Are there any support measures for owner-occupied residential property as part of private pension provision?

Yes.

With "Wohn-Riester", the state subsidizes the construction, purchase and barrier-reducing conversion of a home and (from 2024) the energy-efficient refurbishment of a home. Funding is also available for the repayment of a loan that you have taken out to purchase or build your own home. The home must be your main residence, be occupied by you and be located within the EU or the EEA (Iceland, Liechtenstein and Norway). Vacation or weekend homes are not eligible.

You must also be entitled to an allowance (e.g. compulsorily insured in the statutory pension insurance scheme, civil servant). If you are entitled to a subsidy, there are two options for funding.

You can either withdraw all or - under certain conditions - part of the money saved under the Riester contract and use it to build a house or repay a loan taken out to buy a home (Section 92a (1) sentence 1 no. 1 EStG). This withdrawal does not constitute a harmful use. You therefore do not have to repay the allowances and tax benefits received.

However, you can also use the subsidy for a loan that you have taken out to build a house (or another subsidized measure). You must be using the property yourself at the time the debt is repaid.

like the classic Riester contract, "Wohn-Riester" is taxed retrospectively.
Subsequent taxation means that the contributions are tax-advantaged in the payment-in phase (via allowances or special expense deductions), but the pension you receive in the payout phase must be taxed.
With "Wohn-Riester", however, no pension is paid out that could be taxed. Instead, the tax is levied on the basis of the so-called "Wohn-Riester" account, on which the Central Allowance Office for Retirement Assets (ZfA) records the beneficiary withdrawals, repayments and allowances. Taxation takes place in accordance with § 22 No. 5 of the Income Tax Act (EStG) and begins with the payout phase. Unless otherwise agreed in the contract, the start of the payout phase is the age of 67. You have two options:

1. You can spread the amount in the housing promotion account evenly over the years between the start of the payout phase and the year in which you reach the age of 85. This part of the amount is then taxed annually. The balance of the housing promotion account is reduced accordingly year by year.

2. Alternatively, you can also pay tax on the amount in the housing promotion account as a lump sum. In this case, only 70% of the amount entered in the housing promotion account is taxed. You can make use of this option either at the beginning of the payout phase or in a later year.

Further details can be found in the BMF letter "Tax incentives for private pension provision" dated 05.10.2023, BStBl I p. 1726

• on the types of preferential use, para. 257 - 283,
• on harmful use, margin no. 284 - 289, exceptions to harmful use, margin no. 287,
• on the housing subsidy account, para. 169 - 189.