Home loan procurement, in simpler terms. - Government financial aid for building personal residences
High Interest in State Aid for Property Purchase in Thuringia The existence of a state subsidy option since June has resulted in a substantial demand – frequently directed towards the wrong address, as reported by the Finance Ministry in Erfurt. Applications for this family homeownership subsidy should be submitted to the Thuringian Reconstruction Bank, not the finance authorities or the Ministry of Finance. After all, it's about a potential 5% contributions from the state treasury towards the purchase price of the first self-occupied residential property, provided all conditions are met.
State Subsidy for properties up to 400,000 euros
The opposition CDU parliamentary group has linked their approval of the Thuringian state budget 2023 to certain conditions. One of these conditions was the family subsidy for property purchase. To facilitate this, the Ministry of Infrastructure has set out the subsidy terms. Since the beginning of this year, this state subsidy can be applied for properties, houses, or building plots purchased since January 2nd – in many cases, this involves a significant financial contribution.
"Thuringian citizens with at least one child under 18 years of age can be eligible for a subsidy for the purchase of self-occupied residential property, depending on the purchase price paid," the Ministry of Finance announcement states. A prerequisite is that the real estate transfer tax has been fully paid and the purchase price has been proven in a notarized purchase agreement. Up to 5% will be reimbursed for properties with a maximum price of 400,000 euros, for building plots up to 100,000 euros. Moreover, the property must be self-occupied for at least five years, as per the subsidy guidelines.
Controversial Regulation
The subsidy was a point of contention between the CDU and the red-red-green minority coalition. The CDU argue that this would support families and stimulate housing construction. Red-Red-Green, however, contended that only a small, wealthy segment of families would benefit, while the majority would not.
The Ministry of Finance clarifies that the tax administration is solely responsible for real estate transfer tax and not for subsidy applications. Legally, the 5% subsidy is not a refund of real estate transfer tax, which was reduced from 6.5 to 5.0% in Thuringia this year. This was achieved through the combined efforts of the CDU along with votes from AfD and FDP. The substantial influence of AfD on a tax reduction had garnered nationwide attention.
The CDU parliamentary group has made approving the Thuringian state budget 2023 contingent on certain conditions, one of which includes the family subsidy for property purchase. The CDU believes that this subsidy will support families and stimulate housing construction.
