Home Ownership

The Eigenheimzulage is a state benefit in Bavaria that promotes owner-occupied housing. It was introduced on July 1, 2018. You can apply for the last time on December 31, 2020.

Former federal home owner allowance

The Eigenheimzulage was one of the largest state subsidies in Germany , with which from October 26, 1995 to December 31, 2005, the creation of owner- occupied housing could be promoted. In 2004, around € 11.4 billion was spent on this. Since January 1, 2006, the home owner's allowance for new cases is no longer granted. All matters still covered by the funding up to December 31, 2005 remain unaffected.

The home ownership allowance is still granted for the full funding period if the notarized purchase contract was notarized or construction of the apartment began before January 1, 2006 .

• If the apartment was acquired or built before January 1, 2004, the home owner's allowance amounts to 5% of the cost of building the apartment, a maximum of € 2,556 for new buildings or 2.5% of the cost of the apartment, and a maximum of € 1,278 for old buildings, plus in both cases € 767 for each child.
• If the apartment was purchased or built between January 1, 2004 and December 31, 2005, the home owner's allowance amounts to 1% of the purchase or production costs of the apartment annually , up to a maximum of € 1,250 plus € 800 for each child.

Legal basis

The legal basis for the home ownership allowance is the Eigenheimzulagengesetz.

aims

The Eigenheimzulagengesetz (Eigenheimzulagengesetz) was intended to re-regulate the previous tax-related subsidies for owner-occupied apartments and to convert the subsidy, which had been designed as a deduction from the income tax assessment base up to that point, to a subsidy independent of progression. At the same time, the family-related additional funding and savings funding according to the Housing Construction Premium Act should be improved.

requirements

Unrestricted taxpayers within the meaning of the Income Tax Act are entitled to a home ownership allowance for a maximum of eight years if they:

• an apartment in Germany , the European Union or the European Economic Area without Liechtenstein purchase or manufacture ,
• use the apartment for their own residential purposes or leave it to a relative within the meaning of § 15 AO free of charge for residential use,
• the sum of their positive income does not exceed a certain amount and
• the object consumption has not yet occurred.

flat

The beneficiary is (according to § 6 Abs. 1 EigZulG) the construction or purchase of an apartment in one's own house located in Germany or in one's own condominium located in Germany . The definition of housing under valuation law is decisive, i. H. The residential unit must be structurally completed, have its own entrance, have a minimum size (according to established case law at least approx. 25 m²) and have the necessary ancillary rooms, such as kitchen and bathroom, which are necessary for running one's own household.

A holiday or weekend apartment or an apartment for which a (even partial) depreciation for wear and tear is deducted as business expenses or business expenses in the context of double housekeeping is not funded.

inland

According to the wording of the law, an apartment abroad was not funded. However, the EU Commission saw this as a violation of EU law and sued the Federal Republic of Germany in the context of infringement proceedings before the European Court of Justice. The EU Commission was of the opinion that apartments and houses in other EU member states should also be subsidized. The European Court of Justice confirmed this in a judgment of January 17, 2008.

Acquisition / production

In Complete is an apartment when benefits and burdens are transferred to the transferee. The allowance is excluded if purchased by the spouse. An apartment is manufactured when it is ready for occupancy , i. H. when the essential measures have been carried out (supply and disposal connections, doors and windows, heating, sanitary facilities and cooking facilities).

The amount of the home owner's allowance is based on the amount of the acquisition or production costs of the apartment you use yourself ( Section 255  HGB) including the associated land .

Use for own residential purposes

The apartment must be used by the civil or beneficial owner for their own residential purposes. Use for commercial purposes or rental for residential purposes is harmful. The entitlement to the owner-occupied home allowance arises when use for own residential purposes begins and ends when use for own residential purposes ends.

The free provision of an apartment to relatives within the meaning of § 15 AO is treated as a use for one's own residential purposes. Payment of consumption costs (water, electricity, ...) to the owner is not a hindrance to obtaining the subsidy.

However, according to the established case law of the Federal Fiscal Court, free of charge within the meaning of Section 4 sentence 2 of the EigZulG is only a rental of accommodation for which no remuneration is paid; any consideration of any type and amount is detrimental to funding. The consideration must therefore not have any economic connection with the rental of the apartment, whereby this is assessed according to the overall picture of the actual circumstances.

Income / income limits

The sum of positive income from the last two years may:

• single persons € 70,000,
• for married people € 140,000
• plus € 30,000 per child

do not exceed ( § 5 EigZulG).

Income in the “first year” (ie in the first year in which the allowance is paid) and in the previous year is decisive. If the income in the year in which you move in and the year before is above the limit, but later below, you can apply for home ownership allowance for the remaining years of the funding period from this point in time.

Property consumption

Singles can the home owner only for an object , Married, in which the conditions for joint assessment under the Income Tax Act are present, take two objects to complete.

Who earlier

• an increased deduction for wear and tear according to Section 7b of the Income Tax Act or
• an increased deduction for wear and tear in accordance with Section 15 (1) to (4) of the Berlin Promotion Act
• Deductions according to Section 10e of the Income Tax Act
• Deduction amounts according to § 15b of the Berlin Promotion Act
• a tax advantage for the same home from another state or
• ever a home owner

has used up his entitlement to the owner-occupied home allowance.

If the property has not been used before, spouses can claim the home owner's allowance twice.

Objects owned by both spouses lead to the fact that the property is consumed for both spouses once the prerequisites for joint assessment (e.g. separation) no longer apply. Alternative: a spouse transfers his share to the spouse in the year of separation. In this case, there is no object consumption for the transferring partner.

Funding periods that are not fully used can be transferred to another owner-occupied apartment until the eight funding years have been fully used if the notarized purchase agreement was concluded before January 1, 2006. A transfer to a follow-up object has been excluded since this date.

Details on the home ownership allowance 2004/2005

• Duration of funding: eight years

The funding period always begins in the year of acquisition or completion. However, the allowance is only paid if the requirements (see above) are met. If you do not move in in the first year or if the income limit is not reached until later, the effective funding period is correspondingly shorter (so-called New Year's trap)

• 1% of the acquisition or production costs , up to a maximum of € 1,250 per year (basic funding amount)
• Child allowance per child: € 800 per year. The prerequisite for the payment of the child allowance is that the child has been paid child benefit for at least one month in the funding year and the child lives in the same household as the applicant. The home owner's allowance is paid within one month of the notification of the decision in the first year. In the following years, the payment is always made on March 15th.

If the conditions for granting the support change (e.g. the birth of a child), the allowance must be re-determined from this year on. If the prerequisites for funding are not met during the calendar year, the notification of the allowance will be changed with effect from the following year.

According to § 17 EigZulG, the owner-occupied home allowance is also set for the acquisition of cooperative shares: The beneficiary can claim the owner-occupied home allowance once for the acquisition of business shares of at least € 5,000 in a cooperative registered in the cooperative register after January 1, 1995, if he At the latest in the last year of the funding period the use of a cooperative apartment for one's own residential purposes begins (change in law, which - from a fiscal point of view - became necessary due to BFH rulings). The prerequisite is that the articles of association of the cooperative irrevocably grant the members of the cooperative who receive the subsidy the hereditary right to acquire ownership of the apartment they use for residential purposes in the event that the majority of the members of the cooperative living in a property give reason to own an apartment and Has consented to the sale of the apartments in writing. The assessment basis is the contribution made. The basic funding amount is 3% of the assessment base annually, up to a maximum of € 1,200 for each year in which the beneficiary holds the cooperative shares. (Legal situation for the acquisition of cooperative shares after December 31, 2003)

The child allowance is € 250 per year for each child for whom the requirements of Section 9 (5) sentences 1 and 2 of the EigenZulG are met; if both parents are entitled to the child allowance for a child at the same time, half of the child allowance must be applied to each. The sum of the basic funding amounts and child allowances may not exceed the assessment base. The entitlement to a home ownership allowance arises in the year in which the cooperative shares are acquired.

Historical development

Development of home ownership from 1949

• Since 1949 there have been tax depreciation options for construction costs, e.g. B. the so-called "7b depreciation" for income tax.
• In 1982 a concession for children was introduced ( Baukindergeld ).
• In 1987, in connection with the abolition of the value-in-use taxation of owner-occupied living space (Section 21a EStG), funding was changed from Section 7b to Section 10e EStG, known as "10e depreciation". 50% of the land value was included in the funding.
• The Eigenheimzulagengesetz has existed since 1996. At the same time, the funding according to § 10e EStG was abolished.
• As early as August 2003, the federal government presented another draft law: the 2004 Budget Accompanying Act (HBeglG 2004). This envisaged the abolition of the home ownership allowance. After the law was rejected by the Federal Council , an agreement was reached in the mediation committee in December 2003 on the modification of the home ownership allowance with effect from January 1, 2004 (i.e. the previously approved home ownership allowances remained unchanged):
  • The maximum basic funding amount is reduced from € 2,556 (formerly for new buildings) or € 1,278 (formerly for old buildings) to € 1,250 per year (regardless of whether for new or old buildings).
  • The child allowance increases from € 767 to € 800 per child per year.
  • The income limit is reduced from € 81,807 to € 70,000 for single people and from € 163,614 to € 140,000 for married couples (in each case the sum of positive income in the past two years).
  • The income limit no longer increases by 30,678 per child, but only by 30,000 €.
  • Extensions and extensions are no longer funded.
• With Art. 22 of the Annual Tax Act 2009, the Eigenheimzulagengesetz was changed: The child allowance will continue to be granted for children up to the age of 27. The lowering of the age limit for children from the 27th to the 25th year of life, as provided for by the Tax Amendment Act 2007, is not taken into account.

Development 2004/2005

• November 2004: Law on the financial support of the innovation offensive by abolishing the home ownership allowance. This law passed by the German Bundestag envisages the complete abolition of the home ownership allowance in favor of education and research expenditure. The Federal Council rejects this deletion without replacement. The federal government calls the mediation committee . At its last meeting on September 5, 2005, the Mediation Committee postponed the discussion again; thus no decision was made on the abolition of the home ownership allowance in this legislative period.
• November 2005: In the coalition agreement between the CDU, CSU and SPD of November 11, 2005, it was decided that the home ownership allowance would be abolished on January 1, 2006 (see coalition agreement; line 3513 ; PDF; 634 kB).
• November 29, 2005: The coalition factions of the CDU / CSU and SPD decide to introduce a joint draft law [1] (PDF; 92 kB) to the Bundestag without replacement of the home ownership allowance.
• December 15, 2005: The Bundestag approves the law.
• December 21, 2005: The Federal Council approves the law.

End of home ownership

Builders who started the construction of their property before January 1, 2006 or who concluded a notarized purchase agreement can claim the previous home ownership allowance for the entire funding period. The date of receipt of the necessary building documents by the building authority responsible under state law (receipt of the building permit or the building notice) is deemed to be the start of production. The actual start of construction only applies to buildings that do not require notification or approval.

Since the building permits are valid for at least three years and building notices (e.g. according to § 69a NBauO) can be valid for up to ten years (or can be extended, see BFH judgment III R61 / 03 of November 4, 2004), the owner-occupied home allowance remains received until at least 2013.

Cases are therefore also conceivable in which construction does not begin until years after the building application or the building notice, but this building measure is then funded after completion due to a building application or building notice submitted before the abolition of the home ownership allowance.

Funding that has already been set remains unaffected for reasons of protection of trust.

With a funding volume of more than € 10 billion per year by 2005, the abolition of the home owner's allowance will probably only reduce expenditure by around € 200 million in the first year - the full savings potential of € 6 billion will only be reached after a good eight years.

The home owner's allowance under fire

This article or the following section is not adequately provided with supporting documents ( e.g. individual evidence ). Information without sufficient evidence could be removed soon. Please help Wikipedia by researching the information and including good evidence.

The owner-occupied home allowance introduced in 1996 was highly controversial from the start. Economists have long called for deletion. Ultimately, the owner-occupied home allowance leads to increased construction costs, so from an economic point of view, it is not the building owners but the construction industry that is subsidized, although it is questionable whether the construction industry has really succeeded in realizing higher prices due to the enormous competitive pressure due to the owner-occupied home allowance. In any case, such an indirect subsidy for the construction industry is unnecessary due to the ongoing vacancy rate and the declining demographic development and also undesirable in view of the land consumption . Instead of more new buildings, modernization and renovation would be needed.

The social benefit of a state grant of money as a means of promoting property was also often questioned. The deadweight effects for the builder outweigh the welfare motives. After all, such aid would be financed from general tax revenue - taxes that would also have to be raised by those who cannot afford to own their own home. Low-wage earners and young families who suffer from high rents themselves would thus be used to finance other people's homes. Because of this, the home owner's allowance is socially unbalanced and unjustified.

The "deadweight" effects in contracts between close relatives or in promoting the acquisition of shares in housing cooperatives (1996–1998 and 2002–2003 due to changes in the case law of the Federal Fiscal Court) as a pure financial investment were also criticized (cf. § 17 EigZulG).

According to the Federal Statistical Office of November 2007, there was a 31.4 percent decline in building permits in Germany from January to September 2007 compared to the same period in the previous year to 136,000 building permits. The main reason here is the elimination of the home owner's allowance. For the same reason, however, there was an increase of 12.6 percent from January to September 2006.

See also

Wiktionary: Eigenheimzulage  - explanations of meanings, word origins, synonyms, translations

Individual evidence

1. ↑ Bayerische Landesbodenkreditanstalt: Eigenheimzulage. Retrieved September 15, 2018 . 
2. ↑ Law on the Abolition of the Home Ownership Allowance of December 22, 2005 ( Federal Law Gazette I p. 3680 , PDF)
3. ↑ Eigenheimzulagengesetz
4. ^ Housing Construction Premium Act
5. ^ Draft of a law on the revision of the tax law promotion of home ownership ( BT-Drs. 13/2235 ).
6. ↑ (Ref .: C-152/05)
7. ^ Judgment of January 17, 2008
8. ↑ (BFHE 196, 481)  ( Page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.  
9. ↑ IWH press release 43/2005. (PDF (104kb)) Halle Institute for Economic Research, November 23, 2005, accessed on May 25, 2017 (page 7). 

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