German Government Expands Low-Interest Building Loans for Families

Berlin (Reuters) – More families than before are to receive low-interest building loans in order to make their dream of owning their own four walls come true.

The state-funded maximum loan amounts would be increased by 30,000 euros, according to a decision paper from the federal government for the housing summit on Monday in the Chancellery. “In addition, the limit of taxable income up to which a low-interest loan can be applied for will be raised from 60,000 euros per year to 90,000 euros per year.”

The six-page paper lists 14 measures, some of which are already known or declarations of intent. The paper is available to the Reuters news agency; “Spiegel” first reported on it.

The government paints a difficult picture of the industry, which is under pressure due to the rapid rise in interest rates and significantly increased construction costs. “Capacity utilization in construction is currently still over 70 percent, but it will not continue at this level. Therefore, further efforts are now required to stabilize the construction and housing industry,” said the government. “Insolvencies and job cuts must be avoided as much as possible.” At the same time, bureaucracy must be reduced, planning and approval processes accelerated and digitalization accelerated.

In the paper, the traffic light says goodbye to its plan to introduce a renovation obligation at EU level. Although the government wants to advocate for ambitious renovation quotas for the entire building stock, it wants to exclude mandatory renovations of individual residential buildings. In cities and municipalities with tight housing markets, the construction of affordable housing should be simplified. For this purpose, a special regulation should be created in the building code until the end of 2026. In addition, a home ownership program “Young Buys Old” will be launched for the acquisition of existing buildings in need of renovation. The funds for this should come from the Climate and Transformation Fund (KTF). However, a volume was not mentioned.

(Report by Christian Krämer, edited by Christian Rüttger. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)