From rising energy costs to new requirements under the German Building Energy Act (GEG) – we take a look at the key developments that will come into force in January 2024.
1. Energy saving brakes are expiring: additional costs for almost all households
The government price brakes on electricity and gas expired at the end of 2023, leading to higher costs for households. The federal government is no longer financing the stabilization of grid usage fees, which led to a significant increase in energy prices at the beginning of the year. All consumer protection agencies and portals agree that most households would benefit from switching to a cheaper electricity provider now. Landlords, on the other hand, are obliged to pass on any relief resulting from gas or district heating price brakes to tenants in their utility bills.
2.CO2 price rises: Impact on landlords and tenants
TheCO2 tax will increase to €45 per ton starting in January 2024, which will lead to additional costs for consumers. Landlords are required to absorb a portion ofthe CO2 price increase, with the amount depending on the square footage of the residential building. As a result, they will have to adjust their operating cost statements accordingly. The degree of adjustment varies depending on the energy status of the building, with landlords in buildings with poor energy efficiency having to bear a higher share of the costs. In extreme cases, this share can be as high as 95%. Conversely, however, anyone who buys the gas for floor heating or a gas stove themselves must bill the landlord for their share in order to be reimbursed.
3. New requirements of the GEG: Renewable energies for heating systems
The Building Energy Act (GEG) stipulates that newly installed heating systems must be operated with at least 65% renewable energy from a certain point in time. Landlords can pass on the costs of GEG-compliant heating systems to tenants and increase the rent, especially if public subsidies are availablehowever, homeowners need not worry about the new heating law coming into force in 2024. The 65% requirement will only come into force once municipalities have submitted their municipal heating plans. This is expected to be the case from mid-2026 in large municipalities and from 2028 in small municipalities. Nevertheless, it makes sense to renovate a property soon so that it can remain competitive on the real estate market in the long term.
4. VAT increase for gas prices from March 2024
The value added tax on gas prices will increase from 7% to the normal 19% from March 2024, leading to further higher costs for consumers.
5. IHK certification for WEG administrators from June 2024
According to the new Condominium Act, administrators appointed by WEGs must be IHK-certified from June 2024.
6. Elimination of the ancillary cost privilege from July 2024
From July 2024, TV cable contracts may no longer be passed on from landlords to tenants. Tenants will have the freedom to decide whether to continue their existing cable TV contract or switch to alternatives.
Outlook:
- The planned adoption of Solar Package 1 will facilitate shared building services and the production of solar power.
- In the second quarter of 2024, owners are expected to have the option of installing a plug-in solar device on their balcony ("balcony solar system") to generate up to 20% of their household electricity themselves. Landlords will then no longer be allowed to prohibit this.
- An amendment to the Condominium Act will enable virtual owners' meetings.
Conclusion
The year 2024 will bring a number of challenges for owners and tenants in the residential sector, but also some relief. From rising energy costs to new requirements under the Building Energy Act, it is important to be well informed and take appropriate measures in good time.
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