GOVERNMENT: For housing savings deposits in 2023, the maximum state incentive is 1.99 euros

Citizens who deposit 663.61 euros (5,000 kuna) in housing savings this year will receive a state incentive of 1.99 euros (15 kuna), according to the decision on the amount of state incentive funds for housing savings collected in 2023, which was adopted by the Government on Thursday.

The percentage of state incentive funds for housing savings collected in 2023 is 0.3 percent. Thus, the maximum amount of incentive that a housing saver can achieve next year for a deposit of 663.61 euros (5,000 kuna) is 1.99 euros (15 kuna).

This is five kuna less than the maximum amount of state incentive funds that could be obtained for housing savings deposits last year, when the percentage of state incentive funds was 0.4 percent, allowing for a deposit of 5,000 kuna to receive a maximum of 20 kuna.

The state provides incentive funds to housing savers only in one housing savings bank, and only for deposits up to a maximum of 5,000 kuna in one year, and the amount of the incentive depends on the amount that the citizen deposited during the year.

The amount of state incentive funds for housing savings collected in 2023 is expected to be paid to housing savers from the state budget for 2024, which has a planned amount of 132,723 euros (one million kuna).

Based on the Law on Housing Savings and State Incentives for Housing Savings, the Government makes a decision on the amount of state incentive funds every year. Namely, in 2015, a variable percentage of state incentive funds was introduced, and the formula is based on the average interest rates on time deposits of citizens, with a corrective factor representing the necessary adjustment for longer maturities.

Since the introduction of that formula, the amount of state incentives for housing savings, considering the decline in interest rates, has decreased year by year, and in the last few years has stagnated at low levels.

The housing savings system in Croatia was introduced in 1998, and initially, the amount of state incentive funds was determined as a fixed percentage, which was gradually reduced – initially it was a maximum of 1,250 kuna per year, then 750 kuna, and then 500 kuna. In 2014, incentives were abolished, and no payments were made for housing savings deposits that year, and the following year, in 2015, a variable percentage was introduced.

The circle of entities required to provide a statement on fiscal responsibility is expanding

The Government on Thursday submitted to the Parliament a proposal for amendments to the Law on Fiscal Responsibility, which expands the entities required to provide a statement on fiscal responsibility to commercial companies in majority ownership of the Republic of Croatia or state bodies, as well as local and regional self-government units and their subsidiaries.

This expansion of obligations is also related to the reform within the National Recovery and Resilience Plan 2021-2026, which includes amendments to the framework regulating corporate governance in legal entities owned by the state of special interest to Croatia, i.e., in legal entities owned by the state in full or majority ownership of the central state, emphasized Finance Minister Marko Primorac.

The proposed amendments also expand the tasks of the Fiscal Policy Commission, which will include the consideration and comparison of macroeconomic and budget projections with achieved values over a period of four consecutive years, which will be conducted at least once every two years, as well as the confirmation of macroeconomic projections on which the stability program and draft budget plan are based in accordance with the Budget Act.

Minister Primorac stated that these changes align Croatian legislation with EU acquis and further clarify the provisions of the EU Regulation on common provisions for monitoring and assessing draft budget plans and ensuring the reduction of excessive deficits of member states in the euro area.

With these amendments, the law is also aligned with the Budget Act, which includes the preparation of the draft budget plan in the budget process, to ensure coordinated economic policy among euro area member states, which the Government is obliged to submit to the European Commission every year.

At the same time, the provisions of the Law in which amounts in kuna are replaced with amounts in euros are being amended.