Subsidies for the Purchase of the First Property for a Mother and Child

The Law on Amendments to the Law on Financial Support for Families with Children ("the Law") stipulates the possibility for mothers to acquire rights to funds for construction, participation in the purchase, i.e. for the purchase of a family-residential building or apartment based on the birth of a child.

In February 2022, the Government of the Republic of Serbia ("Government"), i.e. the Ministry of Family Care and Demography ("Ministry") adopted a Regulation that more closely prescribes the conditions and the manner in which the right to funds for the construction or purchase of family - residential building or apartment, where it predicted that a special decision will determine the amount of funds that will be allocated from the Budget of the Republic of Serbia for each budget year individually.

Shortly thereafter, the Government issued a Decision on the amount of funds for exercising the right to funds for construction, participation in the purchase, i.e. the purchase of a family-residential building or apartment based on the birth of a child in 2022 ("the Decision"), which provided that the maximum amount of funds that can be approved for each individual subsidy will be 20,000 euros for 2022. The Government has not yet made a Decision for the 2023 on the amount of funds for construction, participation in the purchase, i.e. the purchase of a family-residential building or apartment based on the birth of a child, but that Decision is expected in the following period. By the time of the adoption of the Decision for 2023, it is not possible to realize the subject subsidy.

Besides that, with the Decision for 2023, it is possible to foresee conditions and amounts that are different from those prescribed in the Decision for 2022.

In order to, in accordance with the Law, realize the right to funds for construction, participation in the purchase, i.e. the purchase of a house or apartment based on the birth of a child, it is necessary that the child was born on January 1, 2022 or later, with the fact that the right can to accomplish the mother, while the Law stipulates that this right can exceptionally be exercised by the child's father, in the event of the mother's death, in which case he must, in addition to all the documentation provided for by the Regulation, submit a death certificate for the child's mother.

In order for the mother of a child to realize the right to funds for the construction, participation in the purchase, i.e. the purchase of a house or an apartment based on the birth of the child, it is necessary for the mother that it is the first property that she acquire in the territory of the Republic of Serbia.

The Law also prescribes a restriction in terms of the prohibition of the alienation of real estate that was built or purchased with allocated funds, within a period of five years from the purchase or construction.

To build a house that can be the subject of this right, it is needed:

- that the land on which the real estate is planned to be built is owned by the applicant and registered in the Real Estate Cadaster without encumbrance,

- that a building permit has been issued for the subject property in accordance with the regulations of planning and construction.

Also, it is mandatory that the house or apartment that is the subject of participation in the purchase, i.e. the purchase, is owned by the seller/s, as well as that it is registered in the Real Estate Cadaster without encumbrances.

In addition, the Regulation expressly prohibits kinship between the user of the funds and the seller of real estate. In this regard, the Regulation prescribes a ban with relatives who are blood relatives in the direct line up to any degree, and in the collateral line up to the second degree, as well as in in-law relatives up to the first degree of the direct line or adoptive kinship.

The mother who is a foreign citizen and has the status of a permanently resident foreigner can exercise the right to the subsidy, if the child was born on the territory of the Republic of Serbia and/or is a citizen of the Republic of Serbia.

The amount of funds that will be granted to the applicant depends on the criteria prescribed by the Regulation and Decision, and one of the criteria is the local self-government unit on whose territory the house will be built or the apartment will be purchased. In this regard, the Decision from 2022 stipulates that:

1. for house construction in local self-government units that have been determined as devastated areas in accordance with the relevant regulation in the amount of 50% of the value of house construction works;

2. for house construction in other local self-government units - in the amount of 20% of the value of house construction works;

3. for the purchase of the house or apartment - in the amount of 20% of the value of the real estate assessed by the competent tax authority, and at most in the amount of 20% of the purchase price;

4. for participation in the purchase of the house or apartment through a residential loan - in the amount of 20% of the estimated value of the real estate based on which the loan is approved, and at most in the amount of 20% of the purchase price.

In any case, the amount of funds given in the form of subsidies does not exceed the amount of 20,000 euros, besides that, in order to be entitled to a subsidy at all, the total monthly income of married or non-marital partners, on the day of submission of the request, must be lower than two average net monthly wages of employees in the Republic of Serbia, according to the last published data of the Republic Institute of Statistics.

Current practice indicates that the procedure for allocating funds is slow and ineffective, and this is one of the criticisms expressed by public opinion. In this regard, amendments to the Regulation were announced, all with the aim of achieving greater efficiency and legal certainty in the implementation of the procedure for the allocation of funds for construction, participation in the purchase, that is, for the purchase of a family-residential building or apartment.

For more information about this subject, you may contact Milosevic Law Firm.

Vlada Republike Srbije

Ministarstvo za brigu o porodici i demografiju Republike Srbije

Advokatska kancelarija Milošević

Law on Financial Support for Families with Children

conditions for realizing the right to funds for the purchase of an apartment

apartment purchase

realizing the right to funds for the construction of a house

housing loans