Press Releases

Immediate and medium-term measures to support households and businesses were decided today by the Council of Ministers, which met under the chairmanship of the President of the Republic, Mr Nikos Christodoulides. An important aspect of the package is that it includes measures that provide permanent solutions to address energy high cost and the housing problem. The aim of the Government is to offer holistic and sustainable solutions to the energy and housing issues, and to relieve thousands of citizens and businesses from the relevant costs.

The measures are cost-effective and take into account the fiscal potential of the Cypriot economy. Specifically, the 11 measures with a direct impact amount to EUR 141 million, and the 6 Housing Policy measures amount to EUR 55 million.

The package of measures is announced at a time when the international scene is re-shaping, causing a variety of impacts on various levels and the Government is called upon to manage, always responsibly and rationally, a particularly complex situation, especially in the field of energy and the ecomy at large. The government remains committed to fiscal responsibility with a human-centred approach for improving citizens’ daily routine and quality of life.

The 11 measures with an immediate positive effect (EUR 141 million)

 1.     Staggered subsidy of electricity costs

• for the months invoiced November 2023 – February 2024, for electricity bills with counted consumption up until 29.2.2024
• it will apply to residential, commercial and industrial consumers
• for vulnerable consumers, the subsidy covers 100 % of the increase in the electricity price.
• The reinstatement excludes the Bimonthly Pricing 46 for “Water Pumping”, due to the adoption of similar measures by the Ministry of Agriculture, Rural Development and Environment.
• Furthermore, similar reliefs to customers of suppliers other than the Electricity Authority of Cyprus will be handled accordingly, provided that the approved capacity of those customers’ premises does not exceed 70kVA (100A 3-F) and for those cases where increased tariffs arise due to an increase in fuel costs for electricity generation, provided that the contracts between them provide for the passing-on of such additional costs.
• The estimated cost of reinstating this measure amounts to approximately EUR 45 million.
• it covers 429.000 households and 106.000 businesses.

 2.     Reduction of the special excise duty on motor fuels

• by 8.33 cents per litre, including VAT, at the minimum rates under the acquis communautaire
• for the months November 23 – February 24 (petrol from EUR 0,429/litre to EUR 0.359/litre and diesel from EUR 0.40/litre to EUR 0.33/litre).
• The budgetary cost is estimated at EUR 21.8 million.

 3.     Reduction of the consumption tax on heating oil

• at the minimum rate under the acquis communautaire (from EUR 0,07473/litre to EUR 0.021/litre) (by 6.39 cents per litre, including VAT, depending on weather conditions)
• for the months December 2023 – March 2024.
• The budgetary cost is estimated at EUR 3.8 million.

 4.     “Photovoltaics for Everyone” Plan

• The Plan will allow beneficiaries to install a photovoltaic system without paying initial capital. The beneficiaries will receive a grant of EUR 1000 and the remaining amount will be repaid by a two-month instalment of EUR 150 each through the electricity bill, when electricity production from the photovoltaic system for the premises begins. The cost of the project is estimated at EUR 30 million, derived from the Renewable Energy Sources Fund (RES) and Energy Saving (ES), which is the main financial tool of the Republic of Cyprus used for the promotion of RES and ES. The reserve of the RES-ES Fund currently exceeds EUR 70 million.

 5.     “Photovoltaics in Businesses” Plan

• It will increase the power of self-generation and self-consumption of electricity through photovoltaic systems.
• It will enable companies to install photovoltaic systems, through virtual net- billing, up to 1 MW with storage and up to 400 kW without storage, with a maximum power of 30MW.

 6.     Application of a zero VAT rate to basic goods – Adding meat and vegetables

• from 1^st December2023 until 31^st May 2024.

 7.     Child Benefit Allowance to include students who are children of large families

• 50 % of child benefit allowance will be paid to this new category of beneficiaries.
• It concerns students for a first degree
• Up to 23 years old for girls and 24 years for boys, if they are students. (Instead of until the end of the military service that is currently in force)
• Number of potential beneficiaries: 3860 parents of large families, receiving child benefit allowance
• The budgetary cost is estimated at EUR 3.3 million.

 8.     5 % increase in the child benefit allowance

• The budgetary cost is estimated at EUR 3.7 million.

 9.     Disability allowance

• Granting of an one-off payment of EUR 120 to persons with disabilities/recipients of the mobility allowance.
• The budgetary cost is estimated at EUR 500 thousand.

 10.  Rent allowance for MGI recipients

• Granting of an one-off payment of EUR 300 to Minimum Guaranteed Income (MGI) beneficiaries receiving a rent/ housing interest loan subsidy, and
• EUR 500 to severely disabled MGI beneficiaries who receive a rent/housing interest loan subsidy.
• The budgetary cost is estimated at EUR 965 thousand.

 11.  Plan for 2% subsidy on housing interest loans

• It concerns loans contracted from 1/1/2022 to 31/12/2023.
• The plan will cover the purchase and construction of a first residence, with a maximum subsidy for a period of 2 years.
• For families with an annual income of EUR 50.000
• The budgetary cost is estimated at EUR 20 million.

Housing policy – Six measures worth EUR 55 million

To address the housing problem, the state will take extraordinary measures on housing issues:

12. Housing subsidy for young couples and young people

13. “Renovate – Rent”Plan

14. Reinforcing existing urban planning incentives

15. New Plan “Building and Renting”

16. Construction of housing units for social housing

17. Land allotment in the countryside for low income families.

The housing policy measures will be presented in detail by the Minister of Interior next week.

The above measures follow up on the decisions already taken by the government, such as:

• the renewal of the Automatic Indexation Agreement, already benefiting 180 thousand workers (100 thousand in the private sector and 80 in the public sector)
• the increase in welfare benefits;
• the increase in the low-pension allowance;
• the reduction of the extraordinary defence levy on the tax receivable,
• the increase in the allowance for mothers with many children,
• application of a zero VAT rate to basic commodities,
• the «ΚτίΖΩ» plan.

STAGGERED ELECTRICITY SUBSIDY CALCULATION TABLE

(EP)