Under certain conditions, you can receive government funding for both new construction and the purchase of used residential property. What subsidies are available and who gets them.
The most important thing in brief:
- Government support can take different forms – from government subsidies and tax advantages, to reduced interest rates, to non-repayable grants.
- Check whether you can benefit from Wohn-Riester, a low-interest loan from KfW, funding from BAFA for renewable energy or regional funding programs for your building project.
- Government funding is possible not only for purchases but also for construction projects or modernization measures.
- Find out about possible funding early on. You often have to apply for this before the start of your planned measures.
Depending on the offer, the support comes either in the form of government subsidies and tax advantages, reduced interest rates or as a non-repayable grant.
Residential Riester
House and residential owners who use their property themselves can take advantage of the Riester subsidy. The reform of the home pension has made Riester funding more flexible. In principle, everyone who is compulsorily insured in the statutory pension insurance, as well as civil servants, for example, is entitled to the Wohn-Riester subsidy. All those eligible for Riester funding receive the same allowances and tax advantages for repaying their real estate loan as for a classic Riester savings contract and can therefore advance their debt reduction more quickly.
Residential Riester savers can now use their savings at any time to pay off the debt on their property. Either at the beginning as equity for the purchase or construction of your own four walls or during ongoing financing to make special repayments, if the loan agreement allows this. However, the funded amounts must be taxed at retirement age, and there are a few other rules that must be observed, for example when selling the property. It is therefore advisable to obtain thorough information in advance and check whether this funding model is an option.
Low-interest loan from the Kreditanstalt für Wiederaufbau (KfW)
The Kreditanstalt für Wiederaufbau (KfW) offers low-interest loans as part of the home ownership program as well as optional special interest discounts or subsidies when building one particularly energy-saving house or if appropriate energetic renovation. The loans are passed on to KfW via the house bank as a so-called “transmitting bank”.
Detailed information about all of these funding opportunities can be found on the KfW website.
BAFA: Funding for renewable energy
The Federal Office of Economics and Export Control (BAFA) is a sub-authority of the Federal Ministry of Economics and takes care of the funding required for the Generation of renewable energy be distributed. These primarily include wood pellet heating systems, thermal solar systems and heat pumps.
The funding usually takes place as: non-repayable investment grantthe amount of which depends on the performance of the systems. Details are described on the BAFA website.
Regional funding programs for construction projects
Individual federal states and municipalities have launched a large number of regionally limited funding programs, the funding purposes of which can be very different – the spectrum ranges from concessional loans for lower-income households above Leasehold offers for young families through to our own additional support programs environmentally friendly building.
Tip!
The consumer advice centers, together with KfW, have set up an online database on the Internet that also provides information about regional funding programs. However, you should find out in good time whether you can expect funding for your planned project or not.
As a rule, construction or modernization measures can only begin once funding has been approved.
