The key points of the coalition negotiations on housing policy
Grand Coalition: Housing of Contrasts?

CDU and SPD have found a common line in the coalition negotiations. Future housing and construction policies will focus on the promotion of small to medium incomes, the reintroduction of a special depreciation model and stronger control of the housing market for new rentals.

What could a new, grand coalition at federal level mean for Berlin?

Housing and construction is one of the important topics in the coalition talks for a relaunch of the Grand Coalition. At the same time, the Social Democrats' conceptions, which are moderate in comparison to the housing policy of the red-red-green Berlin Senate, are not diametrically opposed to those of the Christian Democrats (Merkel).

Read here which key points are being negotiated:

Families or households who wish to build or buy a house for their own use are provided with funding and KfW guarantees. For every child there will be 1200 Euro subsidy for the time of 10 years. The limit is 75,000 euros per year of household income, but increases by 15,000 euros per child. A major challenge for families is equity capital. Here KfW, which is owned by the federal government, will provide guarantees to enable families with fewer financial resources to build.

In future, the federal states will be allowed to exempt buyers of land for the construction of owner-occupied housing from property transfer taxes. It remains to be seen whether the Senate in Berlin, which has so far not committed itself to the promotion of home ownership, sees this regulation as an opportunity or a burden. So far, the state policy in the German capital has focused on regulating the rental market instead of promoting home ownership. With a property ownership rate of just under 15 percent, Berlin comes last in Germany. In Berlin, the real estate transfer tax amounts to six percent of the purchase price.

The tried and tested "special depreciation", which was already responsible for a construction boom in the post-reunification years, is back. Investors will in future be able to write off five percent of construction costs as "special depreciation" for four years each year when building affordable rental apartments. It has not yet been defined what is regarded as affordable housing. Two percent linear depreciation, which is on-top, remains unchanged.

Social housing construction, the modernisation allocation and the rent brake

The federal government will provide at least two billion euros for social housing construction. In the course of the Federalism Reform I, federal subsidies for social housing construction were supposed to expire and compensation funds were to be paid until the end of 2019. Now the Federal Government will stay in place until 2021 and continue to support the programme with at least two billion euros. This pot is important for Berlin, because one in two Berliners earns so little that they are entitled to a so-called housing permit, WBS. The growing number of housing permits (27,800 WBS in 2015) contrasts with a new occupancy rate of just under 6.5%. That was 6,200 apartments in 2015. This means that only about one in four WBS beneficiaries actually gets a social housing. For this reason, the Senate is already prescribing up to 30 percent social housing for new housing projects in the course of cooperative land development.

The modernisation allocation is capped. In the future, only eight percent of modernization costs will be passed on to rents instead of eleven percent in metropolitan areas. The absolute amount is limited to three euros per square meter. After five years, the levy is expected to rise again to eleven percent.

The rental price brake is being revised, although it is not certain whether it is legal at all. At present, the instrument for protecting tenants from unfairly high rents is being "negotiated upwardly"in the instances of the German courts. In the future, an automatism will take effect, according to which landlords will have to disclose the old rent if they are more than ten percent above the local rent for new rentals.

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