Today, the Ministerial Council decided on a set of measures to support households and businesses. A key aspect of this package is its inclusion of permanent solutions addressing the challenges of energy costs and housing issues. The government's goal is "to provide comprehensive and sustainable solutions for energy and housing, aiming to relieve thousands of citizens and businesses from associated costs."

These measures are costed and consider the fiscal capabilities of the Cypriot economy. Specifically, the 11 measures with immediate impact amount to €141 million, while the 6 housing policies total €55 million.

This package is announced at a time when the changing global landscape is causing varied effects on multiple levels. The government "remains committed to fiscal responsibility with a people-centric approach, aiming to enhance the daily lives of citizens and improve their overall quality of life," as stated in a presidential announcement.

1. Tiered Electricity Cost Subsidy:

   1. Applicable for the billed months from November 2023 to February 2024, for electric accounts metered up to February 29, 2024.

   2. Covers residential, commercial, and industrial consumers.

   3. Vulnerable consumers receive a subsidy covering 100% of the electricity price increase.

   4. Excludes the bi-monthly Water Extraction Rate 46 due to corresponding measures by the Ministry of Agriculture.

   5. Furthermore, similar relief for customers of providers other than AΗΚ will be handled similarly, given the approved power of their substations does not exceed 70kVA (100A 3-Phase) and if there are increased bills due to the cost of fuel for electricity production, as long as their contracts account for this additional cost.

   6. The estimated cost of this measure is around €45 million, covering 429,000 homes and 106,000 businesses.

2. Reduction in Special Fuel Consumption Tax:

   1. A decrease by 8.33 cents per liter, including VAT, at the minimum rates based on community provisions.

   2. Applicable for the months of November 23 to February 24. (Gasoline from €0.429/liter to €0.359/liter and diesel from €0.40/liter to €0.33/liter).

   3. The fiscal cost is estimated at €21.8 million.

3. Reduction in Heating Oil Consumption Tax:

   1. Reduced to the minimum rate based on community provisions (from €0.07473/liter to €0.021/liter) (a decrease by 6.39 cents per liter, including VAT, depending on weather conditions).

   2. Applicable for the months of December 2023 to March 2024.

   3. The fiscal cost is estimated at €3.8 million. 

4. Solar Panels for All Initiative

   1. The initiative offers beneficiaries the opportunity to install a solar panel system without any upfront costs. Beneficiaries will receive a €1000 grant, and the remaining amount will be paid in bimonthly installments of €150 through their electricity bill, once electricity production begins from the installed solar panel system. The estimated budget for this scheme is €30 million, sourced from the Renewable Energy and Energy Saving Fund (REESEF) of the Republic of Cyprus, which currently holds over €70 million.

5. Solar Panels for Businesses Initiative

   1. Encourage businesses to increase their self-generation and consumption of electricity through solar panels.

   2. Businesses can install solar panel systems with a virtual net-billing capability up to 1MW with storage and up to 400kW without storage, with a maximum power of 30MW.

6. Zero VAT on Basic Goods – Including Meat and Vegetables

   1. This will be applicable from December 1, 2023, to May 31, 2024.

7. Inclusion of Students from Large Families in the Child Allowance Scheme

   1. Newly eligible students will receive 50% of the regular child allowance.

   2. It applies to students pursuing their first degree.

   3. Eligibility extends up to 23 years for female students and 24 years for male students, provided they are still studying. This replaces the current policy tied to the completion of mandatory military service.

   4. Potential beneficiaries: 3,860 large families receiving the child allowance.

   5. Estimated budget impact: €3.3 million.

8. Increase in Child Allowance by 5%

   1. Estimated budget impact: €3.7 million.

9. Allowance for People with Disabilities

   1. A one-time grant of €120 for individuals with disabilities or those receiving a mobility allowance.

   2. Estimated budget impact: €500,000.

10. Rent Allowance for EEE Beneficiaries

    1. A one-time grant of €300 for EEE beneficiaries receiving rental or mortgage interest subsidies and €500 for EEE beneficiaries with severe disabilities who receive rental or mortgage interest subsidies.

    2. Estimated budget impact: €965,000.

11. 2% Subsidy on Housing Loan Interest

    1. Pertains to loans taken between January 1, 2022, and December 31, 2023.

    2. Covers the purchase and construction of a first home, with the subsidy lasting for a 2-year period.

    3. For families with an annual income of €50,000.

    4. Estimated budget impact: €20 million.

The government will make its most significant intervention to address housing issues. The housing policy includes the following measures:

1. Housing Subsidy for Young Couples and Individuals

2. "Renovate and Rent" Scheme

3. Strengthening Existing Urban Incentives

4. New "Build and Rent" Scheme

5. Construction of Units for Social Housing

6. Allocation of Land in Rural Areas for Low-Income Families

Details of the housing measures will be presented by the Interior Minister next week.