The construction of a house should also be stimulated with the child benefit. So far, however, the funding has mostly flowed into the purchase of existing properties.
Photo: dpa / Felix Kästle
The Baukindergeld will be more expensive for the Treasury than planned. At least that’s what the Federal Ministry of Finance assumes. It would like to receive further funding of 613.4 million euros for the funding program up to the year 2032. Failure to grant a so-called over-scheduled commitment authorization “would result in an immediate stop in funding,” according to a letter from the ministry to the chairman of the Bundestag Budget Committee, Helge Braun (CDU), which is available on “nd.DerTag”. “Applications from families with children and single parents who are eligible to apply would first have to be rejected in the event of a funding freeze despite a validly dated building permit.” This would cause “considerable political damage,” according to the ministry.
9.9 billion euros were previously estimated for the Baukindergeld. If the planned funds are added, it would cost a total of around 10.5 billion euros. With the Baukindergeld, the grand coalition wanted to make it easier for young families to buy an apartment or house. There was considerable criticism right from the start: it was mainly middle-class families who benefited from the expensive instrument, is an argument that is often put forward. In addition, only a third of the approved funds would be used for the new building, two thirds for the purchase of existing properties.
“The standards of housing policy are set completely wrong,” says the housing policy spokeswoman for the left in the Bundestag, Caren Lay, on nd request. While the money is literally “thrown out the window” with the building child allowance, there is hardly any money for socially bound rental apartments in cities with a housing shortage. “The traffic light should resolve this discrepancy between the promotion of property and the promotion of public and affordable housing, but it doesn’t give any indication of improvement,” says Lay.
Since September 2018, couples and single parents have been able to apply for child support. Eligible to apply are families with one child whose taxable household income is less than 90,000 euros per year and who do not yet own any real estate. The threshold increases by 15,000 euros per child. If the Baukindergeld is approved, the family receives an allowance of 12,000 euros per child, paid out in ten annual installments of 1,200 euros each.
The Baukindergeld was actually only planned for a period until the end of 2020. However, due to the corona crisis, the approval period was extended until the end of March 2021. What’s more, the subsidy can be provided up to six months after moving into the property to be subsidised. The reference date, however, is the date of the purchase contract or the building permit. For this reason, the Treasury must expect legitimate applications for funding by the end of 2023.
The fact that the planned money will probably not be enough is probably due to the fact that the child allowance is quite popular. By the end of 2020, it had already been approved 309,948 times. This means that a good 6.5 billion euros were paid out from the subsidy pot for building a house or buying a property. According to the state development bank KfW, another 82,183 applications totaling 1.8 billion euros were approved last year.
There is a certain irony in the fact that the FDP-led ministry now has to ask for more funds for the Baukindergeld. Finally, the party was against its introduction. “The Baukindergeld completely ignores the actual problems on the housing market,” said Daniel Först, the spokesman for building policy for the FDP parliamentary group at the time, before the introduction.