Europe Economy

Putin promises hard cash, tax breaks and mortgage relief for families with more children

Key Points
  • Russian President Vladimir Putin wants to promote family support schemes in his country.
  • Mortgage relief, tax breaks and cash payments are being promised to encourage bigger families.
  • A promise to end a shortage of childcare at nurseries by 2021 was also made.
Mimi Haddon | Photodisc | Getty Images

Russian President Vladimir Putin has promised tax breaks, mortgage relief and hard cash to support Russian families who produce more children.

Putin used his televised State of the Nation address on Wednesday to outline several measures he claimed would improve living conditions. Focusing on families, the leader said the first way to improve incomes was to reduce to the tax burden.

"The principle should be very simple — the more children you have the less tax you should pay," said Putin.

The Russian strongman told the audience that he wanted to remove 5 square meters of taxable area from a family's residential property for every child that they have. Land ownership up to 600 square meters would also be completely free of taxes.

Families with three or more children will also get one-time 450,000 rubles ($6,840) payment to help trim their mortgages.

"If we add this to the maternity benefit fund which can also be used to pay mortgages, that's 900,000 rubles and in many areas of Russia that will be a substantial amount to housing costs," said Putin.

Russian President Vladimir Putin arrives to deliver his annual state of the nation address in Moscow on February 20, 2019.

At present, families in Russia can apply for two percent discounts on mortgages, with the balance subsidized by the Russian government.

The Russian leader said there had been low uptake as the subsidy only lasted a few years. To applause, he proposed the relief should now be extended to the mortgage's duration.

Moscow has put the cost of the relief at an estimated 30.6 billion rubles in 2020 alone but claimed it would benefit 600,000 homes.

Other announcements included a doubling of benefits for families with disabled children and a rise in the level of allowable earnings to receive existing child benefits. A promise to end the shortage of childcare at nurseries by 2021 was also made.

Earlier this month, Hungary's prime minister Viktor Orban announced a similar move. During his State of the Nation address, Orban announced measures that included waivers on personal income tax for women raising at least four children for the rest of their lives and subsidies for large families to buy larger cars.