REPUBLIC OF LITHUANIA

LAW ON

THE FINANCIAL INCENTIVE FOR YOUNG FAMILIES ACQUIRING A FIRST HOME

21 June 2018 No XIII-1281

Vilnius

CHAPTER I

GENERAL PROVISIONS

Article 1. Purpose and scope of the Law

1. The purpose of this Law shall be to stipulate conditions of the provision of the financial incentive for young families acquiring a first home in regions of the Republic of Lithuania (hereinafter: the ‘financial incentive for young families acquiring a first home’), a procedure for providing the incentive and financing thereof.

2. This Law shall apply to young families in which each family member has declared his place of residence or is included in records of the persons who have not declared their place of residence in accordance with the procedure specified by the Law of the Republic of Lithuania on Declaration of the Place of Residence:

1) citizens of the Republic of Lithuania and their family members;

2) citizens of a Member State of the European Union or a country of the European Free Trade Association participating in the European Economic Area and their family members;

3) aliens holding a permit of a long-term resident of the Republic of Lithuania to reside in the European Union;

4) aliens who have been granted asylum in the Republic of Lithuania.

Article 2. Definitions

1. Housing shall be interpreted as defined in the Law of the Republic of Lithuania on Support for the Acquisition or Rental of Housing.

2. Young family shall be interpreted as defined in the Law on Support for the Acquisition or Rental of Housing.

3. Down payment of a housing loan (hereinafter: a ‘down payment’) shall be a part of the value of housing to be purchased or/and constructed as determined by the creditor which the borrower has to pay with his own funds.

4. Other concepts used in this Law shall be interpreted as they are defined in the Law of the Republic of Lithuania Law on Regional Development and the Law of the Republic of Lithuania on Credit Relating to Immovable Property.

CHAPTER II

FINANCIAL INCENTIVE FOR YOUNG FAMILIES ACQUIRING A FIRST HOME AND THE FINANCING THEREOF

Article 3. Financial incentive for young families acquiring a first home and the amount thereof

1. The financial incentive for young families acquiring a first home shall be provided to the young families who meet the requirements indicated in Article 5(1) of this Law, have received a certificate of the form approved by the Minister of Social Security and Labour of the Republic of Lithuania confirming the right of a young family to the financial incentive for young families acquiring a first home (hereinafter: a ‘certificate’) and take out a housing loan for the purchase and/or construction of a first home, by way of subsidising the payment of a part of the housing loan or, at the request of the young family, a down payment (hereinafter: a ‘subsidy’) (hereinafter: a ‘housing loan for the acquisition of a first home’). Subsidies shall be granted:

1) to the young families who do not raise children or the children placed under permanent guardianship/curatorship – in the amount of 15 per cent of the amount of a housing loan for the acquisition of a first home;

2) to the young families who raise one child or one child placed under permanent guardianship/curatorship – in the amount of 20 per cent of the amount of a housing loan for the acquisition of a first home;

3) to the young families raising two children who (or one of whom) may be placed under permanent guardianship/curatorship – in the amount of 25 per cent of the amount of a housing loan for the acquisition of a first home;

4) to the young families raising three or more children who (or one of whom) may be placed under permanent guardianship/curatorship – in the amount of 30 per cent of the amount of a housing loan for the acquisition of a first home.

2. The amount of a housing loan for the acquisition of a first home based on which a subsidy granted to a young family is calculated may not exceed EUR 87 000 or an equivalent amount in another currency.

3. A maximum of 15 per cent of the amount of a housing loan for the acquisition of a first home may be used for the acquisition of a land plot which includes housing or in which such housing is planned to be constructed.

4. If a young family, having received a subsidy in the amount specified in paragraph 1 of this Article, acquires the right to a larger subsidy specified in paragraph 1 of this Article, it shall be granted an additional subsidy in the amount of the difference between these subsidies. When the right to a larger subsidy in the amount specified in point 2 or 3 of paragraph 1 of this Article is acquired, the young family must meet the definition of a young family when applying for the granting of the additional subsidy. When the right to a larger subsidy in the amount specified in point 4 of paragraph 1 of this Article is acquired, each of the spouses or a single mother or a single father raising a child/children or a child/children who (or one of whom) may be placed under permanent guardianship/curatorship must be up to 40 years old (inclusive) when applying for the granting of the additional subsidy.

5. An additional subsidy shall be calculated based on the amount of the balance of a housing loan for the acquisition of a first home on the day on which a young family, having received the housing loan for the acquisition of a first home (hereinafter: the ‘borrower’), applies to the creditor entered on the public list of creditors (hereinafter: the ‘creditor’) with the request to amend an agreement on a housing loan for the acquisition of a first home (hereinafter: a ‘loan agreement’) concluded with the borrower. The borrower wishing to receive the additional subsidy must have discharged the liabilities assumed under the loan agreement by the day on which he applies to the creditor with the request to amend the loan agreement.

6. A subsidy shall be paid to a young family not later than within four months from the granting of a housing loan for the acquisition of a first home, an additional subsidy – not later than within four months from applying to the creditor with the request to amend a loan agreement. If the housing loan for the acquisition of a first home is granted for the construction of housing, the subsidy shall be paid not later than within four months from the submission of the documents confirming completion of the construction of housing to the creditor.

Article 4. Financing of the financial incentive for young families acquiring a first home

1. The financial incentive for young families acquiring a first home shall be financed from the state budget of the Republic of Lithuania.

2. The financial incentive for young families acquiring a first home shall be provided having regard to appropriations of the state budget of the Republic of Lithuania for the relevant year for the provision of the financial incentive for young families acquiring a first home.

CHAPTER III

DETERMINATION OF ENTITLEMENT TO THE FINANCIAL INCENTIVE FOR YOUNG FAMILIES ACQUIRING A FIRST HOME AND PROCEDURE FOR PROVIDING THE FINANCIAL INCENTIVE FOR YOUNG FAMILIES ACQUIRING A FIRST HOME

Article 5. Entitlement to the financial incentive for young families acquiring a first home

1. Entitlement to the financial incentive for young families acquiring a first home shall be granted to the young families who meet all of the following requirements:

1) conform to the definition of a young family when lodging an application for confirmation of the right to the financial incentive for the acquisition of a first home (hereinafter: an ‘application’) of the form approved by the Minister of Social Security and Labour;

2) before applying to the institution referred to in Article 6(1) of this Law for the financial incentive for young families acquiring a first home did not possess, and at the time of lodging an application and issuing a certificate neither member of a young family possesses, housing belonging by the right of ownership in the Republic of Lithuania and in a foreign state;

3) acquire a first home in a region of the Republic of Lithuania in the area whereof the standard value per unit area of immovable property is not less than by 65 per cent lower than the highest standard value of one square meter of housing in multi-apartment residential buildings, as determined and announced by the manager of the Real Property Register on its website having regard to average market values of immovable property in cities of Lithuania, centres of municipalities and other areas of the municipalities as on 1 January of each year;

4) have declared assets in accordance with the procedure laid down in the Law on the Declaration of Assets of Residents.

2. When a housing loan for the acquisition of a first home is provided for the construction of housing, entitlement to the financial incentive for young families acquiring a first home shall be determined prior to the granting of the housing loan for the acquisition of a first home, but a subsidy shall be paid only upon completion of the construction of housing in accordance with the procedure established by the Law of the Republic of Lithuania on Construction.

3. When housing is acquired from close relatives of members of a young family, the young family shall not be entitled to the financial incentive for young families acquiring a first home.

Article 6. Application for the financial incentive for young families acquiring a first home

1. The young families meeting the requirements stipulated in Article 1(5) of this Law who wish to receive the financial incentive for young families acquiring a first home shall apply for the issuance of a certificate in accordance with the procedure established by the Minister of Social Security and Labour to the administration of a municipality in the territory whereof they intend to acquire their first home by submitting a request and the documents and/or data specified by the Minister of Social Security and Labour in order to determine entitlement of young families to the financial incentive for young families acquiring a first home (hereinafter: ‘supplementary documents’).

2. If a municipal administration receives supplementary documents as requested and/or under data provision agreements from state and municipal institutions, agencies, enterprises and organisations, young families shall not be required to submit them.

3. A municipal administration shall, not later than within ten working days from the receipt of the documents referred to in paragraph 1 of this Article, issue to a young family a certificate valid for 15 calendar days from the date of the issuance thereof but not later than until 31 December of that year or provide a reasoned written refusal if the young family does not meet the requirements stipulated in Article 5(1) of this Law or if all the appropriations of the state budget of the Republic of Lithuania for that year have been used to provide the financial incentive for young families acquiring a first home. In the cases when the municipal administration refuses to issue the certificate to the young family, as all the appropriations from the state budget of the Republic of Lithuania for that year have been used to provide the financial incentive to young families acquiring a first home, the young family shall be entered on a waiting list of young families for the financial incentive for young families acquiring a first home. The financial incentive for young families acquiring a first home shall be granted in the ranking order.

4. A young family wishing to receive a housing loan for the acquisition of a first home shall submit a certificate issued by a municipal administration during the period of its validity to the creditor granting housing loans for the acquisition of a first home.

5. A young family who acquires the right to an additional subsidy shall apply to a municipal administration and the creditor for the granting of the additional subsidy in accordance with the procedure provided for in this Article.

Article 7. Duties of young families

1. Young families shall have the following duties:

1) to provide in an application the complete and accurate information proving a young family’s entitlement to the financial incentive for young families acquiring a first home;

2) in respect of the young families who have received the financial incentive for young families acquiring a first home and who wish to transfer into the ownership of another person the housing acquired by means of a housing loan for the acquisition of a first home within the first ten years from the acquisition of the right of ownership to the acquired housing, to repay a subsidy to the creditor in accordance with the procedure laid down in a loan agreement. If a young family has repaid to the creditor a housing loan for the acquisition of a first home before the lapse of ten years from the conclusion of a loan agreement, this young family must repay a subsidy to the Ministry of Social Security and Labour of the Republic of Lithuania or an institution authorised by it if the young family wishes to transfer into the ownership of another person the housing acquired for this housing loan during the first ten years from the acquisition of the right of ownership to the acquired housing.

2. Having repaid a subsidy in the cases provided in point 2 of paragraph 1 of this Article, a young family shall apply in writing to the Ministry of Social Security and Labour or an institution authorised by it for a confirmation of the repayment of the subsidy and the removal of an entry in the Real Property Register restricting the transfer of the right of ownership to the acquired housing.

3. The provisions of paragraph 1 of this Article regarding repayment of the received subsidy shall not apply in the following cases:

1) in the event of force majeure;

2) in the event of a change in ownership of housing acquired for a housing loan for the acquisition of a first home by way of inheritance, when the housing is inherited by the spouse, children and/or the children who are or were placed under permanent guardianship/curatorship;

3) in the event of termination of the marriage of a young family, if the right of ownership is transferred to one of the ex-spouses;

4) for the families in which, after the lapse of five years from the acquisition of the right of ownership to the acquired housing, three or more children have been born and who wish to transfer the housing into the ownership of another person after the lapse of not less than five years in order to replace it with a larger housing in the same municipality.

Article 8. Processing of information

1. The information available to a municipal administration about the young families who have been issued certificates shall be processed in the Social Support for Families Information System.

2. A municipal administration shall publish on its website information on the areas of the municipality wherein housing development is foreseen according to the municipality’s strategic development documents.

3. The Ministry of Social Security and Labour shall, each year not later than on 1 February, publish on its website information on the regions of the Republic of Lithuania in the areas whereof the standard value per unit area of immovable property is not less than by 65 per cent lower than the highest standard value of one square meter of housing in multi-apartment residential buildings, as determined and announced by the manager of the Real Property Register on its website having regard to average market values of immovable property in cities of Lithuania, centres of municipalities and other areas of the municipalities as on 1 January of each year.

4. At the request of a municipal administration, state and municipal institutions, agencies, enterprises and organisations must, free of charge, provide it with data and/or information necessary for determining whether a young family is entitled to the financial incentive for young families acquiring a first home.

CHAPTER IV

CREDITORS PROVIDING HOUSING LOANS FOR THE ACQUISITION OF A FIRST HOME

Article 9. Creditors providing housing loans for the acquisition of a first home

1. Housing loan for the acquisition of a first home may be provided by all creditors which have concluded agreements with the Ministry of Social Security and Labour or an institution authorised by it regarding a procedure for providing housing loans for the acquisition of a first home (financing of subsidies). These agreements must specify a procedure for financing a subsidy and the following obligations of the creditor:

1) to control that a housing loan for the acquisition of a first home is used for the purpose specified in Article 3(1) of this Law;

2) to use the calculated subsidy to cover the down payment at the request of the borrower;

3) to notify the Ministry of Social Security and Labour or an institution authorised by it in writing of a received certificate not later than within three working days from the date of receipt of the certificate;

4) to notify the Ministry of Social Security and Labour or an institution authorised by it in writing of an adopted decision to grant or refuse to grant a housing loan for the acquisition of a first home not later than within three working days from the adoption of this decision;

5) to stipulate in a loan agreement that an agreement for the purchase and sale of housing acquired by means of a housing loan for the acquisition of a first home is to provide for the obligation of the borrower as established in Article 7(1)(2) of this Law on the basis whereof an entry is to be made in the Real Property Register at the time of registration of the right of ownership to the acquired housing restricting the transfer of the right of ownership;

6) when a housing loan for the acquisition of a first home is granted for the construction of housing, to stipulate in a loan agreement, having regard to the obligation established in Article 7(1)(2) of this Law, that before the registration of a mortgage transaction, the borrower must apply to the manager of the Real Property Register with a request to make an entry restricting the transfer of the right of ownership;

7) to transfer the subsidy repaid by the borrower to a bank account indicated by the Ministry of Social Security and Labour or an institution authorised by it;

8) after the end of the calendar year, to submit to the Ministry of Social Security and Labour or an institution authorised by it reports on granted housing loans for the acquisition of a first home and subsidies;

9) to provide a housing loan for the acquisition of a first home for a period of not less than three years from the date of conclusion of an agreement regarding a procedure for providing housing loans for the acquisition of a first home (financing of subsidies).

2. An agreement regarding a procedure for providing a housing loan for the acquisition of a first home (financing of subsidies) must contain the commitment of the Ministry of Social Security and Labour or an institution authorised by it to pay to the creditor, until the borrowers are granted a subsidy in the amount specified in Article 3(1)(4) of this Law but for at least ten years from the acquisition of the rights of ownership to the acquired housing, a consideration in the amount specified by the Government of the Republic of Lithuania for the discharge of the obligations established in the agreement regarding a procedure for providing a housing loan for the acquisition of a first home (financing of subsidies). This consideration may not be paid to the creditor for longer than until the loan agreement is discharged or the loan agreement expires otherwise.

CHAPTER V

FINAL PROVISIONS

Article 10. Entry into force and implementation of the Law

1. This Law, except for paragraph 2 of this Article, shall enter into force on 1 September 2018.

2. The Government and the Minister of Social Security and Labour shall adopt legal acts implementing this Law by 31 August 2018.

I promulgate this Law passed by the Seimas of the Republic of Lithuania.

PRESIDENT OF THE REPUBLIC	DALIA GRYBAUSKAITĖ