Wohnriester / Homeowner's Pension

Wohnriester is a subsidy for home ownership under the Altersvermögensgesetz (AVmG). To qualify for the subsidy, you must either buy a home or convert a property to create new living space. If these requirements are met, you can withdraw capital from the Riester contract. However, at least € 3,000 must be left over or you must use the Riester contributions to repay the loan.  

All persons subject to pension insurance, civil servants, recipients of unemployment benefits, parents on parental leave, caring relatives and the spouses of all groups are eligible. Only the self-employed are not eligible.

The subsidy is divided into allowances and tax benefits:

  • Every saver receives a basic allowance of €175, provided that he or she saves 4% of his or her previous year's income subject to pension insurance contributions. The maximum amount is € 2,100.  
  • Then there is a child allowance of € 185 per child born before 2008 and € 300 for each younger child. 
  • Career starters under 25 get an extra bonus of € 200.  

In order to receive the subsidy, you must pay in at least the basic amount of € 60 per year.

In your tax return, you can then deduct savings contributions of up to € 2,100 as special expenses. However, the benefit is reduced by the allowances received.  

By the way, you have to be careful when selling the residential property prematurely if you do not make a replacement investment. This is then considered a termination and in this case you would have to pay back all subsidies. 

Incidentally, benefits from the Wohnriester contracts are taxed in arrears. That is, only at the end of the term. In order to put the so-called owner-occupied pensioners on an equal footing with the classic Riester savers, a housing subsidy account is set up, which can be used at the beginning of the pension as a tool for calculating taxes. 

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Note: German audio only