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Hessengeld: A blessing for families or just an expensive scam?
The Hessian state government introduced Hessengeld to support families when purchasing real estate. Since 2024, over 10,000 applications have been approved.
Hessengeld: A blessing for families or just an expensive scam?
In September 2024, the “Hessengeld” program was launched in Hesse to help families buy their first four walls. The CDU/SPD state government is pursuing the goal of compensating for the high real estate transfer tax, which accounts for six percent of the purchase price in this country. Finance Minister Alexander Lorz reports more than 10,000 approved applications and a total volume of 160 million euros that has been available since its introduction. On average, applicants receive around 15,000 euros, but in installments over a period of ten years - eleven million euros have already been paid out so far. [Hessenschau].
As Lorz explains, around 70 percent of households with an income of less than 100,000 euros benefit from this support program. Future home buyers can apply for a maximum of 10,000 euros for their first home or apartment, and couples can even look forward to up to 20,000 euros. In addition, there is an additional 5,000 euros for every child under 18 years of age. This is particularly relevant because the property transfer tax must be paid immediately, while the Hessengeld funding comes in installments.
Digital application processing and high satisfaction
The administration is moving with the times: applications for Hessengeld are made digitally, and satisfaction among applicants is high. Of around 14,500 applications submitted, over 10,000 were approved. An impressive 49 percent of these applications come from families with children. The main users live predominantly in large cities such as Frankfurt, Kassel and the Main-Kinzig district, where apartments and houses are often sought-after goods.
But not everything that glitters is gold. The opposition, including the FDP and the Greens, is rather critical of the Hessengeld. They are calling for a fundamental reduction in the real estate transfer tax and are concerned that the program does not create any incentives for the construction of new residential property. Instead, they fear that it will simply lead to deadweight effects, which calls into question the effectiveness of the Hessengeld.
Funding requirements and exclusions
Hessengeld may only be used to support first-time purchases of residential property. There is a personal use requirement, which means that holiday apartments or rented properties are not eligible. Other types of property, such as commercial properties or properties in other federal states, are also not eligible for funding. Interested parties should know that properties already owned - whether through inheritance, donations or other means - are not eligible for this funding.
As an additional incentive for future builders, funding is also available in Hesse to create or modernize homes or condominiums. However, there is no legal right to funding. Anyone who would like to submit an application must comply with the specified income limits, which are within the framework of state law. Hessencenter and Verwaltungsportal Hessen provide information about the necessary steps to realize your own home ownership with financial support.
Overall, it remains to be seen how the Hessengeld project will develop and whether it will achieve the intended effect of helping more people to own their own home and supporting families in Hesse.