As climate protection plays an increasingly important role in our lives, the state has long sought to provide tax incentives for climate-friendly building renovations. To this end, the legislator passed the Act Implementing the 2030 Climate Protection Programme in Tax Law, which has provided tax benefits for precisely such measures since 1 January 2020 (see § 35c EStG).
- Which measures qualify for tax relief?
Energy-efficient measures on buildings and apartments eligible for tax relief are (§ 35c Abs. 1 S.3 EStG):
- Thermal insulation of walls, roof areas and floor slabs
- Replacement of windows and exterior doors
- Replacement or installation of ventilation systems
- Replacement of a heating system
- Optimisation of an existing heating system, provided it is more than 2 years old
- Installation of digital systems for energy-related operation and consumption optimisation (smart home)
- Costs for energy consultants (approved under the funding programme "Energy Consultants for Residential Buildings" and equivalent energy efficiency experts).
2. Requirements for tax relief on energy-efficient measures
For an energy-efficient measure to qualify for income tax relief, the building or apartment must be located within the EU and used for the owner's own residential purposes (§ 35c Abs. 1 S.1 EStG). In addition, the property must be at least 10 years old at the time the energy-efficient measures are carried out (§ 35c Abs. 1 S.2 EStG). The relevant date is the start of construction. Furthermore, the energy-efficient measure must be carried out by a qualified specialist firm. After completing the work, this specialist firm must also provide the beneficiary with a certificate (in the prescribed form) confirming the measures carried out and that the requirements under § 35c EStG have been met. Finally, the beneficiary must be issued an invoice that lists the eligible energy-efficient measures, identifies the labour services provided by the specialist firm, and states the address of the eligible property (§ 35c Abs. 1 S. 7 EStG).
3. How much is the tax relief?
Over a total period of 3 years, 20% of the costs incurred for the energy-efficient measures can be claimed for tax purposes, capped at EUR 40,000 per property. This is distributed as 7% (maximum EUR 14,000) in each of the first two years and 6% (maximum EUR 12,000) in the third year of the relief. By contrast, costs for energy consultants and energy efficiency experts can be deducted immediately in the year they are incurred, at 50% of the costs.
4. Which companies qualify as specialist firms?
Specialist firms for energy-efficient measures include all skilled trade businesses operating in the field of building renovation. This covers the following sub-sectors:
- Masonry and concrete work
- Plastering work
- Painting and varnishing work
- Carpentry, joinery and cabinetmaking
- Heat, cold and stone sculpting work
- Well construction
- Roofing
- Plumbing
- Glazing
- Installation and heating engineering
- Refrigeration plant construction
- Electrical engineering and installation
- Metalworking
- Stove and air heating construction
- Roller shutter and sun protection systems
- Chimney sweeping
- Tile, slab and mosaic laying
- Concrete stone and terrazzo production
- Specialist window installers.
5. How do I obtain the tax relief?
To receive tax relief for energy-efficient measures, the expenses must be declared to the tax office in the income tax return.
Frequently asked questions
Frequently asked questions
Which energy-efficiency measures are tax-privileged under § 35c EStG?
Eligible measures include thermal insulation of walls, roof surfaces and floor slabs; replacement of windows and exterior doors; installation or replacement of ventilation systems; replacement of heating systems; and optimization of heating systems that are at least 2 years old. The installation of digital systems for energy-related operational and consumption optimization (smart home), as well as fees for certified energy consultants, are also eligible.
What requirements must be met for the tax incentive under § 35c EStG?
The building or apartment must be located within the EU, used for the owner's own residential purposes, and at least 10 years old at the start of the measure (the start of construction is decisive). The work must be carried out by a qualified specialist company that issues a certificate based on the official template. In addition, an invoice must be available showing the eligible measures, the labour costs, and the address of the property.
How much is the tax reduction for energy-efficient refurbishments?
Over a three-year period, a total of 20% of the expenses, capped at EUR 40,000 per property, can be deducted from income tax. In the first and second years, 7% each (max. EUR 14,000) is deductible, and in the third year 6% (max. EUR 12,000). Fees for energy consultants or energy efficiency experts are immediately deductible at 50% in the year of payment.
Which companies qualify as specialist firms for energy-related measures?
Specialist firms include skilled trade businesses from the sectors relevant to building renovation, such as bricklayers and concrete workers, plasterers, painters and varnishers, carpenters and joiners, roofers, plumbers, heating installers, electricians, metalworkers, stove and air heating installers, roller shutter and sun protection technicians, chimney sweeps, tilers, and specialised window fitters. The decisive factor is that the company operates in the field of the respective energy-related measure.
How do I claim the tax reduction for energy-efficient building renovations?
The relief is claimed through your income tax return by reporting the expenses for the energy-efficient measures to the Finanzamt (tax office). Required documents include a proper invoice from the specialist contractor and the official certificate from the contractor (Fachunternehmerbescheinigung). Payment must be made by non-cash means (e.g., bank transfer).