The German state pays up to €70 of housing bonus and up to €123 of employee savings bonus a year, the employer up to €480 of capital-forming benefits. Who is entitled and how the building blocks fit together.
In short
- Capital-forming benefits (VL): up to €40 a month from the employer, depending on the collective agreement; ask, often forgotten.
- Employee savings bonus: 20 percent on up to €400 in funds, 9 percent on up to €470 in building society savings, income limit €40,000.
- Housing bonus: 10 percent on up to €700 of building society contributions, income limit €35,000, use for housing.
- Together up to €670 of subsidy a year on a low income.
Capital-forming benefits
Many collective agreements and employers pay €6.65 to €40 a month as capital-forming benefits (vermögenswirksame Leistungen) if you present a suitable contract: a fund savings plan, a building society contract or repayment of a mortgage. The money is subject to tax and social contributions, but it is a gift. Whoever presents no contract gets nothing. Ask at every job change.
Employee savings bonus
The state tops up capital-forming benefits with a bonus if your taxable income is under €40,000 (married €80,000). For investment in an equity fund savings plan: 20 percent on up to €400 a year, so €80. For building society savings or mortgage repayment: 9 percent on up to €470, so €43. Both can be combined, together €123. You apply for the bonus in the tax return; it is paid out after the seven-year lock-up. Whoever gets no VL from the employer may divert the amount from salary themselves and still receives the bonus.
Housing bonus
For building society contributions there is a 10 percent bonus on up to €700 a year (married €1,400), so up to €70, at a taxable income under €35,000 (€70,000). Condition: the savings are used for housing, meaning construction, purchase, modernisation or repayment. Whoever is under 25 may use the money freely after seven years. You apply for the bonus annually at the building society.
The building society contract
A building society contract (Bausparvertrag) is a savings contract with a claim to a later loan at a rate fixed today. As a savings vehicle it brings little, under one percent plus bonus, minus a closing fee of one percent of the contract sum. As rate insurance for a later follow-up financing or for modernisation in ten years it makes sense, with a small contribution and subsidies that exceed the costs. Whoever never wants to build or buy takes the fund savings plan instead.
The combination
An employee on €32,000 of income with €40 of VL from the employer and their own €20 a month into a fund savings plan plus €60 into a building society contract receives: €480 of VL, €80 of bonus on the fund, €43 of bonus on the building society savings, €70 of housing bonus, together €673 a year, for €960 of own contribution. That is a subsidy rate of 70 percent no other product offers.
What to watch
Choose the VL fund plan as an ETF, not an expensive active fund; some providers have ETF VL contracts. Plan for the seven-year lock-up. Check the income limits annually; they refer to taxable income after work expenses and special expenses, which sits well below gross.
Try it yourself
Subsidy FinderSix questions on life situation, income, housing and plans: which German subsidies you are entitled to in 2026.ETF Savings Plan CalculatorContribution, return, term: how your savings plan develops over the years, with a chart and compound interest.Frequently asked questions
Do I get the bonus for ETF savings plans too?
Yes, provided the provider offers a VL-eligible contract. The requirement is an equity share of at least 60 percent.
What happens if I cancel before the lock-up ends?
The bonuses lapse; the savings and the employer share stay yours. There are exceptions for unemployment or marriage.
Is building society saving worthwhile without the bonus?
Rarely. Without subsidy it is a poorly paid savings product with a fee that only pays as rate insurance for a specific property.
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