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In recent days, the political scene in Poland has been shaken by information about the future of the so-called 0% credit, a program that has been controversial from the very beginning. Although an official decision has not yet been made, a tweet by Katarzyna Pełczyńska, Minister of Funds and Regional Policy, clearly indicates that the future budget does not provide funds for this purpose.

Housing budget is growing, but without credit 0%

In her tweet, Katarzyna Pełczyńska informed that the housing budget has been increased by 50% compared to the previous year, which amounts to PLN 4.3 billion. However, what is missing from the budget is equally important – exactly PLN 0 for financing a 0% loan. The minister also noted that we still have decisions to make regarding the allocation of PLN 1.6 billion of this amount, reserved for housing purposes, but her position is clear: a 0% loan does not deserve any financial support.

We have it! The Polish budget adopted by the government allocates PLN 4.3 billion for housing. That’s over 50% more than this year!

Good news: there is a round PLN 0 in the budget for a 0% loan.

The worse news: we have yet to decide what happens to the reserve covering 1.6 billion of that amount.…

— Katarzyna Pełczyńska (@Kpelczynska) August 28, 2024

The Mieszkanie na Start program was an idea for a support program for young Poles, which was supposed to make it easier to buy their first apartment. In theory, the government wanted to offer mortgages with zero interest, which would mean that the state would cover the cost of interest. The idea was to help young families and singles enter the real estate market more easily, especially in the face of rising housing prices and the difficult credit situation in Poland.

However, from the very beginning, the program was met with criticism from economists, market experts and opposition politicians. The main accusations concerned the potential negative effects on the real estate market and public finances.

First of all, a 0% mortgage could artificially increase the demand for housing, which in turn could lead to a further increase in property prices. Such a situation would be disadvantageous for those who would not be able to take advantage of the program, as well as for the entire housing market, which is already struggling with the problem of housing availability.

Another argument against the program was its cost to the state budget. Covering the cost of interest on mortgage loans is a huge burden on public finances, which could significantly increase the budget deficit. In the context of other social needs, such as education, health care or infrastructure, many experts believed that the funds for 0% loans could be better used.

Katarzyna Pełczyńska: “A 0% loan deserves 0 PLN”

Minister Katarzyna Pełczyńska emphasized in her tweet that the budget for 2024 did not provide any funds for a 0% loan. Her position is clear: this loan does not deserve financial support from the state budget. Instead, the Minister advocates allocating as much of the available funds as possible to social housing, which in her opinion is much more needed and will bring greater social benefits.

The lack of funds for a 0% loan in the draft budget is a signal that the government is abandoning this controversial idea. However, this does not mean that the problem of the lack of affordable housing for young Poles has been solved. On the contrary, challenges in housing policy remain, and the key now will be how the government decides to support this sector in the coming years.

Minister Pełczyńska announced that at tomorrow’s Economic Committee of the Council of Ministers she will firmly defend the increase in financing for social housing. If her position is accepted, we can expect the government to focus on developing social housing programs that have a chance to better meet the needs of citizens than the controversial 0% loan.

Although the official decision has not been made yet, everything indicates that the toxic 0% loan is becoming a thing of the past and the government will focus on more sustainable support for the housing sector.