Finance Minister Magnus Brunner (ÖVP) confirmed this to the “Kleine Zeitung”. The proposals are regarding “budget implications, accuracy and state aid law”. Interest depreciation on home ownership or declining balance depreciation were in line with ÖVP considerations. But Brunner is “not sure” regarding the 100,000 euro home ownership grant.
Budget feasible and accurate?
“I’m not sure whether this has been thought through to the end, is budget-wise feasible, makes sense and is accurate,” says Brunner regarding the proposal to grant up to 20 percent or up to 100,000 euros as a home equity grant. “There are certainly more sensible measures.” The government politician also reminds the “Kleine” (Wednesday edition) of 300 million euros that are “reserved for housing” in the so-called future fund of the financial equalization. Brunner is once once more insisting on relaxing the KIM regulation, which sets out the lending rules.
The required, non-repayable home bonus had previously caused a need for explanation to the FSG boss and top construction trade unionist Josef Muchitsch (SPÖ) on Tuesday. He and WKÖ boss Harald Mahrer (ÖVP) had demanded the day before that the capped bonus should cover “up to 20 percent of the costs” and be “in the direction of 100,000 euros”. But in order to stimulate construction, the focus should be on social housing, emphasized Muchitsch on Tuesday.
Housing subsidies as the “best lever”
The home ownership bonus was a suggestion from the employers that was incorporated into the social partnership paper, explained the chairman of the Bau-Holz union (GBH) in the Ö1 “Morgenjournal”. The promotion of home ownership does not require “the greatest volume” that is necessary to restart the construction engine. “Housing subsidies are certainly the biggest and best lever here.” But creating a home has also become a big problem for young families in rural areas. There are therefore various suggestions for creating a home of your own. “In what form, in what orientation, with what guidelines, that is all still to be evaluated or discussed.”
SPÖ boss Andreas Babler also thinks little of such a home ownership bonus. At a joint press conference with Muchitsch on Tuesday, he declared: “This is not a social democratic model.” Nevertheless, there is a need for discussion, says Babler: “It’s regarding the content dimension.” There is currently a situation that makes it impossible for young people to create a livelihood for themselves. Instead, they would have to live with their parents for longer and might only think regarding family planning later. The SPÖ also sees itself as a party of house builders. “People should be able to create something with their income,” says Babler.
“Not the first choice”
But Michael Klien, an economist at the Economic Research Institute (Wifo), is also skeptical regarding the construction package: A grant of up to 100,000 euros is “not the first choice,” says Klien. This funding would be very expensive, loans or other funding with financial returns would be better, said Klien in the Ö1 “Mittagsjournal”. The KIM regulation, which regulates the granting of mortgage loans, might be reviewed. And: “The hour for housing subsidies would have come once more,” said Klien. Klien also suggested that the amount of the loan might be increased and access to the funding made easier.
A large home should not be eligible for funding, or so Muchitsch said before appearing together with Babler. However, due to the abolition of the earmarking of housing subsidies, this area “fell by the wayside,” recalled Muchitsch. It’s regarding promoting homes that have problems with debt financing. Things to consider include the size of the home and the prevention of opportunities for misuse. Interest rate subsidies for young families’ first homes are also worth considering. Building land must be secured for social housing, said the trade unionist, analogous to the SPÖ, for which he sits in the National Council. Renovating old sports facilities is a good idea from Vice Chancellor and Green Party leader Werner Kogler. Overall, a comprehensive package is needed.
The turquoise-green government is still discussing internally what an announced economic stimulus package including construction aspects and home ownership support should look like. The FPÖ wants to increase federal funding for non-profit housing to one percent of GDP and support loan interest rates. The NEOS don’t want a home ownership bonus because that would be “pure watering can”.
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