Create, create, build houses – for many families the proverbial dream of a home of their own no longer works. There is not enough income left over to afford a house or an apartment. The building children’s allowance is intended to change this. Since 2018, the state has been awarding the subsidy to couples and single parents with children who want to buy or build their own home. But who exactly is entitled to it? How do families get the money? And how much is there?

How does the construction child benefit work and who pays it?

With the Baukindergeld, the name says it all: On application, you will receive money for building or buying your own home. The amount of the allowance depends on how many children you have. If the application is approved, couples and single parents receive 1,200 euros per household and child per year for ten years. The subsidy amount per child is therefore 12,000 euros. If there are two children, the amount is 24,000 euros and so on.

In some federal states this amount can be increased, for example in Bavaria. Here there is the Baukindergeld Plus, where families receive 300 euros more per child per year, making a total of 1,500 euros per year.

The Kreditanstalt für Wiederaufbau (KfW) is responsible for the Baukindergeld. The KfW is a development bank that grants numerous loans and subsidies. Since 2018 this has included the KfW Programme 424, as the Baukindergeld is also known. This is a grant that you do not have to pay back.

What conditions do you have to meet?

You can get Baukindergeld if you have at least one child who is still under age, lives in your household and for whom you already receive child benefit. It makes no difference whether the child is a natural or adopted child.

The allowance is intended to support low-income earners. Therefore, you will only receive Baukindergeld if your household income does not exceed €90,000 for a child. For each additional child you may earn 15,000 euros more. So the income limit for two children is 105,000 euros, for three children 120,000 euros and so on.

Important: It is not the gross income that counts, but the taxable income from the year before last and the year before last. If you apply for Baukindergeld before the end of 2019, the household income from 2016 and 2017 will be taken into account. The corresponding tax assessment notices show how much taxable income you had in these years.

What does not play a role in receiving Baukindergeld

The list of requirements to be met is long. But there are also some aspects that you might consider to be important, but which are not important for Baukindergeld:

  • It doesn’t matter whether you buy a house or an apartment, and whether the property is new or old.
  • You don’t have to be married; single parents and partners without a marriage certificate also receive Baukindergeld.
  • Affected children can come of age before the end of the support period without losing their entitlement to construction child benefit. Only the age of the children at the time of application is important.
  • A separation during the support period does not necessarily mean the end of the construction children’s allowance. Children who stay in the household will continue to be paid.

Other important conditions apply to the property you are building or buying:

  • The apartment or house must be located in Germany.
  • You must live in the property yourself.
  • At least 50 percent of the property must belong to you.
  • At the time of application, you may only own this one residential property.
  • You do not apply for Baukindergeld for an extension or modernisation.
  • As a rule, the construction children’s allowance is granted for the entire ten-year period. However, changes in your housing situation may result in your entitlement to the annual payment being waived. For example, if you no longer meet certain requirements. An example: the sale or rental of the property from the application during the period of the construction child benefit leads to the end of the benefit.

When and how can you apply for Baukindergeld?

Applications for Baukindergeld are possible since September 2018. However, the KfW Programme 424 is limited. You can only apply until the end of 2023 at the latest. It is also important that the signing of the purchase contract for your home or the issue of the building permit is between 1 January 2018 and 31 December 2020.

And there is another catch: you can only submit the application if you already live in your own home. But you can’t wait too long either: you must submit the application no later than six months after moving in. After that, you are no longer entitled to the subsidy. The date on the registration certificate is decisive.

Do you meet all the necessary requirements and conditions? Then you can apply for Baukindergeld in just a few steps:

  • Register online on the KfW subsidy portal.
  • Fill out the application on the portal and send it off.
  • Prove your identity (possible via Postident and Videoident).
  • Upload the requested documents on the website within three months. This includes: Registration certificate, confirmation of purchase of the property, proof of income.

Gone is gone: Why late applicants may be looking down the drain

The purchase contract must be signed by the end of 2020 and the building children’s allowance must be applied for by the end of 2023. So you can take your time with your property search? Not necessarily. The subsidy is only available as long as the funds planned for it are not used up.

A total of 9.9 billion euros are available for the construction of child benefit. Sounds a lot? But not quite as much, considering that 2.8 billion euros had already been used up by September 2019. At that time, the application process had been going on for about a year. If the number of applications remains the same or even increases in the next few months, the pot will soon be empty.

For whom is the Baukindergeld particularly worthwhile?

How much does a family benefit from the subsidy? That depends, among other things, on how much the construction children’s allowance contributes to the purchase price of the property. The subsidy can therefore pay off especially for families who buy a small house in a rural area and benefit from comparatively low property prices.

Let us assume that a family with two children applies for Baukindergeld and thus receives a total of 24,000 euros. If they buy a small house in the countryside, which is already available for 60,000 euros, the Baukindergeld covers 40 percent of the purchase price. If, on the other hand, the family pays twice as much for a house, the Baukindergeld only covers 20 percent of the purchase price.

This means that the Baukindergeld is of particularly little use to families in conurbations with high property prices: If the family has to pay 250,000 euros for a house, the share of the construction child benefit shrinks to less than ten percent of the property price. Nevertheless, the subsidy can of course make the decision to buy a home easier in such cases.