NRW: Subsidy for home ownership - Subsidy program of the state of NRW for the purchase of owner-occupied residential property

Through the "NRW.Zuschuss Wohneigentum" program, NRW.BANK, together with the state of North Rhine-Westphalia, provides support for the creation of owner-occupied residential property. For this purpose, a total of 400 million euros are made available.

What the program is all about, who can make use of it and what the deadlines are, we would like to show you in this article.

Why is there such a promotion in NRW?

Since NRW has the highest tax rate for land transfer tax in Germany, it is often difficult, especially for young families - due to the high costs associated with buying a house - to fulfill the dream of owning a home. In order to maximize the home ownership rate in NRW, the state has therefore enacted a development program, through which it should be easier for citizens - due to the lower tax burden - to realize the dream of owning their own home.

What exactly is the land transfer tax and when does it apply?

The land transfer tax is a one-time tax, which is to be paid when acquiring a plot of land or real estate to the tax office.

Depending on the federal state, it turns out differently and moves between 3.5% (e.g. in Bavaria) and 6.5% (e.g. in NRW) of the notarized purchase price. Depending on the purchase price, five-digit amounts can thus quickly become due.

Which types of real estate are promoted?

From both one- or two-family houses, apartments and plots of land on which a new building is to be constructed are promoted. It is important that the acquired property or the acquired land, on which the planned property is to arise, is used by the owner himself for residential purposes and it is his main residence. The self-use as main residence has to be proven within 3 years from the date of application at the latest. Thus, it is not possible for capital investors or landlords to make use of the land transfer tax reduction for rental properties.

What is the amount of the subsidy and how long is it valid?

Whoever buys or has bought a property for own use between 01.01.2022 and 31.12.2022 can claim a subsidy of 2% on the notarized purchase price or the issued award decision. However, it is important to note that this fixed percentage of 2% is only possible up to a purchase price of 500,000 euros and a maximum subsidy amount of 10,000 euros.

In addition, only natural persons can make use of the subsidy.

Where can I apply for the subsidy and what documents do I need to have ready?

The funding application can be submitted to NRW.BANK from 30.08.2022: https://www.nrwbank.de/en/privatpersonen/zuschuss-wohneigentum/

The following documents should be kept ready:

1. Location of the property
2. Bank account
3. Tax id.ID
4. Copy of identification documents
5. Notarized purchase agreement or legally binding award decision of a foreclosure procedure
6. Property transfer tax notice
7. Proof of payment for property transfer tax
8. Certificate of registration after main residence acceptance (at the latest within 3 years after application)

A final overview:

• The subsidy program applies to all projects started between 01.01.2022 and 31.12.2022 notarized purchase contracts or legally binding award decisions in NRW
• It applies only to natural persons
• The acquired property/building land on which a property is to be built must itself be used as a primary residence
• Fixed subsidy rate of 2% of the purchase price (for a purchase price of up to 500.000 euros and a maximum subsidy amount of 10,000 euros)

We are happy to support you in the application process and help you gather all the necessary documents.

Book a telephone consultation appointment now at: www.immowissen-bocholt.de