Changes for Real Estate Buyers in 2018

News
01-Feb-2018

The year 2018 will bring some interesting changes for builders and buyers of real estate. Not only will there be changes in subsidies, also a new construction contract law will enter into force. Furthermore, there will be higher Riester-subsidies as well as other legislative proposals which have not been finalized yet.

Higher Riester Subsidies for your own Four Walls

Whoever is counting on Riester subsidies from the government for the realization of their dream of residential property can benefit from higher subsidies from January 2018 onwards. The basic allowance for Riester will rise from 154 to 175 Euros in total. A married couple having the repayment of their construction financing subsidized via a Riester loan can therefore profit from an increase of subsidies of 42 Euros annually. However, child allowance as well as the possibility to claim additional tax benefits in the form of special expenses deduction remains unchanged.

New Construction Contract Law

New legal frameworks apply for all construction contracts concluded after 1 January 2018. A new section in the construction law of the German Civil Code (BGB) strengthens the legal standing of private builders towards construction companies. Here`s an overview of the most important revisions:

1) 14 days withdrawal period: private builders can withdraw the construction contract within a period of 14 days after conclusion. The building contractor must inform his customers about this right.

2) Building specifications: The building contractor must hand out detailed building specifications to his customers prior to the contract signing.

3) Advance Payments: building contractors may only demand a maximum of 90 per cent of the agreed total price as advance payment prior the inspection. A minimum of 10 per cent may only be invoiced after the inspection.

4) Completion date: In the future, the construction company must announce a specific completion date in the contract. If the specific date cannot be named due to missing approvals, the duration of the construction period must be named. This facilitates the enforcement of indemnity claims for the builder in the case of severely missed deadlines.

Innovations in the KfW- and BAFA-Subsidies

In the year 2017, the KfW-subsidies for the accessible reconstruction of apartments was already used up in August. This subsidy shall be resumed in 2018 with the reservation that the adequate funds are included in the federal budget.

The subsidies provided by the Federal Office of Economics and Export Control (BAFA) will also be amended. From 2018 onwards, executive handicraft businesses may only be ordered to work after the subsidy application has arrived at BAFA. The subsidy application can be declined otherwise. BAFA-subsidies primarily affect the installation of thermal solar systems and heat pumps in already existing buildings.

New Building Energy Act

The building energy act (GEG) should have originally been discharged prior the parliamentary summer break in 2017 in order to come into force at the beginning of April 2018. But as the coalition could not come to terms, the legislative proposal was postponed. This is the reason why it is not clear right now if the new building energy act will be implemented in the course of 2018. Contents of the controversial new law are mainly new frameworks for lowest possible energy buildings which are particularly efficient in the consumption of fossil fuels.

Property Tax on Trial

The so-called assessed value currently serves as assessment basis for the property tax, a value depending on assessments from the year 1964 – in East Germany even from 1935. Therefore, the market changes of the last five decades are practically left out when determining the property tax. On January 2018, the Federal Constitutional Court will decide if the assessed value contradicts the constitutional principle of equal treatment. If this is the case, then the legislator must change the procedure for determining the property tax.

Invest Now!

You are looking for a lucrative investment opportunity on the Berlin property market, then do not hesitate to contact us today via telephone or mail.

Your Accord Estates GmbH Team

 

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