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Kazakhstanis Will Be Able to Spend Pensions on Housing and Treatment

In 2021 alone, 700,000 Kazakhstanis will be able to capitalize on their retirement savings

Photo: Askar Akhmetullin

In 2021, 700,000 depositors of Kazakhstan’s Unified Accumulative Pension Fund will be able to use part of their pension savings for the purchase of real estate, medical treatment or for transfer of management to financial companies. This was announced by the president of the country, Kassym-Jomart Tokayev, during the government meeting on September 1.

The head of the state reiterated that citizens would also be able to use their retirement accounts for purchase of housing in advance. He instructed the government along with the National Bank to enact all the necessary regulations and carry out preparatory work on that front before the end of the year.

The state will also pay for rental housing of the people on the waiting list, Tokayev said. This aid will be received by over 100,000 families.

Starting this year, the 5-10-20 mortgage program will be in effect. The state has allocated 390 billion tenge, or about $930 million, for this program. To apply for credit housing from akimats (city councils) under this program, a person on the waiting list should have an income above the poverty line but below two minimum wages per family member (below 85,000 tenge, or about $202, per family member).

“We need to solve housing problems of people on the waiting list more quickly. Currently akimats are building rental housing for them independently. Due to budgetary and procurement procedures, this takes additional time. The time has come for this scheme to be changed. Budget funds should be directed not only toward construction but also to subsidize rent. In the first year alone, this measure will cover ten times more people. More than 100,000 families will receive concrete support,” Tokayev explained.

According to the president, work in this area will be carried out by Otbasy Bank which is founded on the basis of the Housing Construction Saving Bank of Kazakhstan. He also noted the slow pace of implementation of the Nurly Zher housing program in terms of private housing construction. This is mainly due to the low rate of territorial infrastruсture development since, under the law, land can be provided only if there is a supply of water and electricity.

“The government and akimats must accelerate infrastructure development of the land plots allocated for social and private housing, including via the public-private partnerships. I request that members of parliament take charge of solving this issue,” Tokayev said.

In May, Minister of Industry and Infrastructure Development Beibut Atamkulov announced that Otbasy Bank JSC would select those in need of housing and improvement of housing conditions based on their income level. According to the minister, the basic idea is that every Kazakhstani who lacks their own housing can apply to the center for the provision of a starter home and get an opportunity to purchase affordable housing in accordance with their income.

Under the 5-10-20 program, the down payment on the loan starts at 10%, the interest rate is 5%, and the maximum loan term is 20 years (hence the name). Housing can be purchased from private developers and in new buildings constructed under the Nurly Zher program. As for the maximum loan amount, it will supposedly be 18 million tenge for Almaty and Nur-Sultan, 15 million tenge for Atyrau, Aktau, Aktobe, Shymkent, Turkestan and the Karaganda region and 12 million for the other regions.

* 1 USD = 419.24 KZT as of September 2, 2020.

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