KfW 300 funding upon disposal of real estate ownership

Good day everyone,

I know that the topic has come up 1-2 times already, but I wanted to ask again how the situation would be with the following constellation regarding the KfW loan No. 300 (home ownership for families).

My wife and I want to build a new house on a plot of land we own. However, my wife already owns the house in which we currently live (former grandmother's house). Since my wife does not really want to give up the house, we have come up with the following idea: We sell the house to a family member with a payment term of 10 years and a repurchase right. Then the KfW loan is applied for. Afterwards, the repurchase right is exercised so that the house is again owned by my wife. (Whether this is regulated via a repurchase right or repurchase option etc. is still open).

Would this scenario be conceivable or do you think there could be problems with it?

P.S.: The house we currently live in is unfortunately much too small in terms of space/area for us, so we have to plan a new building.

Thank you very much in advance for your input!

Best regards

The funding instrument you mentioned is not intended for families in your situation (homeowners) and it even says so. That is quite easy to accept without becoming greedy. Whether the trickery could work – possibly.

I haven't heard of a right of withdrawal in 30 years. But I know what you mean. Regarding the question. Payment in 10 years, transfer of ownership now. It can be done, but it may be a tax issue. Keep in mind that real estate transfer tax is incurred twice. For a 400k house, that means up to 52k in taxes, just to get the subsidy. Is it worth it? It can be avoided by trickery in a direct line (child-parents).

For me, though, it is solely and exclusively subsidy fraud.

The funding instrument you mentioned is not intended for families in your situation (homeowners) and it is stated as such. That is quite easy to accept without becoming greedy. Whether the trickery can work - possibly.

Well, I think there is a difference between actually owning a house that offers enough space for a family or, as in our case, an old building that was divided and therefore is basically only a 3-room apartment for a family of four with two people working from home. That my wife would like to keep the house is purely an emotional matter, as she mostly grew up here.

Well, I think it is indeed a difference whether you actually own a house,

No, you do already own a house. The subsidy is explicitly for people who do not already own real estate assets.

That my wife would like to keep the house is purely an emotional matter, since she mostly grew up here.

Emotionally, I say "social parasite." You are taking possible subsidies away from other families. Not meant to be mean, but it hits the core.

I haven’t heard of a right of reclaim in 30 years. But I know what you mean. Regarding the question. Payment in 10 years, title transfer now. That can be done, but it might be an issue tax-wise. Keep in mind that 2x real estate transfer tax applies. For a 400k house, that means up to 52k in taxes, just to get the subsidy. Is it worth it? It can be avoided through trickery in a direct line (child-parent). For me, though, this is purely and solely subsidy fraud.

Tax-wise questionable, subsidy-wise as well, I definitely agree with you on that. I think we won’t be able to avoid a legal review. The parent-child constellation doesn’t work, since the children also count as household members. In general, I don’t want to give the impression that I’m trying to get the subsidy by any means necessary. We were just wondering if this case has happened before and whether it’s legitimate to do it in this way. As I have already read, there are various other constellations in which people have shifted ownership of properties to apply for the subsidy. Best regards