Putin offers mortgage benefits and tax incentives to support large families in Russia

Putin offers mortgage benefits and tax incentives to support large families in Russia

Large families in Russia will receive various tax incentives, said Russian President Vladimir Putin in his State of the Nation Address to the Federal Assembly on Wednesday.

The new discount mortgage program for families with children can affect 600,000 families, according to President Putin. "Yes, it will require additional money. In 2019, 7.6 billion rubles ($115.8 mln), in 2020 - 21.7 billion rubles ($330.5 mln), in 2021 - 30.6 billion rubles ($446.1 mln), but based on estimates, the program can cover 600,000 families. Certainly, "We need to find this money, and we know where to get it," the head of state noted.

The mortgage provision program at a discount rate of 6% for families with two or more children was launched in early 2018, the president recalled. However, for almost a year, only 4,500 families used the benefits of the program, he stressed. "So the question arises - why? It means that the proposed conditions are not suitable for people. Now it turns out, they took out a loan, started paying it off, and the benefit ends, because the rate is subsidized for the first three or five years of the loan. I propose establishing a benefit for the entire term of the mortgage," he stressed.

Families with three or more children will be able to receive benefits from the federal budget to the tune of 450,000 rubles ($6,842) to pay off the mortgage, he explained.

"Taking into account the stability and the soundness of the macroeconomic situation in the country, the growth of state revenues, I consider it possible to introduce an additional measure of support for families where a third and subsequent child is born, namely, directly from the federal budget to pay 450,000 rubles for a mortgage for these families," he said. President Putin proposed backdating this measure, starting January 1, 2019. The government will have to recalculate and provide funds for this incentive from the current year's budget. According to the president, if the parental capital is added to help pay off the mortgage loan, a family will get nearly 900,000 rubles ($13,725). "In many regions, this is a significant portion of the cost of an apartment," Putin noted. He also drew the attention of the government and the State Duma to the fact that, if necessary, they would have to make the appropriate adjustments to the country's main financial document. "In 2019, this will require 26.2 billion rubles ($400 mln), in 2020 - 28.6 billion rubles ($436.3 mln), in 2021 - 30.1 billion rubles ($459 mln)," the president calculated. He added that it is necessary to provide families not only to buy ready-made housing, but also to build houses on their land.