Thursday, June 18, 2020

A Place To Call Your Own

It is every family's dream to own a house. Who wouldn't? Instead of paying rent, you could pay for the mortgage instead until you have completed it and in the end, you wouldn't need to worry because it will be finally yours. But owning a house or an apartment or a flat for that matter is not always easy. Banks or lending authorities tend to have high interest rates. Or the government doesn't have any programs supporting interested buyers.

In our case in Germany, the KfW and the Federal Ministry of the Interior offer funding for construction and home. This benefit is a subsidy to families, couples with children and single parents - with the aim of being able to build home owndership. They call it the Baukindergeld, literally translated to "construction child benefit."

The benefit is paid for a period of 10 years and valid for contracts of sale or building permits signed or dated between 01 January 2018 until 31 December 2020. This means that if you bought a house or planning to construct a new one, the contract of sale or the building permit must be dated within this period.

Prerequisites for the benefit include the following:
1. For families, partners or single parents with children below 18 years old
2. A total annual income of maximum €90.000 for families with 1 child, plus €15.000 for each succeeding child
3. The beneficiaries live in the house themselves and does not rent it out.
4. The property should be located in Germany. It does not matter which nationality you have as long as you are a resident here.

How Does it Work:
1. Move In - As soon as you have moved into your own home, you need to register at your district registration office. You will need the resident registration confirmation later on, as proof of your moving-in date.
2. Apply for Subsidy - Apply for the subsidy within 6 months from date of moving in. All members of the family should be registered with the registration at the time of online application.  If you still have an unborn child, then you can wait until the baby is there and exhaust the 6-month application period. The new member of the family can only be included in the application if he/she is already born.
3. Prove your Identity - Right after the online application, you will receive an application confirmation in the KfW-Subsidy portal under "Meine Zuschussanträge" (My Subsidy Applications). You can then prove your identity via video identification (recommended) or with the Post-Ident procedure in a Deutsche (German) Post branch.
4. Upload Documents for Verification - If your application for subsidy is confirmed, you now have 3 months' time to upload verification documents in the subsidy portal. Past this period and your application is invalid and you will not receive any subsidies. The documents that you need are: Einkommensteuerbescheide (income tax assessments), Meldebestätigung (resident registration confirmation), and the current Grundbuchauszug (land register).
5. Receive Subsidy - After successful verification of your documents, you will receive the subsidy directly credited to your nominated bank account. You will receive a payment confirmation from the KfW and can find it under "Meine Anträge" in the subsidy portal. On the payment confirmation you will see when the first payment will take place. You will receive the subsidy payment for a period of 10 years at €1.200 per child per year, as long as you live in the house that you registered for at the KfW. Should you move to another place or you have decided to rent your place out, you are obligated to inform the KfW about this. This is because you no longer conform to the prerequisites of the subsidy and you will no longer be receiving the subsidy payments.

Have you tried applying for this subsidy? What are your experiences? Please do leave me a comment, I would love to hear and learn more from you.

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