Families with low and medium incomes will be able to obtain low-interest loans from the development bank KfW for the construction of a new climate-friendly house from June. For this, an interest rate of 1.25 percent will be called, said Construction Minister Klara Geywitz (SPD) on Wednesday in Berlin. This is significantly cheaper than the market interest rates of currently around 3.5 percent for loans with a ten-year fixed interest rate. The details of the funding have been finalized in recent days.
The subsidy is considered the successor to the Baukindergeld. They can be received by families with one child and a taxable annual household income of up to 60,000 euros. For each additional child, the limit increases by 10,000 euros. The house must be inhabited and built according to strict climate protection criteria. In large families, a maximum of subsidized loans of 240,000 euros are possible.
Up to 350 million euros are available for the programme. The Federal Government's goal is to increase the homeownership rate. In order for Germany to achieve its binding climate protection targets in the building sector by 2045, only new buildings with a low CO2 footprint over their entire life cycle will be funded, according to the Ministry of Construction.
What exactly is funded?
Funding is available for the construction of new buildings as well as the initial purchase (within twelve months of acceptance in accordance with § 640 BGB) of newly constructed climate-friendly and energy-efficient residential buildings that meet the energy standard of an Efficiency House 40 for new buildings and the requirement of greenhouse gas emissions in the building life cycle for the new construction of residential buildings of the Sustainable Building PLUS (QNG-PLUS) seal of quality. Only residential buildings that fall within the scope of the currently valid Building Energy Act (GEG) after completion are eligible for funding. The levels "Climate-friendly residential buildings" and "Climate-friendly residential buildings - with QNG" are funded
The object of funding is a maximum of one residential unit. Only private individuals who wish to build or acquire an eligible residential property for their own use are eligible to apply. This is any natural person as the sole applicant or any eligible household who would like to acquire at least 50 percent (co-)ownership of owner-occupied residential property and whose household has at least one biological or adopted child who was born at KfW at the time of receipt of the application and has not yet reached the age of 18
These income limits apply
The taxable annual household income may not exceed the limit of 60,000 euros for one child, plus 10,000 euros for each additional child. The funding is provided as project funding in the form of share financing as a loan with interest subsidies from federal funds. The total expenditure for the building, the services of specialist planning and construction supervision, including services for life cycle analysis or sustainability certification, are eligible. In the case of personal contribution, the expenses for the material are eligible.
Up to 100 per cent of the project's eligible expenditure will be financed within the limits of the following maximum loan amounts. The maximum loan amounts are determined by the planned building standard and the number of children who live in the household of the applicant or their spouse or partner living in the future household and who have not yet reached the age of 18 at the time of application. A maximum of one residential unit is funded in this product.
Criticism of Interhyp's funding programme
Jörg Utecht, Chief Executive Officer of the Interhyp Group, expressed his satisfaction that the Baukindergeld will be continued as part of a new KfW subsidy. "The homeownership rate in Germany is one of the lowest in Europe, but property ownership can be a foundation for wealth accumulation, financial security in old age and effective protection against inflation."
However, the eligibility conditions have changed significantly compared to the former Baukindergeld. According to Interhyp, the new home subsidy has become much less attractive for families. "Compared to the previous Baukindergeld, there is a significant reduction in the income limit of around 30,000 euros for a family with one child," says Jörg Utecht. The subsidy of 1,200 euros per child per year for ten years has been cancelled in the new programme without replacement. Instead of the subsidy, low-interest loans can be taken out in the new program.
From Interhyp's point of view, the reduction of the upper income limit poses two challenges: "On the one hand, a relevant target group, namely all families with an annual income of between 60,000 and 90,000 euros for one child, falls out of the program. On the other hand, the federal government is launching a program for a target group that already has to cope with more costs with its scarce resources than in the days of the Baukindergeld, namely the sharp rise in the cost of living, real estate prices and construction costs as well as a significantly higher interest rate level. The chance for these families to build a property or to acquire it a maximum of one year after completion has become smaller today than it was then." In addition, the requirements for climate-friendly residential buildings are associated with considerable costs.