Housing bonus: there will be more money from 2021!

With the new housing subsidy, there will soon be significantly more money from the state for many who are saving for their own home. The funding can be used for the construction or purchase as well as for the renovation or modernization of an existing property. In addition, more people in Germany will benefit from home ownership subsidies in the future.

Who will receive the housing bonus?

The housing subsidy, introduced back in 1952, supports those who save money to buy, build or renovate a residential property. With the amendment coming into force from 2021, more building society savers will receive the state allowance, as the income limits have been raised significantly.

How much house building premium do I get?

If you pay in up to 700 euros a year on a building society loan agreement, you will receive a home construction premium of 10 percent on this savings amount from 2021 – i.e. up to 70 euros. For married couples, the eligible amount is twice as high at 1,400 euros. In this case, the improved home construction premium brings 140 euros per year. In both cases this corresponds to an increase of over 50 percent. Thus, the new home construction premium is a good compensation for the currently relatively low interest rate on the home savings credit. The other good news: Anyone who concludes a home loan and savings contract today will also receive the improved home construction premium from 2021. It is therefore worthwhile to lay the financial foundation for your own property now. Improvement of the home construction premium from 2021.

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What can I use the improved home construction premium for?

Nothing changes with regard to the possible uses: The accumulated housing construction premiums are only available for contracts concluded from 2009 if the money saved is later invested in residential purposes, i.e. in the construction, purchase or modernization of residential property. The only exception: after seven years, young people under the age of 25 can freely dispose of the entire balance, including the house building premiums. However, every saver can only make use of this special regulation once in their life – even if they have already signed their second home loan and savings contract at the age of 25.

If you want to finance a property directly, you can also benefit from the improved home construction premium, in this case with a combined home loan and savings loan: You take out pre-financing that you do not have to repay at first.

Instead, your payments, including the home construction premium and, if applicable, the employee savings allowance, flow into a building society loan agreement as savings benefits. This then replaces the pre-financing with the allocation. The payments for the contract are eligible up to the allocation within the framework of the above-mentioned maximum limits.

What are the income limits for the improved home construction premium?

In addition to earmarking, the income limits are the second important prerequisite for receiving the improved housing construction premium. They are currently 25,600 euros for singles and 51,200 euros for married couples. From 2021, the limits will rise to 35,000 and 70,000 euros respectively. Important to know: The basis for calculation is the taxable income, the magnitude of which you can find in your last tax assessment. Your gross income may be significantly higher, because several items such as income-related expenses – for example for trips to work – and possibly various special expenses are deducted from this in order to determine the taxable income. Certain insurance contributions, pension expenses or child allowances are also taken into account.

How do I apply for the housing subsidy?

At the beginning of each year, all building society customers automatically receive a home construction premium application for the previous year. You must fill out and sign this application and submit it to your building society. You can apply for the home building premium retrospectively for up to two years – that is, your application must be submitted by December 31, 2019 if you want to secure the home building premium for the payments made in 2017 on your home loan and savings agreement.

Your contact person on this topic:

Gabriele Runk

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