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Instead of Rheins Hessengeld: Greens want cheaper loans for home buyers |

Anyone who buys a house for the first time now receives Hessengeld. The Greens accuse CDU Prime Minister Rhein of breaking an election promise and counter with the suggestion of an “interest rate brake”. High earners would not benefit.

Wolfgang Turk

Mission accomplished – Hesse’s Prime Minister Boris Rhein (CDU) reported this several times recently 100-day balance sheet of the black-red state government decency. At the top of his list was the Hessengeld, with which he had already successfully contested the state election campaign.

“Real estate transfer tax is on the house” – according to the Greens, who have been in opposition since January, Rhein has broken this promise. The real estate transfer tax for the first owner-occupied property will not be reimbursed directly upon purchase, as announced, but will be spread over ten years.

The Greens countered this on Monday in Wiesbaden with their own model of an “interest rate brake”. Against the backdrop of increased mortgage interest rates, the country should grant loans that are 1.5 percentage points cheaper than those offered by banks – including for previous purchases that require follow-up financing.

Greens: Higher interest rates are the problem

“We are starting exactly where people have problems with real estate financing. And that is the sharp rise in interest rates,” said Miriam Dahlke, budget policy spokeswoman for the Greens, about the model. It also runs for ten years for the beneficiaries. But it is more effective, fairer and less bureaucratic than the Hessengeld.

Rhein’s model, which the Greens are opposing, provides for 10,000 euros per buyer (maximum 20,000 euros) and 5,000 euros for every child under 18 who moves into the property. The funding is granted up to the amount of the real estate transfer tax actually paid and is paid out in ten equal installments annually.

These, on the other hand, are the details of the Green model:

  • Whether single or family: Anyone who buys their first owner-occupied house, condominium or building site would receive a low-interest loan from the state of Hesse. It should last ten years 1.5 percentage points cheaper be as usual in the market. According to the current status, the Greens are currently estimating 2.0 instead of 3.5 percent.
  • The loans would be processed through the state-owned WIBank, which has a proven track record in granting promotional loans. According to Green party leader Mathias Wagner, this is a decisive advantage over the Hessengeld, the processing of which Finance Minister Alexander Lorz (CDU) announced would involve a “huge bureaucratic effort”.
  • On a Loan amount of up to 250,000 euros and a maximum of half of the total loan burden a loan from the country could amount to.
  • Buyers would therefore In the case of maximum funding, the interest rate brake is relieved by 37,500 euros. With the Hessengeld from the CDU and SPD, a couple with two children receives a maximum of 30,000 euros in total.
  • Unlike the Hessengeld, which can be applied for for purchase contracts from March 1, 2024, the Greens have no deadline set for house sales. It shouldn’t be the case that everyone who bought before “looks the wrong way”. Anyone who is currently struggling with high interest rates when it comes to follow-up financing could refinance their debt cheaply using the Green model.
  • Another difference to Hessengeld: There are income limits, which, according to the Greens, are intended to prevent a “watering can effect” in favor of people “who earn really well”. They are included 60,000 euros gross per year for singlesat 110,000 euros for couples. To additionally 5,000 euros per child the limits rise.

Income limits defended

“The current funding does not address the middle of society,” said Green Party politician Dahlke about the income limits. Unlike the CDU, they want to provide targeted support. “If someone has the merit of being a member of the state parliament, the funding is not necessary.” The Greens consider their income limits to be appropriate, with average monthly earnings of 4,571 euros in Hesse.

This is what the Greens’ example calculations look like: Anyone who can afford to buy an apartment or build a house without loans receives 10,000 euros in Hessengeld as a single person, while couples receive 20,000 euros. They would not benefit from the Greens’ interest rate cap.

In contrast, the Green model would also include people who bought years ago and who now need follow-up financing in a time of higher interest rates. With a loan amount of 100,000 euros, parents of two children would be able to save 15,000 euros in interest. They don’t get Hessengeld.

Signal without chances

As far as the costs for the state are concerned: The Greens also see a plausible amount for their model in the sum of 40 million euros annually, as the state government estimates for the Hessengeld.

When Finance Minister Lorz presents his draft for a supplementary budget for the state in June, the opposition party will propose choosing the interest rate brake instead of the Hessengeld. It is clear to the Greens that the prospects are nil given the majority.

Real estate transfer tax increased several times

The background to the debate is the property transfer tax, which is the most expensive factor in the additional costs of purchasing real estate. The tax is due as a proportion of the purchase price and has increased steadily – in Hesse from 2 percent in 1997 to currently 6 percent.

Since 2007, the states have been able to determine the amount themselves. CDU-led state governments have since increased the tax twice. At the beginning of 2013 it went from 3.5 to 5.0 percent. In the summer of 2014, at the beginning of the now ended black-green coalition, it rose to 6.0 percent.

In nine of the 16 federal states the property transfer tax is lower than in Hesse. Neighboring Bavaria demands the least at 3.5 percent. In four countries, however, the tax is slightly higher at 6.5 percent. When asked, the Hessian Green Party budget expert Dahlke said: “I don’t see that now is the time for a reduction.”

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