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Climate package – What's changing for homeowners

The climate package is now finalized. It was approved by the Bundestag in mid-November and the key components were passed by the Bundesrat at the end of November. The aim of the climate package is to reduce CO2 emissions so as not to further negatively impact the climate. Construction and housing are also to become more climate-friendly in the future. The black-red coalition is creating new incentives to achieve this. We reveal what changes this will mean for homeowners.

The building sector accounts for a relatively high proportion of CO2 emissions in Germany. Around 14 percent of total emissions are emitted by buildings. 26 percent of all energy in Germany is used for heating and hot water. To counteract this, there are new regulations relating to heating, renovations, and energy prices. While the building sector was responsible for around 132 million tons of CO2 in 2017, this figure is set to fall to just 70 million tons by 2030. The initial results of the 2020 climate package are expected to have a real impact on German citizens.

First of all, the climate package provides for a ban on oil heating systems in new buildings. According to this, it will no longer be permitted to install an oil heating system in a new building if a more climate-friendly heat generation system is also possible in the building. Homeowners are to be encouraged with a subsidy to replace their old oil or gas heating systems with climate-friendly systems or to switch to renewable energies altogether. A replacement bonus is planned, which will provide a 40 percent subsidy to create incentives for replacing old heating systems. Leasing offers are also to be promoted so that even more households can afford climate-friendly heating systems. Where renewable heat is not possible, the switch to efficient hybrid gas heating systems that use a proportion of renewable energies is to be promoted. In any case, however, the obligation to replace heating systems that are more than 30 years old will remain in place. If expensive repairs such as a burner replacement or a new tank are due for an oil heating system, homeowners should carefully consider whether it would be worthwhile to switch to climate-friendly alternatives at an early stage.

Further renovation measures are also to be promoted. These include replacing old windows with heat-insulating windows and insulating roofs and exterior walls. The subsidy is to be provided in the form of tax relief. Homeowners in all tax brackets will benefit from the tax deduction. For example, anyone who has new windows installed can reduce their tax liability by 20 percent of the cost of the new windows over a period of three years. Funding from KfW is also available as an alternative. Existing KfW funding programs are to be increased by ten percent.

Finally, there will be an increase in natural gas and heating oil prices. Heating oil will become more expensive every year as a result of CO2 pricing, which is part of the climate package. A price increase of 30 percent is already expected by 2030. Prices for natural gas will rise by around 20 percent during this period. The electricity price surcharge that consumers pay for the expansion of renewable energies is to be reduced. However, this will only save an average family a few euros per month. There will also be changes to energy consulting for residential buildings. For example, mandatory consulting will be introduced when there is a change of ownership. The planned subsidy programs are intended to cover the costs of such consultations.

Would you like to know how climate-friendly renovation could affect the sale price of your property? Contact us now! We will be happy to advise you.

Photo: © Faber14/Depositphotos.com
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