Having your own home is a good start in life. Many parents try to help their grown-up children buy their first flat or house so that they can build a good life for themselves.

Even those who can afford it should not simply give the money to the children, as they will appreciate the value better if they have earned it. Parents should also leave the choice of flat or house to the children and only talk about a financial framework. Children who have grown up attach great importance to choosing their own home because they want to be independent. 

If you want to help your children finance their own home, you have two options. Parents can lend their children the necessary equity themselves by means of a personal loan, whereby they can agree a repayment plan with low interest rates. In order for the money borrowed from the parents to count as equity for financing by a bank, the private loan should be agreed separately and between the parents.

If you don't have enough money available to provide your children with equity, you can offer yourself as a guarantor to the bank. The prerequisite is your own creditworthiness. A guarantor is only necessary if the child's income alone is not considered sufficient, so the value of the property should be kept as low as possible. Being a guarantor means that the parents have to pay if the child is unable to pay, so they are legally obliged to do so. A guarantee also reduces your own creditworthiness. 

Of course, you can also give your children a home as a complete gift. However, if the property is given as a wedding gift, you should bear in mind that your partner may be entitled to half of the house in the event of a divorce. Taxes are also payable on the gift of a property in Germany, which is why it is better to sell a house officially. In any case, you should familiarise yourself with the laws of the Gift tax inform.