Current information on requirements, how much money there is and how to apply
Author: Jascha Buchner
Jascha studied cultural studies and media culture (MA) and already worked as a freelance journalist for the Bremen Weser Kurier during his studies. Today he is a landlord and a tenant at the same time and reports on Hausfrage.de as head of the editorial team and the content team about his professional and private experience around the topics of living, building, financing and renting (Facebook, Xing, email).
The state gives me 12,000 euros to move in?
With the decision made in 2018 by the grand coalition Baukindergeld the state wants to support young families on their way to owning their own home. There is up to € 12,000 per child – if certain requirements are met.
Child benefit for families is now an integral part of home finance. Still, many are asking the same questions:
Am I entitled to child benefit? What are the requirements? In which one Does the state support me? Where are the applications made? Is child benefit paid retrospectively? And what actually counts as a single parent?
Here you will find the answers to all questions about child benefit, what has changed in 2019 and why families in Bavaria can be particularly happy.
What terms and conditions apply to child benefit?
So that you can apply for funding, applicants, the children and the property itself must determine conditions fulfill:
- It may no more home ownership be available in Germany, whether inhabited, vacant or used by usufruct. In a family, this applies to both partners and their children. In many places it is said that the time of application counts. That is wrong! The date of the purchase contract or building permit is decisive.
- The move into the property may not be longer than 6 months be here. If life partners move in at different times, the date on which the first person moved into the new house applies.
- The annual taxable income of the family household may not exceed 75,000 euros plus 15,000 euros per child lie. The decisive factor is the average income in the second and third calendar years before the application is made.
- The children must have been born at the time of application, live in the household, be under 18 and be entitled to child benefit.
- It does not have to be biological children – adopted children are also eligible.
- Whether the children subsequently come of age or move out has no effect on the child benefit.
- A loss of child benefit – for example because the children are turning 25 – does not matter. Only the day on which the application is made counts.
- There is no upper limit for the number of children.
- A subsequent increase by additional children is not possible.
- The property must at least 50 percent belong to the applicant.
- You must for the next ten years without a break be used yourself. Leased residential property or commercial properties are not funded.
- When purchasing an apartment building, the residential unit shared by the family is taken into account.
- Whether buying or building a home does not matter.
- The size and whether it is a detached house, terraced house, a semi-detached house or an apartment does not matter.
- Inherited or gifted real estate is not funded.
- The property must be in Germany.
- The purchase price (excluding incidental acquisition costs) must not be lower than the requested funding.
- Additions and conversions are not funded.
Who does NOT get the child benefit??
In addition to the above requirements, KfW explicitly excludes some cases in an updated version of its information sheet.
Not to be funded:
- Vacation or weekend houses and vacation homes,
- the transfer of home ownership through a (anticipated) succession, testamentary disposition or gift,
- the acquisition or transfer of ownership between spouses, life partners or partners in another long-term partnership,
- the acquisition or transfer of ownership between relatives of a household member in a straight line (children, parents, grandparents, great-grandparents),
- the purchase of residential property that was previously owned by a household member.
What applies when buying a rental apartment?
If you buy your landlord the apartment or house in which you have previously rented, the move-in date does not count as the start of the period, but the date on which the purchase contract was signed.
Child benefit as a single parent – is that possible??
Yes, single parents can also apply for child benefit – the same conditions apply as for couples. So you do not have to live in a partnership to apply for child benefit.
This can even prove to be an advantage, because the same income limit applies as for couples – a household income of 75,000 plus 15,000 euros per child will exceed the fewest single parents.
Can you apply for child benefit when the due date is imminent?
No, KfW expressly points out that one with the Application must wait until after the birth. There is no child benefit for unborn children.
Can you apply for child benefit if you buy the house from your ex-partner after a divorce?
That’s fine. Child benefit is only excluded if there is a relationship with the seller.
What applies to separated ex-partners with shared custody?
If your child lives in equal parts with both parents according to the parity exchange model, support is also possible if your child is registered with you only as a secondary residence.
However, both partners cannot apply for child benefit for the same. Such double funding is excluded.
Online check: Can I apply for child benefit??
In order to be able to test whether you are entitled to funding before submitting the application, KfW offers a practical advance check for building child benefit on its website.
How is household income calculated??
The household’s taxable income is not synonymous with gross income. Further income is added to the wages.
This includes, for example, rental income, parental allowance, maintenance payments or vacation pay.
At the same time, however, special expenses, extraordinary expenses and any allowances can be deducted from the income. Because of the Children’s allowance it may be that your taxable income is below your gross income despite additional income.
You will find your taxable income in your tax assessment. The decisive factor is Average value of the second and third calendar year before the application.
example: You want to submit the application for construction child benefit 2019. To calculate household income, you have to use the income from 2017 and 2016 as a basis. Add up both sums and then divide the result by two. The result is your annual household income.
What about income from abroad?
Income earned abroad is also taken into account. That means you have to submit the respective income tax assessment notices together with a certified translation.
Where are building child benefit applications made??
Until 12/31/2023 the application for child benefit can be made, provided that the building permit or the purchase contract was made between the 01/01/2018 and the 31/12/2020 granted / closed.
Applications are made online in the Grant portal of the KfW posed. To register there, all you have to do is provide your name, email address and password and answer three security questions.
Then fill out the form for the construction child support program KfW 424 out. KfW requires information about you, your property, your children and your income.
You must prove your identity during the application process via the grant portal. This happens either through the Postident- or that Video identification method.
- Post identification: You will receive a coupon to print out. You must present this together with your ID or passport in a Deutsche Post branch.
- video identification: You are visually identified in a video call. To do this, install a special app on your smartphone and follow the instructions on the screen. The identification usually takes no longer than 5 minutes.
You then have 3 months to upload the required evidence to the grant portal.
These documents are required for the application for child benefit
- The Deed as evidence of the acquisition of property.
- The Meldebestätigung as proof of self-use. It must be recognizable here that the property is the main residence for all parties involved (applicant, specified children, spouse or life partner).
- The Income tax assessment the second and third calendar year before submitting the application. The life partner’s notices are also required.
KfW reserves the right to request additional documents proving the funding conditions, such as the purchase contract or building permit or child benefit notices. As long as you receive the child benefit, you are also obliged to keep all evidence and to present it to KfW on request.
Important: If you do not have the required income tax notices yet, please submit your tax return (s) as soon as possible. The processing takes some time.
Once you have uploaded all the necessary documents, KfW will check your application. The speed of this depends on how many applications are currently being received. KfW itself points out that the test "can take some time".
Apply for a child benefit – step by step
Here is a summary of how the application for funding works
- Buy / build property and move in.
- Register in the KfW grant portal.
- Fill out the child benefit form and> at the latest 6 months after moving in
When is the child benefit paid out??
You can only apply for child benefit once you have already moved into your property.
If your application has been approved, you will receive a payment confirmation stating the date of the first payment. You can find these in the grant portal under "My applications". In the following years you will also have your annual amount transferred to your account on this date.
Is the child benefit granted retrospectively??
Yes, if the purchase contract was signed after January 1st, 2018 or the building permit has been issued since then, the child benefit will be granted retrospectively until the relevant day.
However, the same deadline after moving in still applies 6 months.
This can be particularly important for construction projects, since there is usually a significantly longer time between building permit and moving in than between signing the purchase contract and moving in when buying a property.
Can I combine the child benefit with other funding programs?
Yes, this is not only possible, but also highly recommended.
KfW itself offers other funding programs that you can apply for in addition to the child benefit – for example, for energy-efficient or age-appropriate and barrier-free properties.
Overall, however, the funding amount must not exceed the costs for the construction or acquisition of residential property.
Families in Bavaria can do that too Child benefit plus and the housing grants apply – the Free State pays its residents 300 euros a year and a one-off payment of 10,000 euros.
Kfw Bank support programs
On the Kfw website you will find an overview of all possible funding programs as well as a loan calculator.
Different country programs can also be combined with child benefit. You can read everything you need to know about further funding opportunities in our mortgage lending guide: 5 steps to the best real estate loan.
When does the funding end??
If your application has been accepted, you have the child benefit for the full 10 years – as long as the property is still in your possession and you live there yourself.
If you move out or if the house or apartment is sold or rented ahead of time, you must notify KfW and the funding ends. You can of course keep the money received up to that point.
Exception: professional move and child benefit
If you have to move due to work reasons, therefore sell your property and acquire another one at your new place of work, you can apply for your funding to be taken over. You get the same money as before – it doesn’t matter whether your income has changed or whether more children have been added. KfW confirmed this to us on request.
What if my child is no longer entitled to child benefit??
This is irrelevant – it only counts when the application was made.
In the aftermath, it has no effect whether …
- the children are of legal age,
- move the children into their own apartment,
- You no longer receive child benefit,
- You lose custody or
- the children die.
What happens after a divorce??
After divorce or separation, the right to child benefit does not end automatically. It is very important who made the application from the former life partners. This can continue to receive funding.
This also applies if the common property is sold and a new one is bought. KfW gives a “seamless transition“As a condition.
The Bavarian extra sausage: construction child benefit plus and home owner allowance
The regulations on child benefit apply throughout Germany – but there is also a bonus in Bavaria. In addition to the normal child benefit, Bavarian families can apply for the child benefit plus – there is one per child 300 Euro in the year.
In the case of a child, the funding amount increases 1,500 euros in the year resp. 15,000 euros over the full 10 years. The prerequisite is that you have already approved the child benefit from KfW.
But that’s not all: In addition to KfW funding, there is a one-time payment of 10,000 euros possible. The Bayerische Eigenheimzulage is available for families as well as couples without children and singles.
Both extra grants are not applied for via the KfW, but via the Bayerische Landesbodenkreditanstalt (BayernLabo) – click here for the application forms.
The hair in the soup
There is, however, one limitation: The Baukindergeld Plus is only available for one- and two-family houses.
What can I use the child benefit for??
Free money is great, no question – but how should you use it ideally?
Child benefit is not equity
First of all, a big damper: You cannot bring the child benefit into your home finance as equity.
Since you receive the payment annually and not in one fell swoop, it cannot flow directly into your home finance as equity.
Child benefit to repay an equity replacement loan
An equity replacement loan gives you the opportunity to use the child benefit at least indirectly as equity for your construction finance.
In addition to your mortgage, you take a separate one installment loan on. You use the money received as equity for your real estate loan.
This can be useful if your bank requires that you finance the additional costs from your own funds, but you do not have the necessary money.
But beware: Banks charge substantial amounts for conventional installment loans higher interest rates than for construction finance, which increases your monthly burden significantly. It makes sense to get rid of the debt from an equity replacement loan as soon as possible. The child benefit can be recorded as a regular special repayment in the loan agreement and reduce the loan term by several years.
Use child benefit for special repayments
This is the easiest way to use the child benefit in a sensible way. Due to the unscheduled partial repayment of your loan, you reduce your remaining debt and thus also the interest charge.
In any case, this must be clarified with your bank before signing the contract. Special repayments are possible with many loan contracts – but not always free of charge. The bank may charge a premium for this.
Put child benefit in a building society contract
Building savings is no longer worthwhile? That’s not true!
As a purely financial investment, a home savings contract is actually not particularly attractive – unlike a few years ago. Building savings can still be worthwhile for financing a property.
Basically, with this model, you put the child benefit back in order to reduce your remaining debt by the amount saved after the end of your first fixed interest period. In this way you reduce the risk of having to conclude much more expensive follow-up financing due to higher interest rates.
Conclusion: the child benefit is worth it?
Many critics perceive child support as a “drop in the bucket”. Understandable – with the high real estate prices in popular residential regions, the funding does not really make much difference.
In rural or economically weaker regions the bonus from the state should not be underestimated. Logically, the lower the property prices, the greater the impact of the child benefit.
On average, child benefit is therefore a financial aid, especially in Saxony, Thuringia, Brandenburg and Saxony-Anahlt.
This contrasts with the fact that some real estate sellers take advantage of the greater purchasing power and simply add the construction child benefit premium to the selling price, as the Central Real Estate Committee in Berlin announced.
So the child benefit is the solution to the housing shortage?
No certainly not. It is always a welcome support for the new home.
Think about follow-up financing now
One last piece of urgent advice: 10 years is a long time, but a real estate loan running usually much longer.
So keep in mind that you may no longer have the child benefit at the time of the necessary follow-up financing, but that you will have to meet the same – or even a higher – monthly charge due to an increased interest rate.
You can reduce this risk by Forward loans or the variant of a savings contract.
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