Building Energy Act (GEG)

Building Energy Act (GEG) - The Building Energy Act is the central set of regulations governing energy efficiency requirements for buildings in Germany. It came into effect on November 1, 2020, and consolidates the previous Energy Saving Ordinance (EnEV), the Energy Saving Act (EnEG), and the Renewable Energies Heat Act (EEWärmeG).

Key Provisions

The GEG sets requirements for primary energy demand, transmission heat loss, and the use of renewable energy. For new buildings, the requirement to cover at least 65 percent of heating energy from renewable sources has been in effect since January 1, 2024. In existing areas, the requirement depends on municipal heat planning: Large cities by June 30, 2026; smaller municipalities by June 30, 2028.

For existing buildings, minimum requirements apply if more than 10 percent of a building’s surface area is renovated: exterior walls max. 0.24 W/m²K, roof 0.24 W/m²K, windows 1.3 W/m²K.

Heating System Replacement and the 65-Percent Rule

New heating systems must use at least 65 percent renewable energy. This can be achieved through heat pumps, district heating, biomass, hybrid heating systems, or solar thermal energy. Existing, functioning heating systems may continue to be operated. In the case of an irreparable defect, transition periods of up to five years apply.

In practice, this means: An old gas heating system that still works does not have to be replaced immediately. However, anyone who knows that the heating system will reach the end of its service life in the foreseeable future should plan the replacement early-lead times for planning, subsidy applications, and installation by a contractor currently often range from six to twelve months.

Obligations upon Change of Ownership under § 47 GEG

Anyone purchasing an existing property assumes not only the building but also the previous owner’s energy-efficiency renovation obligations. § 47 GEG stipulates that certain minimum measures must be implemented within two years of the transfer of ownership:

• Insulation of the top floor ceiling (if accessible and not already insulated)
• Thermal insulation of heating and hot water pipes in unheated rooms
• Replacement of constant-temperature boilers installed before 1991 (exception: owner-occupiers)

These obligations must be taken into account when purchasing real estate and should be factored into the purchase price calculation.

Energy Performance Certificate

When selling, renting, or leasing a property, a valid energy performance certificate must be presented-either as an energy demand certificate or an energy consumption certificate. For residential buildings with fewer than five units and for which a building permit was applied for before November 1977, the energy demand certificate is mandatory.

The energy performance certificate indicates the energy efficiency class (A+ to H). Buildings in the lower classes F, G, and H often require significant renovation - and, in the current market environment, are sold at a growing price discount compared to well-renovated buildings. As a rule of thumb: The lower the energy efficiency class, the greater the expected investment required by the buyer, and the more important it is to obtain a realistic cost estimate before purchasing.

Overview of Subsidy Programs

Those who renovate in compliance with the GEG (German Energy Efficiency Act) benefit from substantial subsidy programs:

• BAFA Heating Subsidy: Up to 70 percent of eligible costs for the installation of a heat pump (base subsidy 30%, climate speed bonus 20%, efficiency and income bonus)
• KfW Loan 261: Low-interest loans for comprehensive renovations to the Efficiency House standard
• § 35c EStG: 20 percent of renovation costs can be deducted from income tax over three years (for owner-occupied residential property)
• iSFP Bonus: Those who follow an individual renovation roadmap receive an additional 5% bonus on many BAFA measures

Practical Tip for Homeowners in Nuremberg

The city of Nuremberg must submit a heating plan by June 30, 2026. We nevertheless recommend planning early: delivery times for heat pumps are long, and subsidies (up to 70% of costs via BEG) make the switch economically attractive. An individual renovation roadmap (iSFP) secures a 5% additional bonus.

When purchasing existing properties in Nuremberg and the surrounding Franconian region, we regularly review the energy performance certificate and inform our clients about specific renovation requirements and opportunities. For sellers, we analyze whether targeted energy upgrades before the sale can increase the purchase price-in many cases, simple measures such as insulating the floor slab or optimizing the heating system are worthwhile, as they improve the energy efficiency class and make the property more attractive to a broader range of buyers.

Frequently Asked Questions

Do I have to replace my gas heating system immediately?

No, functioning gas heating systems may continue to be used. The 65% requirement only applies when a new heating system is installed. Transition periods apply in cases of irreparable defects. However, it is advisable to plan the heating system replacement well in advance-both for subsidy purposes and due to the long lead times for contractors and heating manufacturers.

What subsidies are available?

The BEG through BAFA (individual measures, up to 70% for heating system replacement) and KfW (complete renovation). Alternatively, tax incentives under § 35c EStG (20% over three years). An iSFP provides a 5% additional bonus. Subsidies must generally be applied for before the contract is awarded-retroactive subsidies are not possible.

Does the GEG apply to historic buildings?

For listed buildings, exemptions may be granted if GEG requirements unduly impair the building’s structure. Alternative measures such as interior insulation may be considered. In Nuremberg, there are a number of listed buildings for which individual energy concepts must be developed in close coordination with the State Office for the Preservation of Historical Monuments.

How does the energy performance certificate affect the purchase price?

Buildings with poor energy efficiency (Class F, G, or H) are sold on the market at increasingly lower prices, as buyers factor in renovation costs. Improving the energy efficiency class through targeted measures can increase the sales proceeds and shorten the time to market-we provide our sellers with specific advice on which measures offer the best cost-benefit ratio.

Which renovation measures improve GEG compliance with the best cost-benefit ratio?

Not all renovation measures are equally effective. Experience with existing properties in the Nuremberg metropolitan region shows: Insulating the top floor ceiling is one of the most cost-effective measures with an immediate impact on the energy balance-typically costing 30 to 60 euros per square meter and taking just a few days to complete. Insulating the basement ceiling is also cost-effective and significantly reduces heat loss downward. Both measures improve the energy efficiency class and are tax-deductible under Section 35c of the German Income Tax Act (EStG). More expensive measures such as facade insulation or window replacement offer the best long-term results but require significantly higher investments of 150 to 350 euros per square meter of building surface area. A heat pump as a heating replacement is particularly efficient in well-insulated buildings-in poorly insulated older buildings, however, it cannot fully demonstrate its advantage over a modern gas heating system. An Individual Renovation Roadmap (iSFP), prepared by a certified energy consultant, not only qualifies for the 5% additional bonus on BAFA subsidies but also identifies the optimal sequence of measures for the specific property.

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