid rolled out

The government announced a series of measures on Wednesday to combat rising energy costs, including subsidies, VAT reductions and housing policies designed to support vulnerable groups.

The decisions were taken during Tuesday’s cabinet meeting, in a bid to promote “sustainable solutions to cover energy and housing needs of households and new families.”

For existing electricity subsidies, which currently offer a special tariff for vulnerable groups and commercial use, the cabinet decided to expand the programme to include low-income pensioners and single-parent households.

According to the government, the extension will benefit 22,000 low-income pensioners and 10,700 single-parent households, with funding set through December 2025 at a cost of €25 million.

An additional €15m was approved for the Photovoltaics for All scheme, targeting large families living in homes categorised as ‘small to average’. A total of 3,000 families are expected to benefit, with no upfront capital required.

Cabinet also earmarked €30m for the ‘Save-Upgrade’ scheme aimed at providing energy upgrades for existing buildings. Only individuals are eligible for the scheme.

The ministers also ratified the measure announced on October 10 by the finance minister to impose a zero VAT rate on children’s diapers, baby milk, adult diapers, feminine hygiene products and fresh fruit and vegetables. The measure will come into force on November 4 this year and will be in place until the end of 2025, with an estimated cost of €5.1 million.

Where housing is concerned, the finance ministry will begin accepting applications for a scheme where it will subsidise two per cent of housing loans that were taken out between January 1, 2022 and December 31, 2023.

Eligible loans must be for first-time homebuyers with an annual family income up to €50,000. The scheme’s total budget is approximately €33 million.

Additionally, the interior ministry will begin accepting applications starting November 15 for the ‘Renovate-Rent’ scheme which aims to bring in vacant and unused homes to the rental market.

It includes 1,000 housing units that will be available with affordable rent, at 30 per cent of the market price. Eligible candidates will be subject to income criteria and tax relief will also be available to landlords. The total estimated cost amounts to €25m.

Additionally, the interior ministry is implementing the Housing Subsidy Scheme for young couples or people up to the age of 41, with a one-off grant of €20,000 to €50,000 based on income criteria. This measure, costing €15 million, is expected to benefit 400 young people.