Baukindergeld - Interpretation of the new funding guidelines

Hello everyone,

I need help interpreting the new KfW funding guidelines for Baukindergeld, which have been in effect since 17.05.2019.

Perhaps I am just missing something.

According to the new guidelines, among other things, the following is no longer supported:

"(...) the acquisition or transfer of ownership between relatives of a household member in the direct line (for example: children, parents, grandparents, great-grandparents),(...)"

I understand that this refers to the case where the grandparents sell the house, for example, to the son (who has the children).

But who exactly is a "household member" and who/what are the "between relatives"?

A household member is, for example, the wife, and the "between relatives" would then be the acquisition between the husband’s parents and him (or vice versa)? That makes sense to me.

In my opinion, however, the wording is "strange". Shouldn’t it say:

"(...) the acquisition or transfer of ownership FROM relatives TO A household member in the direct line (for example: children, parents, grandparents, great-grandparents),(...)"

A phone inquiry at KfW led to somewhat "rough" answers.

It did not get better when I asked what happens with a sale to the daughter-in-law or son-in-law.

They said that this case is also "clearly included".

In my opinion, the wording does not support that. The daughter-in-law is not directly related to the parents-in-law, but related by marriage.

Only she is registered in the land register when buying from the grandparents.

I do not see that as an "acquisition between relatives of a household member in the direct line".

If I use legally defined terms like "first-degree relatives," then I must stick to them and cannot simply say that this of course also includes the daughter-in-law as a "first-degree relative by marriage."

Moreover, despite community of accrued gains, family law would not attribute it to the husband (§ 1363 Civil Code): The respective assets of the spouses do not become their joint assets; this also applies to assets acquired by a spouse after the marriage).

What is your take on this?

P.S. In my opinion, the entire regulation is poorly thought out, or these cases could have already been foreseen a year ago and blocked with a formulation such as "Acquisition of real estate by/from first-degree relatives is not supported."

Whereas acquisition from uncle/brother etc. is still possible.... briefly thinking, the parents could transfer the property to the uncle and he could sell it shortly afterward to the nephew (of course with additional costs).

So as I read/interpret it, acquisition from parents-in-law would thus be excluded.

Husband and wife live in the same household -> household member
Husband buys from wife’s father/mother -> relative of a household member

Hello,

thank you for the feedback.

That a man and a woman are household members together, ok.

The man buys from the father/mother of the woman. The parents of the woman are "relatives of a household member in the direct line," also ok.

That would then be the "acquisition FROM relatives of a household member in the direct line."

However, the funding guideline says:

"The acquisition (...) BETWEEN relatives of a household member in the direct line."

What is this "between" supposed to mean?

Relatives in the direct line are parents, children, grandparents, and grandchildren.

The household member is the man as "parent." "Between" his "relatives an acquisition takes place. For example, a sale to the grandparents, grandchildren, or siblings of the household member. And regardless of whether they are household members. That is the "definition" of "acquisition between relatives of a household member," right?

The "between," in my opinion, is complete nonsense, because that would mean that the "relatives of the household member" acquire from each other without the involvement of the "household member."

For example:
Brother A is the affected household member. Brother B acquires the house from the parents but is not a household member.
That would then, in my opinion, be an acquisition "between relatives" (Brother B as son of the parents) of the household member (Brother A) in the direct line.

But that was not eligible for funding previously.

The "between" could, of course, also mean:
The wife and husband are "household members." The man and his parents are the relatives in the direct line. If the man buys, he himself is excluded from the funding. Since he is (also) a household member, the wife as an independent applicant (and household member) is also excluded because an acquisition "between relatives in the direct line of a household member (husband who is at the same time part of the 'relatives' and a household member) has taken place... in this respect the acquisition affects the entire household.

But if the acquisition is only made by the daughter-in-law... meaning the son does not acquire, I do see an "acquisition FROM relatives of a household member in the direct line," but not an "acquisition BETWEEN relatives of a household member in the direct line."

Bottom line question: Why didn’t they simply write "from" instead of "between"?

I understand exactly what you mean, but I believe it was meant differently and "vom" would actually have been better. Whether anything legal can be derived from this, you need to ask a relevant expert.

Now it's backfiring on all the tricksters who attacked the funding

As if one did not know this case constellation beforehand.... that almost raises the suspicion that those who were meant to be "allowed through" were let through and now a quick stop is being put in place.

And all this with a maximum level of amateurism.

I do hope that the KfW has lawyers.

They should actually know that in a "purchase between relatives" a relative must be involved on both sides.

I actually find it very questionable that it is then argued that this means the acquisition "BY" relatives. This difference should actually be clear to everyone.

Especially since § 3 Abs. 6 Grunderwerbsteuergesetz contains the perfect and accurate formulation template:
"Von der Besteuerung sind ausgenommen:
(...)
der Erwerb eines Grundstücks durch Personen, die mit dem Veräußerer in gerader Linie verwandt sind oder deren Verwandtschaft durch die Annahme als Kind bürgerlich-rechtlich erloschen ist. Den Abkömmlingen stehen die Stiefkinder gleich. Den in den Sätzen 1 und 2 genannten Personen stehen deren Ehegatten oder deren Lebenspartner gleich;"

If only it had to be rephrased as:
Not eligible for funding is the acquisition by or the transfer of ownership to household members who are directly related to the seller (....). The spouses or life partners of the persons mentioned are considered equivalent."

In other words: If § 3 Abs. 6 Grunderwerbsteuergesetz were formulated only like this:
Exempt from taxation is the acquisition between relatives in a direct line.

probably no one would come up with the idea to interpret this as "of course" including spouses. Such an argument would probably not be accepted by any tax office.