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PROPERTY

How Germany wants to make it easier for families to own a home

Germany is launching a new loan programme to help families get on the property ladder. Here's what you need to know.

Published: 25 May 2023 13:00 CEST
Updated: 28 May 2023 08:24 CEST
Homes being built in Stuttgart.
Homes being built in Stuttgart. Photo: picture alliance/dpa | Sina Schuldt

Although Germany is known as a country of renters – in 2021 more than half the population (50.5 percent) lived in rented accommodation, the highest share in the EU – many people are choosing to buy their own property. 

And the German government wants to make this move easier for families with children. 

In June, a new subsidy programme called Home Ownership for Families (Wohneigentum für Familien or WEF) is set to launch. It replaces the Baukindergeld system which saw families being able obtain a building permit or buy a property. Through that programme, families could receive a subsidy of €1,200 per child per year over 10 years.

The government said that in 2020 alone, 175,000 families took advantage of the Baukindergeld programme.

READ ALSO: Everything that changes in June 2023

What is the WEF?

At the beginning of the year, Housing and Urban Development and Building Minister Klara Geywitz (SPD) announced that a new property subsidy for families would launch in 2023. However, unlike Baukindergeld, the WEF subsidy is not a grant. Instead, families will receive a low-interest loan.

What will be subsidised?

The ‘Home Ownership for Families’ programme provides funding for the construction or initial purchase of a climate-friendly residential building. People can apply for a loan for the following costs to be subsidised in a residential unit:

  • Construction costs,
  • Costs for specialist planning, construction supervision, sustainability certification
  • Material costs for personal contributions

Families with an annual income of up to €60,000 can apply for a loan from the KfW bank. For each additional child under the age of 18 living in the household, the annual income can be €10,000 higher (so €70,000 with two children, for example).

The government is ploughing in €350 million per year into the project. Applicants can receive a maximum loan of up to €240,000.

The loan applies to new buildings or first-time purchases that meet at least the Efficiency House 40 standard, but not to existing properties. Germany does offer some grants for renovation measures in these cases. 

Reader question: How do I install a heat pump in Germany property?

Applicants must live in the properties themselves, they must be the owner and they cannot have claimed a previous Baukindergeld subsidy.

Anyone interested in the programme should wait until it has launched and all the details are on the table before going ahead with any projects. The subsidy has to be applied for before a delivery, service or purchase contract is underway. 

READ ALSO: What to know about mortgages and fees when buying property in Germany

According to the government, the home ownership subsidy is intended to provide an incentive for the “creation of energy-efficient, high-quality residential property in new buildings”.

What are the interest rate conditions for the WEF subsidy?

The exact interest rate conditions for the programme have not been announced. However, it is known that the subsidy will be granted exclusively in the form of a low-interest subsidy loan and that there will be no direct grants or repayment subsidies. The Housing Ministry is aiming for an interest rate reduction of 2 to 4 percentage points.

The initial interest rate is expected to be announced shortly before the start of the programme.

When will the WEF subsidy start?

The programme is scheduled to start on June 1st, 2023.

How many people own a home in Germany?

According to Statista figures, in 2022 just under 29 million people lived in a house they owned in Germany, 36.9 million rented, while 4.62 million lived in shared accommodation.

READ ALSO: Ask an expert: Is now a good time to buy property in Germany?

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For members

GERMAN CITIZENSHIP

Can people with a German spouse get faster citizenship under new law?

Germany's upcoming citizenship reform will drastically slash the years of residence needed for most foreigners. Does the same apply to people married to German citizens?

Published: 29 April 2024 10:38 CEST
Can people with a German spouse get faster citizenship under new law?

One of the most exciting aspects of Germany’s new citizenship law is the fact that people will be able to get a German passport much sooner after arriving in the country.

Currently, Germany stands out as one of the European countries with the strictest residence rules for citizenship: in fact, most foreigners have to live in the country for a full eight years before they can even consider submitting a citizenship application.

Luckily, that’s all set to change on June 26th this year, when Germany will bring in a set of new – mostly more relaxed – citizenship rules. 

Rather than eight years, most foreigners will have the chance to naturalise after five, and in some exceptional cases, the naturalisation process can begin after just three.

READ ALSO: What you need to know about Germany’s citizenship law reform

This has left some people wondering what rules will apply to married couples after the new law comes in – and specifically those who are married to Germans. Will the residence requirements for this group of people be reduced as well? 

Here’s what we know so far about the government’s plans.

Residence requirements for married couples 

As it stands, the spouses of German citizens already have much shorter residence requirements than foreigners with no German relatives.

If you’re married to a German, you only have to be resident in the country for three years to qualify for citizenship yourself – provided you have been married for at least two.

In some cases, the current law even allows for this period of residence to be shortened if the marriage or civil partnership has existed for at least three years. 

If you have a child with your German spouse, they will automatically be entitled to citizenship under the principle of descent.

READ ALSO: When is my child entitled to German citizenship?

Given that the period of residence required is already so short, the government hasn’t made any changes on this front for married couples in the new law.

This means that in some circumstances, naturalisation may be quicker under the so-called “fast-track” route than via your partner. For example, if you speak C1 German and are well integrated, and only get married to a German after three years of residence, you may be able to apply for citizenship before your two years of marriage or civil partnership are up.

The best people to offer you guidance on this are the advisors at your local immigration or citizenship office. In most cases, they will able to work out if there is a quicker route to naturalisation for you.

READ ALSO: Who qualifies for ‘special integration’ status under Germany’s citizenship law?

What other conditions are there for German citizenship?

Even for the spouses of German citizenship, the general rules for naturalisation will apply. 

That means being able to prove your knowledge of life in Germany via a citizenship test or other means, having a B1 German certificate and having a household income that can support you and your loved ones, as well as demonstrating a clean criminal record.

For more information on the general requirements for German citizenship and when to apply, check out our explainer below:

When and how can I apply for German citizenship?

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