Family housing grants ('Baukindergeld') for first-time buyers of new or existing homes

Subject: Family housing grants ('Baukindergeld') for first-time buyers of new or existing homes

In its answer to my written question No E-004806-18, the Commission states that Germany’s rules governing family housing grants ‘can be qualified either as a social advantage in the sense of Article 7(2) of the regulation (EU) No 492/2011 on freedom of movement for workers or as a benefit in matters of housing in the sense of Article 9 of that regulation’. The Commission is currently assessing whether these grants may be extended to cross-border workers only in respect of property situated in Germany.

On 7 March 2019, meanwhile, the Commission decided to send a reasoned opinion to Germany in response to its refusal to grant the Wohnungsbauprämie housing premium to cross-border workers. The Commission’s grounds for this were that taxpayers resident in another Member State or an EEA country who both work in Germany and are subject to German income tax are being discriminated against vis-à-vis resident taxpayers.

(1) What conclusions has the Commission drawn from its assessment of Germany’s family housing grant system?

(2) Are the conclusions the same as on the Wohnungsbauprämie, given that discrimination against cross-border workers was also identified in that case?

Answer given by Ms Thyssen on behalf of the European Commission

(29 August 2019)

The Commission notes that there are no nationality requirements concerning persons who may benefit from the German family housing grant. However, the scheme requires both the ‘acquired housing’ and the ‘habitual residence’ to be located in Germany. In addition, the child living in the household must be eligible to receive German child benefits.

The Commission considers that both these conditions, namely of the location of the housing in Germany and the requirement to be resident in Germany, may be indirectly discriminatory for frontier workers.

Depending on the objectives and conditions of the grant, the scheme could be considered under EC law on free movement of workers as a family benefit, falling under the material scope of Regulation (EC) No 883/2004 and/or as a benefit falling under Regulation (EU) No 492/2011.

According to settled case law, the entitlement to family benefits under Regulation No 883/2004 cannot be made dependent on the residence of the worker or his/her family members in the Member State providing the benefit.

According also to settled case law, indirect discrimination on the ground of nationality under Regulation No 492/2011 is permissible only if it is objectively justified. In order to be justified, it must be appropriate for securing the attainment of a legitimate objective and must not go beyond what is necessary to attain that objective. It is for the national authorities to show that these conditions are fulfilled.

Both Regulation 883/2004 and Regulation 492/2011 are directly applicable here, which means that they can be invoked by private persons before national courts.

The Commission intends to contact the German authorities with a view to clarifying the legal situation.