State Subsidies for Real Estate Financing in Germany

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Many people are under the impression that unless their pockets are deep, owning property is an out-of-reach dream. However, financing options for every budget are readily available in Germany. To enable more people to afford a home, the German state and its institutions support home buyers in various ways. For those who are employed, civil servants or self-employed, we have put together an overview of the subsidy options for financing your own four walls.

Wohn-Reister

Wohn-Riester is a form of the very complex Riester subsidy. It is aimed at supplementing private pension with state subsidies. The prerequisite for this is that a portion of your gross annual income must be paid into a Riester contract. Thanks to the allowances, Wohn-Riester helps you repay a loan more quickly in order to live rent-free in old age. The allowances amount to 175 euros per person entitled to subsidies. For children living in the household, you will receive an additional 185 euros if they were born before 2008 and 300 euros if they were born after 2008. Employees who pay into the statutory pension insurance scheme as well as civil servants, soldiers and judges can take advantage of this form of support.

Home Ownership Programme of KfW-Bank

All private individuals, regardless of age and marital status, can apply for a low-interest loan for the purchase of owner-occupied housing from the Kreditanstalt für Wiederaufbau (KfW Bank). Under the KfW Home Ownership Programme, subsidised loans of up to EUR 100,000 are possible. Those who buy a home in particularly energy-efficient new buildings can even expect loans of up to EUR 120,000 and a repayment subsidy of up to EUR 30,000. Supported by the Federal Ministry of Economics and Energy, climate protection is the main focus here.

Baukindergeld

Since 2018, the KfW Bank also pays out the Baukindergeld. Eligible recipients receive EUR 12,000 for each child under 18 living in the household for which they also receive child benefit. The household income may not exceed EUR 90,000 for one child or EUR 15,000 for each additional child. The allowance is paid in ten annual instalments of 1,200 euros each and is intended to make it easier for families and single parents to finance their own home.

Regional funding

KfW-Bank is the world's largest national development bank. But there are also promotional banks at the regional level, which support the acquisition of residential property in addition to federal states, municipalities and even churches. The promotional activities vary from region to region and are largely aimed at making certain areas more attractive for developers and newcomers. While Berlin is the only federal state without subsidies for real estate financing, the Free State of Saxony supports the purchase and renovation of apartments in urban areas such as Leipzig.

Talk to a financial advisor about more detailed information on financing your future home and possible subsidies so that you too can soon start a fulfilled life in your own home.

Written by:

Philipp Müller, Junior Content Manager Deutsch bei EverEstate

Philipp is at home in Berlin and loves to explore the city in all its facets. Here he shares his experiences, new discoveries, and helpful tips with the readers.

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