Since German Bausparkassen are credit institutions, they are subject to all regulations of the German Banking Act and, hence, to governmental supervision by the Federal Banking Supervisory Office. Due to the unique character of the Bauspar system, a special by-law had to be added to the German Banking Act. This Bausparkassen Act was implemented in 1972 and adjusted in 1999. The act regulates the organisational structure of the Bausparkassen and sets forth the legal framework for the Bauspar business. It also regulates the minimum allocation requirements and contains provisions regarding the implementation of a reserve fund in order to stabilise the waiting periods. Click here for an English translation of the German Bausparkassen Act.
        
Almost all countries dispose of some kind of subsidy for private housing finance because it is known that the housing sector has positive effects on employment, economic growth and in general on socio-economic stability. What is important about subsidies is subsidy efficiency. Housing subsidies that are based on loan interest tax deduction bring about increasing loan amounts; they are non transparent and socially unfair. Income dependent and earmarked premiums in contrast are ascertainable, well quantifiable, hence, transparent and socially reasonable. Further more, they may be integrated into the Bauspar system easily. In Germany, the Bauspar system is subsidised by two different subsidy schemes, the House Building Premium and the Employee Savings Allowance. Click here (House Building Premium / Employee Savings Allowance) for an English description of these subsidy schemes.