This is what the new Baukindergeld looks like

The grand coalition has agreed on the introduction of child benefit for families. FAZ.NET calculates for whom this is particularly worthwhile.

The Baukindergeld can be worthwhile - depending on where you lay the foundation stone.

NAfter an unexpectedly bumpy final spurt, one of the most important projects of the grand coalition is through: The Baukindergeld comes as originally agreed. With retroactive effect from January 1, 2018, families will receive 1200 euros per child and year for the purchase or construction of a property over ten years. However, this only applies to those with a taxable household income of EUR 75,000, plus EUR 15,000 exemption limit per child. A later, surprisingly decided cap on the number of square meters to 120 square meters, the coalition tipped again, there should now be an application deadline until the end of 2020. This should keep the planned financial framework of two billion euros.

With the Baukindergeld, the Union puts a hook behind one of its election promises: With the funding, it wants to help young families to realize their dream of having their own four walls. The SPD grudgingly agreed to the cash injection in the coalition negotiations. She complains that even low-income workers who are unable to buy an apartment despite the subsidy indirectly pay the benefit through their taxes.

Opposition and citizens are skeptical

The Baukindergeld has also received harsh criticism from the Greens (“housing policy nonsense to the power of three”) and the FDP (“waste of billions”). The Free Democrats are calling for the subsidy to do nothing to counter the “rental madness” in the cities, the Greens complain that it would be better to reduce the tax burden and create an allowance for the property transfer tax.

Take part!  The series “New Houses” is looking for candidates again

Take part! The series “New Houses” is looking for candidates again

The popular series of the Frankfurter Allgemeine Sonntagszeitung and the FAZ.NET editorial team starts for the eighth time. This year, too, we are looking for new residential buildings from private builders that impress with their architectural quality and a coherent concept.

Learn more

Many citizens are also not convinced of the effect of the grant. Every second person doubts that state subsidies will make buying a house or apartment more attractive. Only about one in three counts on advantages, as a representative survey for the Central Real Estate Committee shows. Especially in very densely populated regions, people do not believe that the federal government’s plan will work. But reticence also prevails in the countryside.

Especially worthwhile in East Germany

So is the Baukindergeld purely symbolic politics, a toothless tiger? A small calculation: A family of four would like to buy a property with more than 80 square meters and four rooms. Your gross household income is below the limit of 75,000 euros plus 30,000 euros for the two underage children. According to the conditions agreed by the government, she will receive a grant totaling 24,000 euros over a period of ten years.

Sounds pretty good at first, at least when the family is looking for an apartment or a house in Thuringia in the Kyffhäuserkreis. According to calculations by Immowelt.de, the average purchase price (excluding incidental purchase costs) for a property there of 80 square meters was 47,000 euros last year. With the Baukindergeld, the family could cover half of the cost of their own home. The subsidy is also worthwhile in Saxony-Anhalt, for example in the Harz district. There the family would get 25 percent of the costs from the government for an average purchase price of 100,000 euros.

In general, the quota for the new federal states is impressive: the average purchase price for a property that meets the requirements of our sample family in the federal states of Thuringia, Saxony, Saxony-Anhalt, Brandenburg and Mecklenburg-Western Pomerania is around 133,000 euros. The Baukindergeld there relieves the family of an average of 18 percent of the cost burden. In West Germany, where a property of 80 square meters or more costs an average of 237,000 euros, the state only pays ten percent of the purchase price.

Are there any new apartments?

With a view to the metropolitan areas, the rate continues to decrease. In the five largest German cities of Hamburg, Berlin, Cologne, Frankfurt and Munich, a corresponding property cost an average of 366,000 euros last year, which means that the subsidy of 24,000 euros would only make up around six percent of the purchase price. The people of Munich benefit least, who save only 4.5 percent of the purchase price with the construction child allowance at an average price of 525,000 euros. Not surprisingly: In the Bavarian district of Starnberg, funding is a drop in the ocean with average property prices of 895,000 euros.

Now, of course, there is also the option of actually using the Baukindergeld for building a house. The land transfer tax averages 5 percent nationwide and in many places is likely to eat up a large part of the child benefit. In Berlin, where the real estate transfer tax is 6 percent, a property price of 600,000 euros would result in 36,000 euros – and our family’s 24,000 euros funding would not even be enough for that.

In cities where the reason is scarce, the Baukindergeld even threatens to become a “purchase child benefit”, as criticized by the German Tenants’ Association. Buying existing condominiums or converted rental apartments will not relieve the housing market. “On the contrary: there are no new apartments, instead the conversion of rental apartments into condominiums is encouraged and prices rise.”