How to use Wohnriester

Good evening,

I have a question.
So we have found a property to buy for 150k.
We have about 40k equity.
In addition, I also have a Wohnriester contract. Capital currently 5k.
How do you optimally use the capital from Wohnriester?
1. Can you simply use the 5k for financing and it counts as equity?
2. Can you use the 5k to repay?
3. Should I just let it continue running and not withdraw anything?

I would appreciate an answer.

I would try to get a Wohnriesterdarlehen and then transfer the capital to this contract if you basically like Wohnriester. Then the allowances are used directly for repayment.

Elina has already said everything and my note is again on the Riester. If you haven’t dealt with it directly yet, I would do so again to make sure that you want it that way ;)

Regards Andreas

And "Wohnriestervertrag" itself doesn't say much. It makes a big difference whether it is a Wohnriester building savings contract or loan agreement. It should be a loan agreement because you save on fees here and the repayment amounts of the loan installment are directly tax deductible. Since you have to repay anyway, you can fully benefit from the 4200 euro tax advantage (with 2 spouses each having their own loan agreement). With a building saver or other Riester contract, you would somehow have to come up with these 4200 euros extra. However, the Wohnriester also has a few pitfalls, so you would need to have it calculated to see if it is worth it in the end.

So isn’t Wohnriester better than a Bausparvertrag? I’m totally confused. Wohnriester offers allowances if you have children, which you can use for repayment, for example.

What about taxes, for example when you retire, do you also have to pay taxes on the residential property you paid for with Riester?

Who invests in Riester saves tax-free and with state subsidies. However, the Riester pension is subject to the equity tax. But if you use your Riester contract for building, you do not receive a pension. Therefore, a fictitious pension account is set up equal to the capital used for building. When retirement age comes, this amount must be taxed. With a one-time discount of 30%, or without, spread over who-knows-how-many years. Karsten