For Owners

End of subsidies for certain gas heating systems in the new year 2023

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February 2023

The end for a highly sought-after subsidy: The bonus for the installation of gas heating systems for owner-occupied housing has been abolished as of January 1, 2023. Specifically, this affects Section 35c of the German Income Tax Act (EStG). The way for this was cleared by the Bundesrat on December 16, 2022, when it approved the Second Ordinance Amending the Energetic Renovation Measures Ordinance (ESanMV).

Tax reduction for energy renovation

Section 35c of the German Income Tax Act (EStG) provides tax incentives for energy-related renovation measures on buildings that owners occupy themselves. Certain individual measures are subsidized, provided they are classified as eligible. The subsidization of gas-fired heat pumps, gas condensing technology and gas hybrid heating systems was removed from this list at the start of the new year.

Regulation emerged from climate protection program

In its original form, the ESanMV came into force on January 1, 2020. It was derived from the former German government's Climate Protection Program 2030. The ordinance was amended for the first time on March 26, 2021, when the subsidies for certain measures were adjusted. The basis for the ordinance was the Building Energy Act (GEG), as adopted in November 2020.

Conditions for the promotion

According to Section 35c EStG, a tax reduction is only possible if a house or apartment is occupied by the owner himself. In this case, measures for energy-efficient refurbishment can be subsidized. But another condition applies: the measures must have been started after December 31, 2019, and completed by January 1, 2030.

Obligations for gas heating users since October 2022

Since October 2022, the German government has imposed additional obligations on anyone who relies on gas heating for heating their own home. The aim is to save energy and conserve Germany's scarce gas resources. Part of the ordinance to secure the energy supply through measures effective in the medium term (EnSimiMaV) is, among other things, that buildings with gas heating are subject to mandatory annual heating inspections. If the heating pumps in buildings with natural gas heating prove to be particularly inefficient, they must be replaced.

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