Vermögensbildungsgesetz

The Vermögensbildungsgesetz, often abbreviated as VermBG, is a German law that promotes the accumulation of personal wealth. It was first enacted in 1961 and has been amended several times since then. The core principle of the VermBG is to encourage savings by providing state subsidies or tax benefits for individuals who invest in certain assets.

Initially, the law focused on direct savings plans and building society contracts. Over time, its scope has expanded to include a broader range of investment vehicles. The primary mechanism for achieving its goals is through the provision of "Arbeitnehmersparzulage" (employee savings bonus) and "Wohnungsbauprämie" (housing construction bonus). The employee savings bonus is a direct payment from the state to individuals who save a certain amount, provided their income does not exceed a specified limit. The housing construction bonus is aimed at encouraging savings for housing purposes.

The Vermögensbildungsgesetz plays a role in German social policy by aiming to reduce wealth disparities and empower citizens to build financial security. Eligibility for the bonuses and the specific investment options are subject to income thresholds and other conditions stipulated in the law. The legislation is periodically reviewed and adjusted to reflect economic conditions and policy objectives. Its overarching aim is to foster a savings culture and contribute to long-term financial stability for individuals.