Tuesday, 26 January 2010

Residential Riester


General


Something commonly known as "living" Riester "is referred to the proposed retirement home, which is designed to promote the construction or purchase of a property. Since it was clear the end of the previous homeowner (in 2006), thought the grand coalition under a new funding options for the purchase of real estate. At the same time it should be cemented an important component for retirement savings. Meanwhile, a bill has been submitted, which now stands in the discussion. The adoption of the law in the summer of 2008 is considered safe.

History of residential Riester

Since it became apparent a few years ago the end for the popular home buyers were in the federal government made an early reflection on how the acquisition of private property can be officially supported in the future. After all, homeownership is an important pillar of private pensions. In addition, the construction industry feared heavy losses right through the elimination of the homeowner.

Early on, therefore, engaged the coalition parties, with the possibility to include residential property in the Riester pension. Pretty soon were doing on difficult issues such as the deferred taxation, which is a hallmark of the Riester products. Although payments are tax free, but the later payments to be taxed. It became clear that a comprehensive approach needed to be created, which should be the retirement savings, the construction industry and the public facilities needs. Also on the abolition of the premium housing was being considered.

Consideration was also an option: After owners should be able to choose when they reach the retirement age, whether they want to pay more for a tax on the capital funded or pay off - at a discount, say, 25 percent - all at once.

Also on the conditions of tax support was being considered. One suggestion was that buyers may see 75 percent of the data collected in the Riester contract in order to supplement the capital and equity. Instead of an additional sentence should serve Renta Riester subsidy repayment.


Problem area downstream taxation

) As for the problem of deferred taxation (taxation only the payments made in lieu of payments is a solution in sight. It is now funding a fictional account, created the so-called "Residential Funding Account" in which the payments are initially recorded as normal as in a conventional Riester contract. The resulting tax incentives is recorded at the beginning of the pension there. Nevertheless, however, lies the capital in a property. The Riester savers must now repay the reported amounts of taxes during the pension period. Here an option is installed: it can pay back taxes in installments gradually or all at once the total amount. In this case, he receives a discount of 30 percent. However, it must undertake to keep the property for 20 years.

What is living Riester?

After the draft is the accrued capital Riester basically used to fund-occupied dwelling. This may be a condo, an apartment in a house or a Genossenschaftswohung.
However, the property shall also be principal residence of the Riester-saver, that also constitute the center of life. In addition, the support can not be used on a foreign holiday or a retirement home, located outside of Germany.

The age of a house after upgrading to the current state is not eligible.

Are there new forms of savings?

Presumably, building societies and housing associations will offer a kind Riester savings agreement. This, the Riester incentives is combined with the building societies. It would then fund and bank savings plans, as well as the Riester pension even the fourth Riester product. According to the draft should specify here will be a uniform effective. This should be taken with other products for greater transparency and comparability.

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