Altersvorsorge­depot for a property: how does withdrawal work from 2028?

What is the pension investment account?

From 1 January 2027 the pension investment account is one of the contract types of the new subsidised pension, often called the “new Riester pension”. You save in funds and ETFs, that is funds that track a stock market index. The state adds up to €540 a year if you pay in €150 a month, and up to €300 for each child. If you are under 25 at the start, you get a one-off €200. The same subsidies are available for contracts with a guarantee and for the home savings contract. The three routes at a glance.

The money is meant for your pension. If you simply have it paid out before then, you have to pay back the subsidies and tax benefits. The most important exception is your own home.

What you may withdraw the money for

• Buying or building a flat or house
• Paying off or refinancing a loan that you took out to buy or build this home
• Compulsory shares in a housing cooperative (Wohnungsgenossenschaft), if you live there yourself
• Energy-saving renovation by a specialist firm, for example new heating, windows or insulation
• Alterations to remove barriers, for example a level-access shower

Renovation and alterations must meet technical requirements, and a specialist firm confirms that they are met. The home must be your main residence or the centre of your life. The subsidy applies to homes that you own in full or in part, to a cooperative flat that you live in yourself and to certain permanent rights of residence. The home must be located in the European Union or the European Economic Area, that is in the EU or in Norway, Iceland or Liechtenstein. A rented-out flat or a holiday home is not subsidised.

Withdrawal must be in your contract

From 2027 the provider may offer withdrawal for your home, but does not have to. The law allows it “provided the contract terms allow it” (§ 92a Income Tax Act). Check three things before you open a pension investment account:

1. Is withdrawal for your home in the contract terms? In the law it is called Altersvorsorge-Eigenheimbetrag, the amount for your own home. If it is missing, you can only get the money for your home by switching to another contract.
2. What happens if the stock market is down just when you want to buy? Example: if prices fall by a fifth, €20,000 of savings has become €16,000, in exactly the year in which you need the equity.
3. What does switching to another contract cost? You keep the subsidies when you switch; the costs are set out in the provider’s terms.

How withdrawal works

1. Check the contract: Is withdrawal for your home in the terms?
2. Set the amount: at least €3,000, at most the entire subsidised balance. With the pension investment account, the price on the day of withdrawal counts.
3. Apply for withdrawal: Withdrawal works through an application with supporting documents. The central subsidy office (Zentrale Zulagenstelle für Altersvermögen) at the Deutsche Rentenversicherung, the German statutory pension insurance, is involved, Zulagenstelle for short. Your provider tells you where the application goes and which documents are needed. Allow time for this before the notary appointment.
4. Payout for the purpose: The money goes into the purchase price, building costs, renovation or the loan.
5. Keep the documents: purchase contract, loan agreement and invoices. If you later move out or sell, report this to the Zulagenstelle.

Watch the timing: The pension investment account starts in 2027; the new rules apply to withdrawals from 1 January 2028. If you put money from a subsidised contract into your home before then, the old rules still apply to you. The home subsidy account then increases by 2% every year and is taxed until the age of 85.

The home subsidy account explained simply

No tax is due on the withdrawal itself. However, the Zulagenstelle records the amount withdrawn, including subsidies, in your home subsidy account. This is only a record; you do not pay any money into it. It shows how much subsidised money is in your home. You pay tax on this amount in old age, like a pension. Here, the start of the pension means the start of the payouts set in your contract. It does not have to coincide with the start of your statutory pension.

Example: You are 40 years old in 2027, save €150 a month from 2027 up to and including 2034 and buy in 2035. Your contract provides for payouts from 67. You have paid in €14,400, and €4,320 came from the state. You withdraw the €18,720 as equity. Exactly this amount is recorded in your home subsidy account and does not grow any further. The payouts start in 2054. From 2055 you pay tax on €3,744 a year for five years, on top of your other income. At a tax rate of 25%, that is 25 cents of tax on every additional euro, this comes to about €940 a year. From 2060 you are free to sell the home or rent it out. If your entire taxable income including this amount stays below the basic tax-free allowance (Grundfreibetrag, the amount up to which nobody pays income tax), no tax is due.

Simplified calculation, without interest, costs and price fluctuations. No tax advice.

When life changes: selling, moving, separation

Until the home subsidy account has been taxed in old age, you live in the home yourself. Plans still change. Then a basic rule applies: you do not pay back subsidies. In the worst case, the remaining amount in the home subsidy account is taxed all at once, and for most situations there is a way to avoid even that. Report moving out or selling to the Zulagenstelle and say straight away what you plan to do. The deadlines count from the last year in which you lived there yourself. “No tax now” means: tax is paid as planned in old age.

For marriage and separation, the same applies to a registered civil partnership.

And if no route fits? Then the remaining amount is taxed all at once, usually for the year you move out. If you first announced buying again, paying in or returning, this only happens once you give that up or the deadline expires. Example: you saved €150 a month for seven years and put €16,380 into the home, €3,780 of it subsidies. At a tax rate of 25%, taxing it all at once costs about €4,100. This is offset by the €3,780 of subsidies and about €320 of additional tax benefit from the savings period. At the same tax rate, this roughly balances out. It becomes more expensive if the one-off amount clearly raises your tax rate in the year of the sale. Simplified calculation, no tax advice. Get tax advice before you sell.

Not bought a home yet and moving away? The contract can stay; moving away during the savings period does not by itself lead to subsidies being reclaimed. If you live outside the EU and the European Economic Area from the start of the payouts or later, subsidies and tax benefits for the money in the contract can be reclaimed.

You sell: how does the money get back into your pension savings?

If your plans change and you sell, you have three routes: buy a home of your own again, pay the remaining amount into a subsidised contract, or have the amount taxed all at once. If you do not want to buy again, you usually choose paying in. This is how it works:

1. Report the sale: Tell the Zulagenstelle that you are moving out and say straight away that you want to pay in.
2. Ask for the amount: You have to pay in the remaining amount in your home subsidy account. That is only the part that went from the subsidised contract into the home, including subsidies. Under the new rules it does not grow; it stays as high as the withdrawal. The rest of the sale proceeds belongs to you.
3. Choose a contract: any subsidised pension contract in your name, for example a home savings contract or a pension investment account. If you want to buy again later, the home savings contract gives you more flexibility.
4. Pay in on time: by the end of the year after the last year you lived there.

After that, the home subsidy account is correspondingly smaller, and the money is back in the contract as pension savings. It is taxed in old age when it is paid out. If you pay in less than the remaining amount, clarify beforehand with a tax advisor what happens to the rest.

Example figures, without costs, interest and price fluctuations. No tax advice.

How does withdrawal affect your pension?

What you withdraw is missing from the contract later. If, for example, you take three quarters of the balance for your home, a quarter initially remains in the contract. How much this becomes by the time the payouts start depends on further payments, returns and costs. In return you live without rent or with a smaller loan. What living rent-free in retirement brings. With the pension investment account, the amount you can withdraw also depends on the stock market price on the day of withdrawal.

Pension investment account or home savings contract for your own home?

In short: If your own home is only a possibility in the distant future, a pension investment account with withdrawal for your home can suit you. If the goal is firm, there is a lot to be said for the home savings contract: no stock market risk shortly before buying, withdrawal is the purpose of the contract, and the interest rate for the later loan is fixed when you sign. With a home savings plan approved for this purpose, even the repayment of the home savings loan can be subsidised. Calculate how much subsidy your household gets.

INTERNA only arranges the home savings contract and does not advise on pension investment accounts. All routes compared in detail (in German), how the home savings loan works.

Combining a pension investment account and a home savings contract

Each person gets the subsidies only up to the maximum. Couples can each have their own contract. If you already have a pension investment account and the purchase is getting closer, you can transfer the balance to a subsidised home savings contract. You keep the subsidies; the costs of switching are set out in the terms of your account. Capital-forming payments from your employer (vermögenswirksame Leistungen) can also go into a second, ordinary home savings contract.

Do you already have a Wohn-Riester contract?

• If you sign a new subsidised contract from 2027, this brings all your old contracts into the new system for the subsidy. This cannot be undone.
• For your home, what counts is when you put subsidised money into it: before 1 January 2028 the old rules apply, after that the new rules, with or without switching. Separate transitional rules apply to subsidised loans and pre-financing.
• If you pay in very little at the moment, you often get the full subsidy in the old system. Do the calculation before switching. What you should check first.

Which route suits you?

• You want to buy in the next few years: subsidised home savings contract; the balance becomes equity. How much equity you need.
• You already have a loan for your own home: save in parallel and use the balance to pay down the loan from 2028. How the subsidy for repayment works.
• You want to renovate or make alterations: from as little as €3,000. What counts.
• You are young and the goal is still open: pension investment account with withdrawal for your home, or home savings contract. Under 25 there is a one-off €200. About the starting bonus.
• You are certain you will never live in a home you own: Who the Eigenheimrente is not worth it for.

Conclusion

From 2028, withdrawal for your home becomes much simpler: a minimum of €3,000 for all purposes, no more increase of 2%, and tax spread over five years instead of until the age of 85. The pension investment account has two catches: withdrawal is not in every contract, and the balance moves with the stock market. If you have firm plans to live in a home of your own, you should also consider the subsidised home savings contract. It gets the same subsidies and is built for exactly this purpose.

Frequently asked questions

Read more

• How does the home savings loan (Bauspardarlehen) work with the home-ownership pension (Eigenheimrente)?
• New Riester pension 2027: what does it bring for your own home?
• How much equity do I need for a flat?
• This page in German