Building Energy Act (GEG 2026)

The Building Energy Act (GEG) is the central federal law governing the energy requirements of buildings in Germany. It consolidates the former Energy Saving Ordinance (EnEV), the Energy Saving Act (EnEG), and the Renewable Energy Heat Act (EEWärmeG). The amendment adopted in 2023 (GEG 2024) and the further developments as of 2026 significantly tighten the requirements for heating systems and renewable energy and have far-reaching implications for the purchase, sale, and renovation of real estate.

Key Requirements of the GEG for Existing Buildings

The GEG contains the following key provisions for existing buildings:

Heating Systems (Section 71 GEG): Starting January 1, 2024, newly installed heating systems must be powered by renewable energy sources for at least 65 percent of their operation. Existing oil and gas heating systems may continue to operate until they fail; after a heating system failure, the 65 percent renewable energy requirement must be met upon replacement. A transition period until 2026 or 2028 applies, depending on municipal heating plans.

Insulation Standards and Energy Efficiency: In the event of a change of ownership (§ 47 GEG), certain minimum energy efficiency standards must be met within two years (e.g., insulation of the top floor ceiling, if not already present). This so-called “obligation upon change of ownership” must be taken into account when purchasing a home.

Energy Performance Certificate: A valid energy performance certificate must be presented upon sale or rental. Failure to do so may result in a fine.

GEG and Real Estate Purchase: Obligations for Buyers

Anyone purchasing an existing building assumes the previous owner’s energy renovation obligations. The energy performance certificate must be provided in the purchase agreement; buyers should carefully review the energy efficiency class listed therein and any recommendations. Buildings in classes F, G, and H generally require significant renovation and may obligate the buyer to make investments.

The most common renovation obligations following a change of ownership pursuant to Section 47 of the GEG:

• Thermal insulation of the top floor ceiling: Required if the roof is not accessible and the attic is accessible. This measure is generally cost-effective to implement (approx. 3,000 to 8,000 euros) and pays for itself through savings on heating costs.
• Thermal insulation of heating pipes: Uninsulated or poorly insulated heating pipes in unheated rooms must be retrofitted with insulation.
• Replacement of constant-temperature boilers: Oil-fired boilers installed before 1991 with an efficiency rating below 75 percent must be replaced. Owner-occupied residential properties (where the owner lives in the home) are exempt from this requirement.

Municipal heat planning as a new factor

Under the Heat Planning Act (WPG), all municipalities must submit a heat plan starting in 2026 (large cities) or 2028 (smaller municipalities). These plans determine which areas will be supplied with district heating in the future, in which areas hydrogen networks are planned, and where owners will have to rely on their own decentralized heating solutions. Municipal heat planning thus has a direct impact on the economically sensible choice of heating systems-and thereby on the value of existing buildings.

Funding for GEG-Compliant Renovations

The Federal Funding for Efficient Buildings (BEG) program supports GEG-compliant renovations with grants and low-interest loans. The higher the efficiency house standard achieved (EH 55, EH 40), the higher the subsidy rate. The installation of heat pumps, biomass heating systems, and solar thermal systems is also eligible for funding through the BEG and the BAFA.

An overview of the main funding options:

• BAFA Funding (Heating System Funding): Base funding of 30 percent for heat pumps; plus a climate acceleration bonus (20 percent until 2028), an income bonus, and, if applicable, an efficiency bonus - up to 70 percent of eligible costs possible
• KfW loan for complete renovation: Low-interest loans for comprehensive renovations to the Efficiency House standard
• § 35c EStG: Tax incentive for energy-efficient renovation measures covering 20 percent of the costs over three years for owner-occupied residential property

Practical tip for homeowners in Nuremberg and Franconia

In the Nuremberg metropolitan region, many existing buildings from the 1950s to the 1980s are still equipped with old oil or gas heating systems. When purchasing such homes, buyers should factor in the costs of a GEG-compliant heating system upgrade (typically: 15,000 to 35,000 euros for a heat pump) when calculating the purchase price. During property viewings, we inform our clients about the energy efficiency status of the property and, if necessary, recommend an independent energy consultation.

The City of Nuremberg must submit a municipal heat plan by June 30, 2026. In certain Nuremberg neighborhoods-such as densely populated Wilhelminian-style districts-district heating from N-ERGIE is already available or planned. In these areas, a district heating connection may be the most economically sensible alternative to installing your own heat pump. We recommend checking the City of Nuremberg’s current district heating plan or contacting N-ERGIE directly to inquire about connection options before replacing your heating system.

Frequently Asked Questions

Do I have to replace the heating system immediately after purchasing an older home?

No, as long as the existing heating system is still functioning. The 65% renewable energy requirement only takes effect when a new heating system is installed. However, the obligation to comply with the GEG upon a change of ownership applies under Section 47 of the GEG: Within two years of the transfer of ownership, uninsulated heating pipes and the top floor ceiling must be insulated (if this has not already been done).

What happens if I do not comply with the GEG requirements?

Compliance with the GEG is monitored by the relevant authorities. Violations can be punished as administrative offenses. In the event of non-compliance with the ownership transfer obligations (Section 47 GEG), the building authority may order retrofitting.

Is a GEG-compliant renovation worth it before selling?

That depends on the individual case. An energy-efficient renovation before selling can increase the achievable sale price and shorten the time on the market because buyers have fewer renovation risks to factor in. We analyze for our sellers whether and which measures will yield the best return on investment.

What is an Individual Renovation Roadmap (iSFP) and why is it useful?

The iSFP is a subsidized plan for step-by-step building renovation created by a certified energy consultant. It identifies the most cost-effective sequence for implementing energy-efficiency measures and secures an additional 5% subsidy bonus for BAFA grant applications. Owners who plan to renovate over the long term benefit significantly from the structured planning and the higher subsidy.

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