The Burgenland province is now offering non-profit housing associations the opportunity to prepay their subsidized housing loans with a discount, following a similar offer extended to private homeowners. The move is intended to stabilize rents and free up funds to comply with the budgetary stability law passed in January, Burgenland Governor Hans Peter Doskozil (SPÖ) announced Friday.
A model has been developed in conjunction with the four non-profit housing developers in Burgenland, ensuring that the benefits of the buyback – through rent reductions – are directly passed on to tenants, Doskozil stated. The discount offered is tiered, depending on the remaining term of the loan. Loans with less than five years remaining can be prepaid with a 15 percent discount, those with five to 17 years with 25 percent, and the most recent loans with a longer remaining term with 35 percent.
The offer presents a calculation for the non-profit organizations, according to Alfred Kollar, chairman of the Oberwarter Siedlungsgenossenschaft (OSG). The developers must now identify loans where a buyback makes sense, providing a tangible benefit to tenants. A benchmark of at least 20 euros in monthly rent savings, or 250 euros annually, has been established.
Kollar anticipates around 300 to 400 applications from the OSG alone, and a total of 700 to 800 applications across all associations. Approximately 3,000 apartments and houses within the OSG could benefit from the discount, he said. The monthly interest savings realized by the developers through the early repayment will be directly passed on to tenants.
The offer to private homeowners, launched in January, has already seen significant uptake. Approximately 16,600 applications have been received, representing around 70 percent of private loan holders, Doskozil emphasized. Applications are still being accepted until the end of March, with repayment due by April 30th. The estimated total repayment volume currently stands at 260 million euros, representing a relief of 87 million euros for homeowners.
The province expects around 100 million euros to be generated from the non-profit sector. Housing associations can submit applications until the end of May and have until the end of June to complete the repayment, according to Provincial Councilor Heinrich Dorner (SPÖ). Following this, the province will move to a third phase, initiating the sale of the remaining loans to banks or insurance companies.
The “Burgenländisches Haushaltsstabilitätsgesetz” (Burgenland Budget Stability Law) limits the province’s debt to a maximum of 600 million euros by 2028, according to Doskozil, who stated the principle guiding the policy is “not to spend more than you earn.”
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