Housing benefit 2025: Reducing housing costs with state subsidies

The real estate market in Germany is facing major challenges: Rising rents, expensive energy costs and new energy-related renovation obligations are placing an increasing burden on households. One key question is therefore particularly relevant for owners and tenants on low or medium incomes: How can I secure affordable housing in the future? The answer for many is Housing benefit.

This state subsidy instrument specifically relieves lower-income households of housing costs. Housing benefit is not a substitute for social welfare, but a legally guaranteed subsidy that reduces housing costs for both tenants and owner-occupiers. In this article, you will learn everything you need to know about Housing Benefit 2025, the new Housing Benefit Plus supplement, who is entitled to it, how to apply and what financial benefits you are entitled to.

Housing Benefit Plus: The 2023 reform for more relief

The improved Housing Benefit Plus has been in force since January 2023, making important adjustments to the current challenges in the housing market:

• Heating cost component: Rising energy prices will be taken into account through an additional supplement so that actual housing costs are better covered.
• Expanded group of people: Housing Benefit Plus opens up the subsidy to more households, including many low-income earners who were previously not eligible.
• Regional rent levels: The calculation will be more closely aligned with regional rent levels, resulting in higher levels of support, particularly in large cities with high rents.
  
  

These adjustments make Housing Benefit Plus an important instrument in the fight against rising housing costs, especially in conurbations.

Who receives housing benefit?

When do you start receiving housing benefit? Households with an income below the regional income limits who do not receive priority social benefits are entitled to housing benefit. This includes in particular

• Tenants of apartments, houses or other forms of housing
• Owner-occupiers who live in their property themselves
• Families with a low income
• Single parents
• Pensioners and senior households
  
  

People who already receive benefits such as citizen's allowance, social assistance, unemployment benefit II or BAföG arenot eligible.

Calculating housing benefit: Example calculation for a 3-person household

The Müller family lives in a 70 m² rented apartment in a large city (rent level IV). The family's monthly net income is 2,400 euros, the gross rent is 850 euros.

• Regular housing benefit: 150 euros per month
• Heating cost supplement through Housing Benefit Plus: 60 euros per month
• Total housing benefit: 210 euros per month
  
  

This means an annual saving of 2,520 euros on housing costs - a noticeable financial leeway that can be used for living expenses or reserves, for example.

Housing benefit for owners: burden allowance for owner-occupied residential property

Owner-occupiers can also receive housing benefit. This is known as the encumbrance allowance. You are eligible if you live in a property yourself and incur the following costs:

• Interest and repayments for construction or renovation loans
• Ongoing operating costs and ancillary costs
• Maintenance and modernization expenses
  
  

Important: The property must not be rented out, but must be used exclusively for your own purposes. Housing Benefit Plus is also applied here, so that increased heating costs are taken into account.

Applying for housing benefit - step by step

Applications for housing benefit are made in writing to the relevant housing benefit authority - usually the housing office in your town or municipality.

Documents required:

• Current rental agreement or proof of ownership
• Proof of income of all household members (e.g. payslips)
• Registration certificate (registration of residence)
• Proof of service charges and heating costs (bills, invoices)
• Identity card or passport
  
  

The application should be completed carefully and submitted in full, as missing documents will lead to delays. The processing time is usually between 4 and 6 weeks. Important: Retroactive approval is not possible; entitlement begins at the earliest with the month in which the application is submitted.

Tip: Use the federal government's housing benefit calculator for an initial assessment of your entitlement.

Housing benefit checklist: Check your entitlement now

• Do you live in your own or rented accommodation?
• Is your household income below the applicable housing benefit limit?
• Do you not receive any overriding social benefits (Citizen's Allowance, ALG II, BAföG)?
• Do you have all the necessary proof and documents together?
• Have all persons living in the household been correctly stated in the application?
• Have you submitted the application to the relevant housing benefit authority in full and on time?

Housing benefit and other housing subsidies

In addition to housing benefit, there are other state subsidies for housing in Germany, such as the Baukindergeld, KfW subsidy programs for energy-efficient construction and renovation and municipal housing subsidies. These programs can be combined to further reduce housing costs and finance energy-efficient renovations.

Our tip: Seek additional advice from an experienced real estate expert. This will enable you to make professional use of regional particularities, individual funding opportunities and the optimal application process.

Other important questions about housing benefit