Is it sensible to withdraw Riester funds?

Hello everyone,

we are currently facing the decision of whether we want to withdraw money for our house project from our Riester funds.
It could also work without these approximately 50k, but the conditions would be somewhat better with them.

Personally, I was somewhat shocked to hear that the withdrawn money would then have to be taxed at 2 percent on a fictitious housing support account until retirement.

What would you advise or do you have experience with a withdrawal from Riester for housing purposes?

We are 36 and 35 years old with one child. A second is planned.

Thank you very much

The 2% interest rate is currently higher than the interest on the loan (which isn’t entirely true, since the 2% is only added to the taxable income and not to the tax burden, but let’s leave that aside). Basically, it is cheaper to forgo the withdrawal now and only make it at the end for repayment. I assume you have funds, so the long-term return will probably also exceed the loan interest.

Nevertheless, we made the withdrawal in the same situation because it allowed us to increase equity so that the loan became significantly cheaper with better collateral.

At around 30 now, quite a bit adds up until retirement and increases the tax burden. And that only from purely virtual money that you never actually had at your disposal.

So in short: If you need the money as equity, then yes. Otherwise, rather not. However, it should also be noted that, to my knowledge, a withdrawal after construction and before retirement is not possible or not so easily possible.

I withdrew the capital from my Riester pension in order to have more equity. In my case, it was a smaller amount, so the taxes won't be quite as "trifling." I admit that this deferred taxation is hard for me to understand because you don't know what to expect. The other disadvantages (the property must be permanently self-occupied) also weigh heavily. I decided on this because the equity was very limited.
Conclusion: it is up to you to decide whether the "slightly better" conditions are worth the effort for you. Of course, you would also have correspondingly less debt! (With the bank, in total the assets remain constant).

As far as I know, you can always go back to the Riester for rescheduling - so you can just wait calmly, the return is above the loan interest rates...

I'm not sure about that. I was once informed that this would only be possible again later when the property is fully paid off, but not for special repayments, refinancing, etc. However, that was only an oral statement.

One can, I have received that statement, apply for a withdrawal at any time. There just has to be a possibility to invest it into the property. For example, if a follow-up financing is due or use for special repayment, or renovation... whatever. One can also withdraw parts, but at least €3000 must be withdrawn and €3000 must remain (or nothing). An age-appropriate renovation of the existing property was explicitly mentioned.