How to cancel Wohn-Riester for a home or how to proceed?

I don't understand your calculation. The paid amount goes into the housing promotion account. So 23,000€. That is compounded annually at 2% until retirement. Assuming a period of 30 years until retirement, that rounds up to 42,000€. How do you get to 100,000€?

The 100,000€ is just a pure example calculation, because you can nicely derive the numbers from it.

So the assumption would be: he only takes the 23,000€ (withdrawn from the building society) and then does nothing else with the contract... then he would probably have to repay it at some point, until then 2% would be added to it annually.

I take over your 42,000€, if he repays it in 20 years, then 42,000€ would be taxable on the fictitious housing promotion account.

BUT how does the actual offer look, that would interest me? He probably didn’t make a housing Riester contract with 23,000€ where he pays in the max amount of 2,100€ annually including subsidies, right? It is probably a 100,000€ building savings contract (or 50,000€, but very unlikely given the savings performance) into which 2,100€ flow annually, which is credited to the housing promotion account.

Therefore my calculation moves into this area: the building society pays him the 23,000€ + pre-finances the rest (example 100,000€). For the 23,000€ we are at 42,000€ in 30 years! (I don’t verify this... too much effort, just for the example calculation...) He continues to save the building savings contract to make it ready for allocation with the max amount of 2,100€ (which comes from his savings performance + state subsidies). THUS every year another 2,100€ is added, which then grows the promotion account further with 29 years/2%, then 28 years/2% and so on.

When the building savings contract is ready for allocation, 2,100€ still flows in as housing Riester... as repayment for the remaining loan...

So it could become considerably more.

Of course, he can also withdraw the 23,000€ and only count that amount as housing Riester account. BUT if he has taken out a 50,000€ or even 100,000€ building savings contract, then he has paid quite a lot in fees for that (something between 500€ and 1,600€) and that could also be considered as “costs” for the financing... apart from the annual costs.

And one more thing: If you already have housing Riester, then simply canceling and using the capital for the property (repaying the subsidy / additional taxation) makes absolutely no sense. Then clearly withdraw and only take the amount as housing Riester.

BUT what else you can do: if you realize that you can get cheaper conditions from the bank / wherever anyway without the housing Riester, then you have the following options: - You let it continue to take the subsidies, it might become interesting in the future = meaning if interest rates rise, you might still take the loan through the building society because it is cheaper (basically for follow-up financing!) - Of course, nowadays you can make other contracts and transfer the Riester (harmless for tax/subsidy) to another contract. But you have to calculate exactly what makes the most sense.

PS. I am not an insurance broker, i.e. I do not offer Riester contracts etc.!

I have now often heard "left alone in peace". But I don't understand that. If I want to use the capital that is now in there for the house, then I still pay the 2% interest per year (to whom actually?) yes on it.

letting the "Wohnriester" contract rest = no more payments... you also don’t pay out the €23,000! = so no funding account is built up, where you would have to pay interest on it

thank you for your answers. If two experts are already arguing here, then it simply is not a proper retirement provision. Another question: If we cancel the contract, do we simply get the investment costs, i.e. the contributions, back?

so if you simply close a "Wohnriesterkonto," the following happens first: - back payment of the tax that you previously claimed on the savings rate for tax purposes (the payout is reduced by this amount) - the government subsidies have to be repaid (this also reduces it) - the initial fee, which was due at the beginning, is lost so assume that much less will be paid out....

and what do I do with the 23,000 in the next few years? What will they be taxed as?

sorry, if this drifts off-topic. I just want to put the 23,000 into the house and then not deal with the topic of Riester anymore or think about whether there will still be a tax burden in 20 years or not. Isn't that possible? So just take the 23,000 and terminate the contract?

sorry if this drifts off-topic. I just want to put the 23,000 into the house and then no longer deal with the Riester topic or think about whether there will still be a tax burden in 20 years or not. Isn't that possible? So just take the 23,000 and cancel the contract?

Yes, but you won't get to keep 23,000 €.