In three months, almost 50,000 families have applied for child benefit. For their 82,865 children, up to a billion euros could be due. If a similar number of applications are submitted in 2019, money will be scarce.

The Baukindergeld supports the parents when they buy, not the storks when they deliver.

DThree months after the introduction of the Baukindergeld, 47,741 families in Germany applied for the benefit to help them buy their own home. This emerges from the figures from the KFW banking group responsible for funding applications and the Federal Building Ministry, which are available to the German Press Agency in Berlin. With 10,728, most of the applications so far came from North Rhine-Westphalia, followed by 6407 in Baden-Württemberg and 6039 Lower Saxony. Currently, around 3,000 applications are made every week, it said.

The Baukindergeld, which is similar to the previous home ownership allowance, can be applied for since September 18th. Every year there is a funding volume of around three billion euros – it is one of the largest new projects of the grand coalition of the Union and the SPD to help families buy their own apartment or house in the face of rising real estate prices. Despite the great demand, it is assumed that the funding volume will be sufficient, it said.

Money could be tight

So far, a total of 82,865 children have received a new home with the help of the Baukindergeld. Most families who have applied have one or two children. The fewest applications were made in Bremen (419). In the other city-states of Hamburg and Berlin, too, few applications were submitted with 480 and 725, respectively. Interest in the Saarland is also low, with 736 applications.

If as many applications are made in the coming months as there are currently, it could be tight in the coming year. The money is distributed according to the “greyhound method”: when the annual funds are used up, they are used up. The federal government does not follow suit.

1200 euros per child and year

For the construction of a house or the purchase of a property, families receive a government grant of 1200 euros per child and year – over the funding period of ten years there is therefore 12,000 euros for each child. For the 82,865 children, up to one billion euros could be due over these ten years.

The Baukindergeld is granted to families and single parents up to a limit of 90,000 euros taxable household income per year for one child. For larger families, the limit per child can be 15,000 euros higher.

All parents or single parents who have signed a purchase agreement or received a building permit since January 2018 can submit an application. Anyone who has moved into their own home by the end of September this year must submit their application by the end of December in order to receive the grant. Funding can be applied for for the last time when a building permit is granted or a purchase contract is signed at the end of 2020.

Payout will not start properly until March 2019

The funding period is therefore three years. Applications can be submitted to KfW no later than three months after moving into the property online via the KfW grant portal. Due to the technical structure of the program and the only then possible uploading of documents such as income tax assessments, registration certificates and land register excerpts, the payout should not really start until March 2019.

Federal Building Minister Horst Seehofer (CDU) said the project would lower the financial burden and enable many families to take the step into home ownership. “Also as a security in old age.” Ingrid Hengster, member of the board of the KfW banking groups, said that the high demand shows that the subsidy program is “in tune with the times”.

The SPD sees the project rather critically, as many high-income families who want to buy anyway receive a subsidy at the expense of all taxpayers. The Union argues that if families increasingly move from rented apartments to their own house or apartment with the help of Baukindergeld, the rented apartments would be free for others. In addition, it will strengthen old-age provision. The Greens, on the other hand, predict that this will further increase property prices. The FDP calls for lowering the state ancillary purchase costs instead of the subsidy – through an exemption from the real estate transfer tax. Because this state tax often eats up all the construction child benefit when buying.