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The Residential Riester will be more attractive for many property owners from 1 January 2014. Above all, those who already live in their own home can look forward to the new provisions in the Pension Improvement Act. An overview of what is changing at the turn of the year in home ownership promotion.
With the new year comes a reform of the residential Riester. From January 2014, savers with an owner-occupied home or a condominium can use their Riester credit balance with state subsidies at any time for the debt relief of their property. In addition, the accumulated capital may in future be used to subsidize the age-appropriate conversion of one’s own four walls. Although the changes do not necessarily make the Wohn-Riester subsidy more understandable, state-subsidized home equity financing is even more worthwhile for many than before.
The number of residential Riester contracts has increased significantly in recent years. More and more Germans rely on their own property as a pension and use the state funding in the form of so-called homeowner’s pension. With the improvements from 2014, the residential Riester is now probably even more popular.
Residential Riester: More flexibility for debt relief
Probably the most important innovation in residential Riester is the more flexible withdrawal option. As of 2014, Riester savers are much easier to use their accumulated pension assets for the repayment of their real estate debt. As a result of the new regulation, owners can use their Riester credit balance – unlike previously – even before the start of the payout phase for debt relief. Here you have the choice between a partial and a complete withdrawal of capital. If, for example, expensive loan allows only limited special repayments, they may choose to use only part of their Riester assets for their own living space. In this case, however, they must leave at least 3,000 euros in their contract.
Age-appropriate conversion with residential Riester
Another advantage that homeowners at Wohn-Riester from 2014 have: You may use their capital saved in the future for the financing of an age-appropriate, barrier-free renovation of your own living space. In addition, the Wohn-Riester becomes more flexible for those real estate owners who are relocating. The period during which they can take their subsidies for a new residential property is extended to two years before and five years after moving out of the first property. Previously, this so-called reinvestment period was one year before and four years after the move.
Residential Riester complicated despite advantages
Although the residential Riester is quite complicated even with the new benefits, the government subsidies and the tax benefits with a Riester loan in many cases pay off to finance a home. Anyone who is considering how to finance the construction or the purchase of a house or apartment, should also in the course of a consultation on mortgage lending to other funding programs. Especially with such a long-term as an important project as your own property, it is advisable to discuss the advantages and disadvantages of individual forms of financing in advance together with an expert.