Germany Housing Grants 2026: What Replaced the Baukindergeld and Which Programs Matter Now

Germany’s Baukindergeld family building grant is gone, the fund is empty and no new cash subsidy is in sight. Yet there is more state support for a first home in 2026 than most people assume – it just hides in interest-reduced KfW loans, savings premiums and the home-linked Riester pension instead of a single cheque. This overview sorts the key programs by income limit, amount and how to apply, explains the July 2026 heating reform and shows which pots can be combined, so you know your entitlements before the bank meeting.

What happened to the Baukindergeld

The Baukindergeld, which paid families up to 12,000 euros per child over ten years between 2018 and 2023, has expired for good. Its fund of roughly 9.9 billion euros ran dry, and since 1 January 2024 the state bank KfW no longer accepts new applications. Households approved back then still receive their installments – but as of August 2026, no new version of the grant is planned.

A different principle has taken its place: interest-reduced loans instead of gifted money. That sounds less generous, but with today’s mortgage rates of roughly 3.7 to 4.1 percent the interest gap adds up to five figures over the term. The downside: you have to work through several programs with different limits instead of filling out one form.

KfW 300 – Home Ownership for Families

The program Home Ownership for Families (WEF), number 300 in the KfW catalogue, is seen as the direct successor to the Baukindergeld. It is open to households with at least one child under 18 whose taxable annual income is no more than 90,000 euros with one child. Each further child raises the ceiling by 10,000 euros: 100,000 with two, 110,000 with three children. What counts is the average of the two calendar years before you apply.

Only the construction or first purchase of a climate-friendly, owner-occupied home that meets at least the Efficiency House 40 standard qualifies. Depending on the number of children and the energy standard, the loan ranges from 140,000 to 270,000 euros. The effective rate started around 0.29 percent in June 2026 for a ten-year fixed period – a fraction of the market rate. You apply before starting the project, through your own house bank, not directly with the KfW.

Climate-friendly new builds: KfW 297, 298 and 124

If you exceed the WEF income limit or build without children, you land at Climate-Friendly New Build (KfW 297/298), which has no income limit. Program 297 funds construction, 298 the first purchase within a year of completion. Since 2 March 2026 the rate for an Efficiency House 40 sits at around 0.6 percent, and for the time-limited Efficiency House 55 tier at about 1.0 percent, each fixed for ten years. The loan runs up to 150,000 euros per residential unit.

One easily missed detail: the cheaper EH 55 funding is capped at a total budget of 800 million euros for 2025/2026. Once the pot is empty, only the EH 40 route remains. Neither program works without the »confirmation of application« from a listed energy efficiency expert. On top of that sits the older Home Ownership Program KfW 124, whose loan was raised from 50,000 to 100,000 euros in March 2026 – and it combines freely with the other KfW programs.

Heating subsidies: the July 2026 BEG reform

Anyone buying or renovating an existing property should know the Federal Funding for Efficient Buildings (BEG). For a heating swap, for example to a heat pump, the state pays a base subsidy of 30 percent of eligible costs through KfW program 458. Add an income bonus of 30 percent for owner-occupiers with a taxable household income up to 40,000 euros, plus the climate speed bonus of currently 16 percent. The maximum funded amount is 28,000 euros for the first residential unit.

As of 21 July 2026 the terms changed. The efficiency bonus for certain heat pumps and the emission-reduction supplement for biomass were dropped. For heat pumps produced outside the EU, the base subsidy falls to 15 percent, while units made inside the EU get a 15 percent compensating bonus and thus stay at 30 percent. The climate speed bonus will drop for the first time on 1 February 2027 and then melt away by four percentage points every six months – so every year of delay gives away part of the subsidy.

Housing premium and employee savings bonus

Two small, often overlooked pots reward saving toward a home. The housing construction premium (Wohnungsbauprämie) applies to building-society savings contracts, provided taxable income does not exceed 35,000 euros for singles and 70,000 euros for jointly assessed couples. The premium is 10 percent of the eligible savings, up to 70 euros a year for singles (on 700 euros paid in) and 140 euros for couples (on 1,400 euros). Over several years this builds into solid seed capital, and the premium is applied for once a year via the building society rather than through your tax return.

The employee savings bonus (Arbeitnehmer-Sparzulage) ties into the capital-forming benefits many employers pay. Directed into a building-society contract, the state tops it up by 9 percent of the eligible sum – up to 470 euros for singles and 940 euros for couples per year. The income limits were raised to 40,000 euros for singles and 80,000 for couples. Both premiums can be combined on the same contract if you stay under both limits.

Home Riester and the 2027 reform

The home-linked pension, usually called Wohn-Riester, channels Riester subsidies into an owner-occupied property. The saved capital does not fund a pension but the purchase, construction, debt repayment or the amortization of a running mortgage. If you pay in at least four percent of your prior-year income subject to pension contributions (capped at 2,100 euros a year including allowances), you receive the full base allowance of 175 euros, 350 for couples, plus 300 euros for each child born from 2008 (185 euros for earlier years).

The catch is deferred taxation: all subsidized amounts move to a notional housing subsidy account that is »credited« with two percent a year and must be taxed in retirement. Key for planning: all contracts signed by 31 December 2026 keep grandfathered terms. From 1 January 2027, new rules under the Riester reform apply to fresh contracts – if you want to lock in the old conditions, you have to sign before then.

State programs: the forgotten extra pot

Beyond the federal level, almost every German state funds independently, and these programs are often overlooked. Bavaria issues interest-reduced building loans for families with low to middle incomes through its BayernLabo and adds a grant on top for households with children. North Rhine-Westphalia supplements the federal programs through the NRW.BANK and funds climate-protection technology under »progres.nrw«, which combines with KfW support.

The details vary widely: income limits, child supplements and whether a property sits in a rural area or an expensive city all shape the amount. It always pays to check the responsible state development bank before you lock in your financing – an interest-reduced state loan can noticeably lower the monthly rate and usually runs alongside the KfW loans.

Combining, order and how to apply

The good news: many pots can be stacked. A classic setup combines a KfW new-build program (300 or 297/298) with a state loan and your own bank credit for the remainder. The BEG heating subsidy runs separately for the heating swap, while the housing premium and savings bonus concern the earlier saving phase. As a rule, WEF (300) and Climate-Friendly New Build (297) cannot be combined for the same project – here you have to pick one route.

On sequencing, one iron rule holds: apply first, then build or buy. Most KfW and BEG programs require the application before the project starts – sign the construction contract too early and you forfeit the entitlement entirely. KfW loans always run through your house bank, the Wohn-Riester allowances through the provider, the building-society premiums through the Bausparkasse. Plan enough lead time for approval, because a bank forwarding a KfW application and a state bank checking eligibility can each take several weeks before you get a binding commitment.

Income limits at a glance

The limits are the biggest source of confusion because each program uses a different reference. For orientation, always taxable annual income: WEF (KfW 300) 90,000 euros plus 10,000 per further child; housing premium 35,000 euros (single) or 70,000 (couple); employee savings bonus 40,000 or 80,000 euros; BEG income bonus 40,000 euros per household. The Climate-Friendly New Build (297/298) and the BEG base subsidy have no limit at all.

Because »taxable income« differs sharply from gross – work expenses, provisioning costs and allowances lower it – it pays to check your last tax assessment before ruling yourself out. Many a household that feels disqualified at the gross figure actually lands under the limit on taxable income. Do not round down too quickly, and remember that jointly assessed couples are measured against the higher couple ceiling, not two single limits.

How tools on CalcSI help

Before comparing programs, run your project through with solid numbers. With the loan calculator you can see how much an interest-reduced KfW or state loan lowers your monthly rate versus a plain bank mortgage. The compound interest calculator shows what the housing premium, savings bonus and Riester allowances really add up to over the saving years. Estimate the real estate transfer tax by federal state, since it is one of the extra costs no subsidy covers. And if you are torn between building-society saving and fund saving, the comparison building-society contract versus savings plan helps weigh the premiums realistically against the return of an ETF savings plan.