What families need to know about the new family housing grant

Families are now able to apply for the family housing grant known as “Baukindergeld” – including for property that they bought or built earlier this year. The grant is EUR 1,200 per year and per child. The most important facts at a glance.
Many families dream of owning their own home. But in times of rising property prices, especially in conurbations, it is becoming increasingly difficult for young families in particular to realise this dream. With the new family housing grant, the government is seeking to make it easier for buyers and builders with children to get started with home ownership. The new legislation went into effect on 18 September, and nearly 25,000 applications had already been lodged after about one month.

Who can apply for a family housing grant?

Any family or single parent who acquires residential property in the period between 1 January 2018 and 31 December 2020. It doesn’t matter whether a flat or a house is built or purchased. The cut-off date is the date of the purchase contract or of the building permit or building notification.

Important: Only the initial acquisition is subsidised. People who already own a home are ineligible.

How much is the grant?

The amount of the grant is determined by the number of children under the age of 18 who, at the time the application is lodged, are living in the household and for whom there is an entitlement to a child allowance. The government pays EUR 1,200 per year per eligible child for a period of up to 10 years. In other words, a family with three children can receive a grant amounting to EUR 36,000. One small restriction: Children who are born after the application is lodged do not count toward the grant.

Also note: The grant instalments are disbursed annually. This means that families need to bear in mind for financing purposes that the entire amount of the grant is not directly available to them, e.g. for the down payment at the time of purchase. Rather, the monies help with mortgage payments or for acquisitions or building work that becomes necessary at a later date.

Are there income limits?

Yes. The family housing grant is available only to families with a taxable annual income of up to EUR 75,000, plus a tax-exempt amount of EUR 15,000 per child. In other words, the taxable income of a family with two children may not exceed EUR 105,000.

In calculating income, the authorities use the average income from the second and third years preceding the lodging of the application. Thus, anyone who lodges an application this year has to total the income of both parents for 2016 and 2017 and then divide by two. Families have to prove their income by submitting income tax returns.

How do families apply for the family housing grant?

You can apply for your grant online by logging in to the KfW grant portal – but not later than three months after moving into your home. Important exceptions:

If you are buying a property that you had been renting up to that point and are therefore living in it, you must lodge the application not later than three months after signing the purchase contract.

In the case of families who moved into their home prior to 18 September 2018, it is sufficient if the application is lodged by 31 December 2018.

What does the special arrangement in Bavaria mean?

Bavaria is topping up the family housing grant by an additional EUR 300 (called “Baukindergeld plus”). Families can download the application from the website of the Bayerische Landesbodenkreditanstalt. The monies are disbursed after KfW disburses the federal family housing grant. For more information, please visit: www.baukindergeld.bayern.de

Can this family housing grant be combined with other subsidies?

“The family housing grant will encourage many young families to invest in their own home,” says Marc-Philipp Unger, Head of Properties and Financing at MLP. But subsidies notwithstanding: “The financing of the property must always be planned in a holistic, solid manner.” MLP advisors help their customers in making the calculations and in finding the right loan agreement.
This article was published in german language from MLP. You can read the original article here.