The new German Home Ownership Programme is the right step towards having and promoting the building and buying of climate-friendly buildings in Germany. The introduction of the New KfW Subsidies for Families Programme this June will likely encourage people to do their bit towards leaving a better and healthier world for the coming generations.
Moving on to the news in question, with the new “Home Ownership for Families” (programme number 300), the German Government, as discussed earlier, is keen to extend its support to families to purchase newly built properties or build new homes for their use.
The low-interest-funded loan programme is planned to make it easier for families with medium incomes to fund a newly built home for personal use. A precondition for the subsidy is that the new construction should be predominantly climate-friendly.
KfW combines family promotion with climate protection necessities.
At a time when the rates of construction interest are ballooning, construction expenses jumping, and the cost of land is heading north, funding a new building is a BIG issue. This is particularly a fact for families. One major reason could be that high living expenses frequently happen together with fewer number of job opportunities for either one or both parents.
The magnitude for systematic repayment of a property loan isn’t too high, particularly for the families having low and medium earnings. Besides, the important subject of climate protection is also growingly becoming vital in the matters of building and accommodation.
To attain the globally set climate goals, it’s required that buildings produce less CO2 emissions across their whole life cycle–right from construction and use to likely pulling down. Significantly, several people nowadays accord high value to living as climate-friendly as possible; for instance, by heating their homes using renewable sources of energies.
Q. Home Ownership for Families: Who Can Apply?
Those private individuals can apply for the programme,
- who construct a new climate-friendly residential structure or procure a climate-friendly new building for the first time within 12 months of acceptance of construction,
- who use the subsidised new building as proprietors (not less than half co-proprietorship) themselves for residential objects,
- who don’t have their own home at the time of application, and
- who have a minimum of one child up to the age of 18 residing in their home,
- who haven’t used the “Baukindergeld” subsidy scheme, which has been terminated.
Q. What are the Income restrictions for the funding?
As mentioned earlier, the new programme targets families with medium incomes. So, income limits have been fixed: The taxable yearly family income of the candidate and their spouse or partner, residing in the future family, may not exceed EUR 60,000 for one kid, plus EUR 10,000 for every extra kid.
As per the respective income tax assessment notices, the average values of the second and third calendar year prior to applying are critical. Hence, if you apply this year, the average value from the earnings of the years 2020 and 2021 will be made use of. For instance, a family with two kids may have a taxable income (in German: “zu versteuerndes Einkommen”) of EUR 70.000. This denotes a gross income (in German “Bruttoeinkommen”) of close to EUR 110.000 is the maximum you have permission to have.
The added condition for new construction funding for families– as mentioned earlier–is climate friendliness.
As part of the “Climate-friendly new construction” promotional scheme, launched this year in March, KfW has come up with new requirements for advancing new buildings. These also are applicable to home proprietorship for families.
- Compliance with limits involving greenhouse gas emissions across the building’s life cycle.
- Attainment of the KfW Efficiency House Standard 40
- Use of renewable energies for the purpose of heat generation.
Although sustainability certification, in accordance with the Sustainable Building Quality Seal, isn’t an obligatory prerequisite for funding, it does boost the highest amount of loan.
Q. How much is the subsidy?
The “Home Ownership for Families” Programme is a subsidised loan programme with low, cut-down interest rates. The maximum loan amount is based on the figure of kids and the fact that the climate-friendly new building gets certification for sustainability.
Beginning in June, interest rates start at 0.01% for a 10-year loan with higher repayments AND a maximum of 1.26% for a 35-year loan with lower repayment.
A family with two kids constructs a climate-friendly new building without sustainability certification and may submit an application for a subsidy of not more than EUR 140,000.
A family with 5 or more kids that gets the certification for its climate-friendly new building may get a loan of not more than EUR 240,000.
In most cases, the new programme only takes care of one part of the funding. For the rest of the amount, you may use everyday construction financing products from your bank, or any different KfW programme, like the Home Ownership Programme, for example.
