Record MVR 4.8 Billion Set for Housing in 2025 State Budget

The Maldives government has placed housing at the forefront of its 2025 budget, dedicating an unprecedented MVR 4.8 billion to tackle the country's housing challenges. Presented by Finance Minister Moosa Zameer in Parliament today, the proposed budget underscores the urgent need for affordable and accessible housing as one of the nation's most critical social issues.

Commitment to Housing as a Core Priority

In his address, Minister Zameer highlighted that housing has been designated the top priority in the upcoming fiscal year, aligning with the President’s vision for ensuring adequate living spaces for all Maldivians.

"In preparing the 2025 budget, the highest priority has been assigned to housing," said Zameer, "aligning with the President’s vision for ensuring adequate living spaces for all Maldivians."

This substantial budget allocation is expected to bring much-needed relief to communities struggling with housing shortages and high rental costs, especially in urban areas where demand remains high.

Breakdown of the Housing Budget

Of the MVR 4.8 billion allocated to housing, MVR 1 billion is set aside specifically for housing loans at a favorable 5% interest rate. The government estimates that this allocation will enable banks to extend housing loans worth at least MVR 2 billion, making home ownership and housing accessibility more feasible for many Maldivians.

In addition, MVR 1.8 billion is earmarked for housing-related Public Sector Investment Program (PSIP) projects, which include infrastructure developments and government-led housing projects aimed at expanding affordable housing options across the nation.

“This budget represents the largest single-year allocation for housing in Maldives history,” Minister Zameer noted, marking a milestone for the country’s commitment to addressing housing shortages.

The Full Scope of the 2025 Budget

The total proposed budget for 2025 is MVR 56.6 billion, reflecting an increase of MVR 1.8 billion from this year’s budget, which includes a supplementary allocation. Of this total, MVR 49.2 billion is planned for expenditures, divided into MVR 35.9 billion for recurrent expenses—such as government salaries, education, and healthcare—and MVR 13.3 billion for capital investments, including infrastructure and housing projects.

Additionally, MVR 3.9 billion is set aside specifically for debt repayment, supporting the Maldives’ commitment to reducing its national debt.

Revenue and Fiscal Reforms to Address Deficit

To support these ambitious projects, the government projects revenues and grants totaling MVR 39.8 billion. This includes MVR 4.9 billion expected from new revenue-enhancing measures, which involve increased taxes on tobacco, higher airport tax, and adjustments to the Tourism Goods and Services Tax (TGST) and green tax.

These fiscal reforms aim to address the budget deficit, which is projected to be reduced to MVR 9.4 billion, the lowest in recent years. A smaller deficit signals progress toward more sustainable fiscal policies and a commitment to balancing economic growth with responsible budgeting.