The state supports savers not only with the pension over the Riester pension with allowances and tax benefits. Even when buying or building a home, they can use the state subsidies. There is the residential Riester. This possibility of real estate financing, also known as home ownership, offers several advantages.
What are the requirements of Wohn-Riester?
Since the Eigenheimrentengesetz came into force in 2008, the Riester pension can also be used to finance one’s own four walls. Interested parties have two options: Either they use a Riester loan or conclude a Riester home savings contract . The latter is also known as Residential Riester.
Important for the claim to the promotion is that with the Wohn-Riester a self-used property is acquired . This means that the Riester saver must live in the four walls he has bought or built. For example, if the property financed with a residential Riester is rented out, the subsidies received must be repaid. The background of this regulation is the goal that consumers can live rent-free through the combination of Bauspar contract and Riester in old age.
In addition to the purchase or construction of property, savers can also use the Wohn-Riester to finance age- and disability-friendly conversion measures or to repatriate existing real estate loans. The loan must be used for a self-used property. In addition, consumers can use the money to acquire cooperative shares for an apartment.
As a rule, all statutory pension-insured persons, such as employees, civil servants and compulsorily insured self-employed persons are entitled to receive support . It is also important that the loan must be repaid in full until the beginning of retirement.
How does the promotion at Wohn-Riester?
With the Riester pension, the subsidy is divided into supplements and tax benefits. This is no different with the Wohn-Riester. Instead of building up a financial cushion for retirement with the state support and paid contributions , the allowances flow into the housing savings contract Riester . These support home savings during the savings and repayment phase.
State allowances: savers are entitled to an annual basic allowance of 175 euros. This amount flows 100 percent into the home savings contract, when homeowners deposit at least four percent of their previous year gross income minus the expected allowances in the contract. For every child entitled to child benefit, the state also pays 185 euros or 300 euros if it was born after 2007.
If the gross income is, for example, 30,000 euros, a homeowner without a child would have to pay 1,025 euros into the building savings contract within one year. Together with the basic supplement of 175 euros, the sum amounts to 1,200 euros, which corresponds to four percent of the gross income .
The supplements flow directly into the home savings contract. In the savings phase, they lead consumers to reach the minimum savings amount from which the contract is ready for assignment and they can call up the loan more quickly. In the repayment phase, the state support supports building society savers in the payment of the loan.
An example of the association of private building societies shows just how much a single savings partner with a child (born before 2008) benefits from state subsidies. She has a gross annual income of 30,000 euros and wants to call the loan after 15 years. If she pays four percent of her income to the contract each year , the allowances add up to 30 percent of the total savings .
|basic allowance||child allowance||own contribution||Total savings|
|Yearly||175 euros||185 euros||840 euros||1,200 euros|
|After 15 years||2,625 euros||2.775 euros||12,600 euros||18,000 euros|
|Percentage||5,400 euros (30 percent)||12,600 euros (70 percent)||18,000 euros (100 percent|
Tax benefits: The amounts paid and allowances can be tax deducted as special taxes. The tax office takes into account a maximum of 2,100 euros per year for the deduction of special taxes. However, the tax benefit will be offset against the subsidy received. This means that families with children benefit mainly from the supplements from Wohn-Riester, while single-earner well-earners tend to benefit from the tax refund. The reimbursement does not go into the Bauspar contract, but to the taxpayer. Experts recommend, however, pay the repayment in the contract, for example, to pay off the loan faster.
What needs to be considered when living Riester?
While the Residential Riester is essentially similar to a classic building society savings contract, there is one decisive difference: the subsequent taxation . This comes with every Riester pension to bear, regardless of whether savers finance it with a home or build a private pension. However, Riester-supported homeowners do not receive monthly pension benefits that can be taxed. To be able to do this, there is the so-called Wohnförderkonto.
On this account, all paid allowances and deposits are recorded in the residential Riester and every year with two percent interest. If the homeowner retires, the fictitious amount accumulated on the housing subsidy account is taxed. There are two options for taxation:
- Tax payment in one fell swoop: The taxable amount is reduced by 30 percent, ie instead of, for example, to 50,000 euros, only taxes amount to 35,000 euros. The remaining amount is added to the taxable income in the first year of retirement. In general, this variant is the worse choice, since the one-time tax burden can be very high.
- Annual taxation: The amount to be taxed is split up so that homeowners have their tax liability paid by the age of 85. For example, if the homeowner retires at the age of 65 and his account amounts to 50,000 euros, he will be left with 20 years to pay the tax. Every year 2,500 euros (50,000 euros through 20 years) would have to be taxed.
How useful is home savings with Wohn-Riester?
In recent years, more and more people have opted for a residential Riester . The benefits are obvious: “With state funding and the right Bauspar contract savers secure a cheap credit for their future mortgage lending,” says Stiftung Warentest. In addition, the supplements support consumers in saving and in the eradication. However, the downstream taxation must not be ignored. Future savings savers should therefore be informed and advised exactly whether they plan with a residential Riester or other real estate financing the best her house construction or purchase.
In addition, it is very important to consider different offers to residential Riester . In a test of the Stiftung Warentest for Riester home savings, the consumer organization for three different model cases identified three test winners. Which offer is therefore suitable for own mortgage lending, depends strongly on the individual desires and the financial leeway.
For this reason, it is indispensable that the Bauspar contract is tailored to personal needs . With a comparison of different rates can also be found a particularly favorable financing option.