Hessengeld: the first-home subsidy in Hesse

What the subsidy is

Hesse charges a transfer tax of 6% of the purchase price, one of the higher rates in Germany. The Hessengeld is the state’s answer: a grant towards that tax, not a reduction of it. The Hessian finance ministry stresses that the two cannot be netted: you pay the full tax first, then you apply for the grant. It was decided by the state cabinet on 23 February 2024 as part of a quick-start programme, and applies retroactively to purchases from 1 March 2024. The date that counts is the date of the notarial deed of sale; there are no exceptions to that cut-off.

The three basic conditions

According to the ministry’s question-and-answer guide, any natural person qualifies if three points are met:

1. First acquisition of a home you will live in. New and existing homes, building plots where you will live in the future home, co-ownership shares, and heritable building rights (Erbbaurecht) all count. The type of building, its age and its energy efficiency are irrelevant.
2. Contract from 1 March 2024, and the tax already settled. The tax must have been assessed and paid in full before you apply. The guide says to apply only once your notary tells you the clearance certificate (Unbedenklichkeitsbescheinigung) has arrived; see the clearance certificate guide.
3. The property is in Hesse on the day of the notarial deed.

Nationality does not matter. The guide says that people without a German passport can apply; you need valid identity papers (passport, residence permit or identity card, translated if not in German) and a German tax identification number. See tax ID for property buyers. Marriage is not required either, but every buyer must be named in the notarial contract to count towards the amount. Neither income nor property value is tested.

How the amount is worked out

The figure is €10,000 for each buyer who qualifies (maximum €20,000) plus €5,000 for each child under 18 who moves in, with no limit on the number of children. The total can never exceed the transfer tax paid. Only the children and buyers present on the day of the contract count: a child not yet born on that day cannot be included, even if born before the move.

The ministry’s own examples, with a 6% tax:

• Two buyers and two minor children buying a €400,000 house: the potential grant is €30,000, but the tax is €24,000, so the grant is €24,000, paid as €2,400 a year.
• The same family buying at €500,000 (tax €30,000) gets €30,000, i.e. €3,000 a year; at €600,000 (tax €36,000) the grant stays at €30,000.
• Two buyers with no children at €300,000 (tax €18,000) get €18,000; at €400,000 or more the cap of €20,000 applies.

Part-rented houses are covered in proportion: only the tax on the share you live in is eligible. In the ministry’s example of a €600,000 two-family house where you occupy two thirds of the floor area, the base is €24,000 of tax, not €36,000.

”First home” is strict

Ownership of any other home before the contract date blocks you, anywhere in the world: a holiday flat, a rented property, a commercial property or an empty one. A property inherited or received as a gift before the contract also blocks you, a share in a home blocks you, and selling it before applying does not undo it. Selling it years ago does not help either: the ministry says what matters is that you have owned a property at some point. Some holdings are harmless: land that cannot be built on (forest, farmland, water), buildings unfit for housing such as a garage or a holiday bungalow where permanent residence is not allowed, and homes held through a company rather than personally.

When several people buy together, only those who are first-time owners count: if one buyer already owns a home and the other does not, only the other qualifies, and the cap follows that person’s share of the tax.

Where no tax is due, there is no subsidy. Purchases from parents, children, stepchildren, grandparents, grandchildren, spouses and registered partners are exempt from the tax, so the Hessengeld does not apply. Inheritances are exempt too. See transfer tax exemptions.

Moving in

The home must be your main residence, evidenced by a registration certificate (Meldebescheinigung); a secondary residence does not count. If the home is not ready or is still let, you may apply earlier and receive an approval that depends on a condition: the certificates of all moving-in persons must be uploaded within three years of your application, a hard deadline with no exception even for building delays. The guide therefore advises applying only when your move is foreseeable. The money is paid after the proof, in ten equal yearly instalments. A person named in the application who does not move in is dropped, and the grant is reduced accordingly.

Moving out later is not penalised: the ministry says that if you leave after four years and sell, payments continue. A move-in “pro forma”, just long enough to get the money, is not eligible.

The application

Applications are made online only, through the customer portal of the state’s development bank (WIBank), after the purchase. The ministry says applications are possible until 31 December 2029; the programme is limited to five years at first, depends on the annual budget decision and could be changed by a new government. The grant is not taxable and does not affect the rate of tax on other income, according to the ministry, though individual questions go to your tax office.

Which professional to consult

Your notary tells you when the clearance certificate has been issued (see the notary profession page). For questions on the tax treatment of the grant, ask the tax office; for how to structure a purchase with family members, a tax adviser (Steuerberater) can help. Payotte does not list or rank professionals by name.