Buy land with cash, construction through KfW/NRW Bank

Hi,

we, in our late 20s, have discovered a new development area near us. It is supposed to become an entire neighborhood. The marketing only foresees the plots and no developers. There is a requirement of EH40 with photovoltaic/greening/flat roof. For us, a semi-detached house on about 256m² of land would be interesting. The maximum development is 0.4 floor area ratio. A garage is planned. The plot costs ~142k.

The development of the construction roads etc. has not yet begun and is expected to be completed in Q2/25 with a start at the end of this month (originally planned for early 24). Only then is the due date for the plot price. If I understand correctly, only a real estate transfer tax (6.5%) would apply for the land and not for the construction, since there is a 6-month gap and there are two contracts, correct? Building obligation does not trigger real estate transfer tax for the new building, right?

We are allowed to put a maximum of 2 apartments in the semi-detached house. The idea here would be to build it so that there is a small hallway after the front door and a small shower and kitchenette, so that we have two units, but both are occupied by us. This way we could take the KfW loan twice with 150k each (QNG). If we calculate with 450k, the NRW.Bank subsidy could still be possible up to 50% of this amount. This would mean that the entire loan would be covered by subsidies. A prerequisite for this would be to pay the land in cash and use it as equity, hoping that there will be a slightly better interest rate in Q2/3 25. The construction costs are still uncertain since we have to decide together with the future semi-detached neighbor how to build it.

Currently, the equity is 120k€ (savings account/stocks). So we would need to raise about 30k by the due date - possibly by selling a car. Then we would practically be broke.

We currently earn 3.9k & 2.7k, so together net ~6.6k. No children planned (permanently).

Do you see it as realistic or stupid to rely on the subsidy next year? In principle, we could currently afford the rate of 2.5k named by the financial advisor (he calculated 2% repayment, only 1x KfW without NRW.Bank, plot financed 600k), but that is already a big deal when you consider additional costs etc. We currently have no loans to service, only 1200€ warm rent + living expenses.

I am happy to provide further information if I have forgotten anything in this jumble.

If I understand correctly, only a real estate transfer tax (6.5%) would apply here for the land and not for the building, since there are 6 months in between and there are two contracts, correct? Building obligation does not trigger real estate transfer tax for the new building, right?

Correct. But this is not due to the timeline, rather exclusively because the purchase of the land is not linked to a specific construction company and you are free to decide.

We are allowed to put a maximum of 2 apartments in the semi-detached house. The idea here would be to build it so that there is a small hallway after the front door and a small shower and kitchenette, so that we have two units, but both are occupied by us. This way we could take the KfW loan of 150k twice (QNG).

Two units means TWO completely separate apartments. Two separate entrances. Two full bathrooms. Two electrical installations. Two kitchen preparations. So a two-family house. And the house must be approved as such – as a two-family house (or call it a single-family house + granny flat). Anything else won’t work. Usually, the second apartment costs more than you get through the subsidy. In most cases, it’s pointless only for the subsidy. It makes sense if, for example, an actual parent moves in, or similar.

If we calculate with 450k,

... you can probably build 120 sqm of living space plus garage/carport and terrace and thus not a (meaningful) two-family house.

Do you see this as realistic or stupid

Only the planning is stupid! Forget the plan.

Only the planning is stupid

Thanks already for the explanation, we weren't so clear about the electrical installation. I had only read that at least 1 small shower must be available and 1 kitchenette (theoretically), plus a hallway directly behind the front door, where you then put a door in front of the stairs as a closed entrance and one to the lower floor - I had also seen example floor plans that exactly exploit the funding with this.

And how does it basically look with the plan to buy the entire property and finance the construction separately later with equity only for the property? If you calculate now 450k that would be at least 150k KfW + 225k NRW.Bank (50%), so at least 375k through funding.

I'll take the first hit on Google: "An granny flat is a small, independent apartment within a larger residential building, often used as additional living space for family members, friends, or as a rental unit. The granny flat has its own entrance, its own kitchen and sanitary facilities, and it also measures at least 25 square meters." Source: Interhyp The important thing is the separateness. Completely autonomous electricity would be new to me. But no matter how you look at it: a semi-detached house generally does not indicate generosity. Comparable to an end-terrace house, many who have already lived in one reject this type of house because much is planned narrow and tight.

256m² plot. The maximum development is 0.4 floor area ratio. A garage is planned.

With a 0.4 floor area ratio, you may distribute about 102 sqm with full-floor quality. If you have to build two stories, that would be about 51 sqm on each level, ground floor and upper floor. And then you want to squeeze a foreign tenant in there? Or was it meant that you only pretend it’s a granny flat and occupy it yourself? For one thing: no one will buy that from you. For another: fraud. A granny flat is after all a separate residential unit; don’t be surprised if you also have to show a parking space. All in all, my tip is to build if it financially fits. Don’t build if it does not.

With a plot ratio of 0.4, you are allowed to distribute about 102 sqm as full-floor quality. If you have to build two stories, that would be about 51 sqm on each level, ground floor and upper floor.

Wouldn't a garage or the space in front of it reduce that even further? Or does it not count? 100 sqm would really be quite little - walls and such would further reduce the actual usable area, right? That would end up absurdly small if that counted. The development plan also states the following next to a drawing of 14m*9.5m: The permissible base area may be exceeded by the base areas of the facilities designated in § 19 para. 4 sentence 1 of the Federal Land Utilization Ordinance as well as additionally by the base areas of terraces and terrace roofs in the following subareas of the general residential area as follows:
- In WA 1 (our area) up to a value of 0.5

that you just pretend it is a granny flat and live there yourself

First lived in yourself, with the option to let parents live there later. Planning that from the beginning would be easier than converting later (without subsidies).

I had only read that there must be at least 1 small shower and 1 kitchenette (theoretically),

You are forgetting the living space...
Granny flat, not granny shower.
It actually has to be a separate habitable apartment with its own entrance. It must not be such that you first go into your hallway and from there can reach the second apartment. It must be accessible independently from your main apartment.

With a plot ratio of 0.4, you may distribute about 102 sqm as full-floor quality. If you have to build two stories, that would be about 51 sqm on each level, ground floor and upper floor.

I hadn’t calculated that far yet...

Completely electrically autonomous would be new to me.

Separate circuit or meter. Everything else makes no sense