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Thermal‑energetic renovations for rented residential properties
The eco‑special‑expenses lump sum has been extended by the eco surcharge for rented residential properties.
Home owners who invest in the thermal‑energetic renovation of their buildings or replace their fossil heating systems with climate‑friendly alternatives benefit from a new tax incentive instrument. The so‑called “eco‑special‑expenses lump sum” allows certain costs associated with these environmentally friendly measures for privately used buildings to be deducted for tax purposes, thereby reducing the financial burden. This incentive has now been extended by the eco surcharge for rented residential properties.
The eco‑special‑expenses lump sum applies to two main areas:
In order to claim the eco‑special‑expenses lump sum, the applicant must receive a grant under the Environmental Promotion Act (Umweltförderungsgesetz). To utilise the eco‑special‑expenses lump sum, the application must be submitted directly to Kommunalkredit Public Consulting as part of the grant registration. The lump sum is automatically taken into account in the income‑tax return/employees’ assessment.
In addition, the actual expenses incurred – after deduction of public claims – must exceed EUR 4,000 for thermal‑energetic renovations and EUR 2,000 for the “heating‑boiler replacement”. For a funded thermal‑energetic renovation, EUR 800 per year, and for the funded “heating‑boiler replacement”, EUR 400 per year, are allocated. These amounts are automatically considered in the assessment for a total of five years, starting with the year of the grant disbursement. Consequently, a total of EUR 4,000 respectively EUR 2,000 becomes tax‑effective. If another measure is undertaken within this period, the period for tax deductibility is extended to ten years.
Only for natural persons
The incentive is available exclusively to natural persons. In condominium ownership communities, all owners may apply for the lump sum, whereas corporations such as GmbHs or associations are not entitled. For partnerships, the lump sum can be considered for a partner only if the partner is a natural person and the expense does not constitute a business expense.
Previously, the incentive could only be claimed for privately used buildings. With the new, two‑year‑limited “eco surcharge”, renovation expenses for buildings that are let for residential purposes are now also supported. The eco surcharge of 15 % can be taken into account as a business expense or as advertising costs for expenses on thermal‑energetic renovations or for the replacement of a fossil heating system with a climate‑friendly heating system. It applies to rental and leasing income for expenses incurred in the years 2024 and 2025, and to business income in the fiscal year starting in 2024 and the following fiscal year.
The eco‑special‑expenses lump sum and the eco surcharge provide important incentives for home owners to invest in improving the energy efficiency of their buildings and thereby contribute to climate protection. With a direct tax relief the financial outlay for renovation measures can be significantly reduced.
The eco‑special‑expenses lump sum applies to two main areas:
- On the one hand for the thermal‑energetic renovation of buildings, such as the insulation of walls, ceilings and roofs or the replacement of windows or external doors, in order to improve energy efficiency.
- On the other hand for the replacement of fossil heating systems with climate‑friendly alternatives such as heat pumps, wood heating or district heating.
In order to claim the eco‑special‑expenses lump sum, the applicant must receive a grant under the Environmental Promotion Act (Umweltförderungsgesetz). To utilise the eco‑special‑expenses lump sum, the application must be submitted directly to Kommunalkredit Public Consulting as part of the grant registration. The lump sum is automatically taken into account in the income‑tax return/employees’ assessment.
In addition, the actual expenses incurred – after deduction of public claims – must exceed EUR 4,000 for thermal‑energetic renovations and EUR 2,000 for the “heating‑boiler replacement”. For a funded thermal‑energetic renovation, EUR 800 per year, and for the funded “heating‑boiler replacement”, EUR 400 per year, are allocated. These amounts are automatically considered in the assessment for a total of five years, starting with the year of the grant disbursement. Consequently, a total of EUR 4,000 respectively EUR 2,000 becomes tax‑effective. If another measure is undertaken within this period, the period for tax deductibility is extended to ten years.
Only for natural persons
The incentive is available exclusively to natural persons. In condominium ownership communities, all owners may apply for the lump sum, whereas corporations such as GmbHs or associations are not entitled. For partnerships, the lump sum can be considered for a partner only if the partner is a natural person and the expense does not constitute a business expense.
Previously, the incentive could only be claimed for privately used buildings. With the new, two‑year‑limited “eco surcharge”, renovation expenses for buildings that are let for residential purposes are now also supported. The eco surcharge of 15 % can be taken into account as a business expense or as advertising costs for expenses on thermal‑energetic renovations or for the replacement of a fossil heating system with a climate‑friendly heating system. It applies to rental and leasing income for expenses incurred in the years 2024 and 2025, and to business income in the fiscal year starting in 2024 and the following fiscal year.
The eco‑special‑expenses lump sum and the eco surcharge provide important incentives for home owners to invest in improving the energy efficiency of their buildings and thereby contribute to climate protection. With a direct tax relief the financial outlay for renovation measures can be significantly reduced.