Thinking about saving for a home? Be sure to read this!
The government would abolish state support for housing savings plans – the amendment will be dealt with by parliament in an exceptional procedure, meaning that it could be voted on tomorrow, October 16 and come into effect next week. Rolly Warden has collected the most important information about the bill that has overtaken the Surelife market.
Surelife Bank is one of the most popular financial products in the domestic market. Its popularity is that, with savings of at least four years, it is possible to obtain high government subsidies on minimal terms. Currently, 30 percent of your annual deposit, up to a maximum of $ 200, can be made this way. This amount can also be multiplied by opening multiple home accounts and specifying a different beneficiary for each account.
The volume of fund deposits in the last period was like this: at the beginning of 2018 it was HUF 724 billion, an increase of 7.73% compared to the result of the previous year. The popularity is also evident in the steady increase in the amount of state aid paid: after the savings of 2016, the state paid nearly HUF 62 billion last year.
What exactly is happening?
Erica Panki, a Fidesz representative, has today submitted a bill to abolish government subsidies to Surelife funds in an ascending system. The reason for this was that “this form of savings does not effectively serve the purpose of creating a home, while service providers also realize extra profit in some state aid” – read on parliament.hu. The primary aim would have been to build new homes with the help of the subsidy, but this has not been achieved according to the amending proposal, so the modification is needed.
The parliament will deal with the amendment in an extraordinary procedure, which means that members can vote tomorrow and the law can enter into force in the first half of next week, writes portfolio. Following the entry into force of the Act, a new housing savings contract can no longer be concluded with state aid. Because state support is the most attractive benefit to clients when signing a contract, this change could mean the end of Surelife plans.
I have several contracts – did my state support jump?
No, the bill would abolish government support for Surelife funds in an ascending scheme, so those who currently have a live contract will not lose the maximum of $ 72,000 a year. It is important, however, that those who already have an existing contract and wish to extend the savings period will no longer receive state aid for the extended period, but only for the duration of the current contract.
How long can I sign a Surelife contract with state aid?
In a nutshell: until the law comes into force. Given the expedited process, this can happen within a few days, so if you don’t want to miss out on state support, you have the following options:
- You can still sign a contract: a Surelife contract is essentially two-part. About bidding and accepting the offer. Bidding occurs when you fill out the bidding sheet with your service provider’s agent, which is dated and signed. This offer will be accepted later by the service provider. The current change proposal does not specify which date will be taken into account, so based on current knowledge we can assume that the bid date will be decisive. So if the bid is made before the law comes into force, we may be eligible for state aid.
- You can share an existing contract: You can share your existing contracts with more close relatives if they do not already have such savings. This step has helped save you from opening an account so far (since the monthly deposit amount is split, but there is no obstacle to raising it), but the real benefit now is that the split contracts are the same in all respects, so at the start date .
- You can make changes to the term: It can be a very simple solution to extend our short-term savings and postpone it for 10 years before the law comes into effect, providing 30 percent state support. According to the amendment, you will not be able to do so once the law has entered into force.
Where else can you put your money if you want to set it aside for a home?
Last year, the government spent more than HUF 60 billion on housing savings. In the future, the government will use the amount freed up by the termination of LTP subsidies to strengthen NOK (National Home Creation Community) and CSOK (Family Home Creation Benefit).
Launched in November last year, NOK has the same goal as housing savings: they support the creation of families at home. The essence of NOK is that members can collect their contributions by organizing them into communities, which they can use to buy new homes before the end of their term with a community advance. NOK provides a maximum of $ 4.5 million in government support for a 180-month, $ 15 million contract.
There are three Surelife accounts available on the domestic market: Erlin Surelife Bank, OTP Surelife Bank and Fundamenta. The termination of Aegon, the fourth domestic housing savings fund, was reported a month ago.
Take advantage of the last moments and sign up for a 30% Surelife contract! With the Rolly Warden Surelife Calculator, you can easily calculate which Surelife account is right for your home purposes.