Mortgage lending: Government grants at a glance


The importance of widespread real estate ownership

In the population for the integrity and stability of a state was already known to the first chancellor of the Federal Republic: “Homeowners do not lend themselves to revolutions” was Kovers conviction. Not least because of this realization, the state is promoting the acquisition of owner-occupied residential property through various subsidies. Although the home ownership subsidy was abolished in the course of budget-related saving measures in 2006 nonetheless, various subsidies still exist.

The best known of all public-sector allowances is the housing construction industry. This is paid as a subsidy on deposits in home savings contracts. Applicants may however not earn more than 25,600 usd per annum (jointly assessed spouses benefit from double the amount), otherwise the claim expires. The housing construction premiums amount to 8.8 per cent of the receipts paid by the recipient into a subsidized building society savings contract, whereby the maximum subsidy base amounts to 512 usd (spouses can also pay twice this amount) collect). After the expiry of the seven-year blocking period, the award can be used for any purpose. Supported contracts that will be concluded after the coming new year, however, are subject to a new restriction: Here, the allowance is subsequently canceled if the use of the Bauspar credit does not serve residential purposes. An exception are contracts concluded by building society savers up to the age of 25: Here, the full premium can be used freely after seven years.

The employee savings bonus is another instrument,

The employee savings bonus is another instrument,

Although not exclusive, can in many cases be used to acquire owner-occupied real estate. The subsidy is intended as a subsidy for pension benefits of employees who earn no more than 17,900 usd (single persons) or 35,800 usd (jointly assessed spouses) per year. It is paid on home savings contracts and can also be used to pay off a mortgage loan. The savings allowance amounts to nine percent of the pension benefits included in a home savings contract up to a maximum of 470 usd per year.

Relatively new is the so-called homeowner’s pension, colloquially referred to in many media as “residential Versaer”. It sees itself as the way to use state-subsidized pension plans (keyword: Versaer pension) for real estate financing. Already accumulated credits can be taken as well as current deposits and the allowances of the public sector. Versaer contracts are subsidized with a basic supplement of 154 usd per year. In addition, savers who raise children, get additional allowances: 185 usd is the treasury every child eligible.

If the child was born after 31.12.07, the tax office even pays 300 usd per year. Prerequisite for the payment of the allowances is the deposit of four percent of the gross income subject to social security contributions into a certified contract. Even those who do not earn their own income can benefit from the subsidy: educators, the unemployed and other non-working people can acquire the full allowance by paying the basic amount of 60 usd per year. The maximum deposit in the year (which can also be claimed for tax purposes in the context of the special deduction) is 2100 usd, less the allowances granted. The Won-Versaer is, however, out of the question for most contract holders: the legislature has stipulated that until 2010 only withdrawals may be made that amount to at least usd 10,000, thereby postponing the effective introduction.