Around 18.000 Austrians emigrate to Germany every year. Often this also includes the purchase of a new home of one's own. That's why we have summarized the most important tips on construction financing in Germany here.
Who would like to build, can receive in Germany in the course of a construction financing a state subsidy. Consumers should consider some points, in order to get the optimal out of this national promotion for itself.
In 2016, KfW, the German Reconstruction Loan Corporation (Kreditanstalt fur Wiederaufbau), which is under the supervision of the German Ministry of Finance, disbursed 16 billion euros more than in the previous year. The subsidy is intended to help consumers build, buy or, for example, upgrade homes in accordance with energy conservation regulations – the latter in particular was a big issue for KfW last year when it came to financial assistance. In addition to financial subsidies, KfW also grants loans with very low interest rates to make it easier for interested parties to build a house. Even those who want to convert a property for reasons of age can apply for a loan from the KfW.
Apply for construction financing in good time
For whatever the government house building subsidy is to be used in detail, consumers should apply for it in good time. There are often a number of bureaucratic hurdles to applying – thus, it requires a willingness to complete some paperwork and invest a little time. So start gathering information about government subsidies in the area of construction financing in good time. A housing subsidy or an employee savings allowance are government subsidy options that must, however, be actively claimed.
But policymakers are not entirely happy with the current subsidy program. Currently, some groups in Germany are calling for better government subsidies, especially for low-income households. Only 45 percent of the people there own their own home, which is rather little in international comparison. Construction financing should make it possible for more people to fulfill their dream of owning their own home in the future. In particular the younger generation must be promoted by the state more, so that also this generation can acquire residential property.
In the future thus some is to change, but also at present national subsidies are quite planned. Various providers also advise their customers about government construction financing and integrate this subsidy program into their rates.
Families can be supported by the Housing Promotion Act
Low-income families can already receive support through the so-called Housing Promotion Act (Wohnraumforderungsgesetz). State subsidies consist in the course of this promotion measure from discounted building land or however from financial subsidies. Also who already owns a property, but would like to expand this, can be supported with a corresponding subsidy by the state. However, certain income limits apply here.
Observe income limits
The annual income (gross) of a two-person household may not exceed 40.712 euro in the year do not exceed (more information under: https://www.nrwbank.de/income limits), each additional member of the household attracts an allowance of 4100 euros, so that in the case of a larger household, housing subsidies can be applied for even with a higher income. If there are children in the household, each child increases the allowance by a further 500 euros. Tax-free income such as child benefit is not calculated on the annual income. This also applies, for example, to child-raising benefits or sickness or accident benefits. It should be noted that the individual federal states may have set different income limits and that a minimum income must also be achieved in order to apply for a subsidy. If there is nothing left to live on after paying off the loans due, construction financing does not make sense.
In general, the following applies when applying for subsidies: Potential applicants should start very early to compile the necessary documents and seek advice according to their personal situation. In addition, a certain amount of equity should already be available before the start of construction in order to be able to handle the financing. By the way, if you're a talented craftsman, you can count your work on the construction site as equity when it comes to applying for subsidies.
Match the loan amount with your own budget
If a loan is to be taken out in the course of construction financing, interested parties should obtain an accurate impression of their financial situation in good time – all household income and expenses must be taken into account in order to determine how much money is available each month to pay off a loan and which property can be afforded.
With it also the determination goes, which height the credit sum is to have. A share of 25 percent of the loan amount should be available as start-up capital already without a loan as equity, experts advise. The development of a financing plan is meaningful with a construction financing, it concerns after all enormously high sums and for most humans around the highest expenditure in their life.
The search for a suitable property can take months
Once these financial conditions have been clarified, the search for a suitable property begins. Of course, you have to plan a longer time for this point, because often interested people find a suitable property only after several months. When looking for a suitable property or a suitable plot of land, not only Internet research can be helpful; in certain regions, interested parties can only find a suitable property through an estate agent.