Legislation and deadlines in 2024 for property owners: an overview of the changes

CO2 prices will increase in 2024, while the energy price brake will no longer apply and the new Building Energy Act will come into force. These developments have far-reaching implications for both property owners and tenants.

Despite the intense discussions about the federal budget, many property owners may have missed the fact that they will be facing significant changes in the coming year. From January 1, the much-discussed Building Energy Act (GEG) will come into force in a revised form. Among other things, this law includes new regulations for heating systems. The main changes at a glance:

Increase in the CO2 price

From January 1, 2024, property owners who heat their buildings with gas or oil will have to dig deeper into their pockets. The CO2 price will rise by 15 euros to a total of 45 euros per tonne of CO2 emitted. This corresponds to an increase of five euros compared to the original plans of the traffic light government. During the budget debate, the coalition decided to adjust the price upwards.

Since the beginning of 2023, landlords and tenants have been sharing the CO2 levy. These regulations must be taken into account for the first time when preparing the operating cost statement for the previous year. The landlord's share depends on the efficiency level of the building and can be calculated using the online calculator of the Federal Ministry of Economics. Landlords of very poorly insulated buildings could possibly have to bear up to 95 percent of the CO2 costs.

The energy price brake will be lifted

From March 1, the VAT on gas will be reset to its original rate of 19 percent. At the same time, the state price brakes for gas, district heating and electricity will end on December 31, 2023. The discontinuation of this state support could lead to rising ancillary costs in various areas. Nevertheless, billing will at least be easier for landlords in 2024.

Property owners must include the government relief for gas and district heating in their utility bills until the end of 2023 and are obliged to pass this on to their tenants. The same applies to the December discount from 2022, which the federal government has taken over in full for gas and district heating customers. Landlords must also pass this relief on to their tenants if the supply of gas or district heating is part of the tenancy agreement.

Building Energy Act: subsidies and speed bonus from 2024

From January 1, the installation of heating systems that use at least 65% renewable energy will be mandatory. This regulation applies directly to new-build areas. Outside of new development areas, there is still time until the municipal heating plan is in place. Compliance with the GEG requirement will be mandatory from mid-2026 at the latest in large cities and from mid-2028 in cities with fewer than 100,000 inhabitants.

Important to note: Existing heating systems are not affected by the current regulations. Even in the event of a defect that can be repaired, there is no requirement to replace the heating system, explains Martin Brandis, energy expert at the energy advice service of the consumer advice center. He advises: 'In the event that a heating system is nearing the end of its service life, it is advisable to find out about alternative options at an early stage.'

A climate speed bonus is provided as part of the federal funding for heating replacement: Anyone replacing an old fossil fuel heating system in their own home before the statutory deadline can receive a subsidy of 20 percent of the investment costs. However, no funding applications are currently being accepted or approved. According to the Federal Ministry for Economic Affairs and Climate Protection, the program has been paused while the effects of the Federal Constitutional Court's ruling of 15 November 2023 are examined. However, energy expert Brandis expects the program to resume at the end of February.

In theory, it is possible to install a new gas or oil heating system between the beginning of 2024 and the date on which the municipal heat planning comes into force. However, interested parties must be advised as part of the GEG amendment. 'Gas heating systems that are newly installed from 2024 must also be powered by at least 15 percent renewable energy from 2029. The feasibility of this requirement is uncertain,' emphasizes Brandis. 'In addition, the emission costs for gas and oil are rising. In most cases, it will make more sense to choose an alternative type of heating.'

Homeowners have the opportunity to simulate the effects, costs and funding options of a heating system replacement or other refurbishment measures using the Federal Ministry of Economics' refurbishment configurator.

Degressive depreciation 2024: Planned tax benefits for residential construction

The envisaged Growth Opportunities Act plans the temporary reintroduction of declining balance depreciation for wear and tear (AfA) until 2030. From October 1, 2023, all residential construction projects should be able to benefit from this. This regulation makes it possible to claim six percent of the investment costs for tax purposes in the first year and six percent of the residual value in subsequent years. The prerequisite for this is that the apartments and residential buildings are newly built or purchased and meet the 55 efficiency standard. However, it should be noted that the final adoption of the law is still pending.

Source: Capital Online 26.12.2023

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What 2024 will bring for property owners: an overview of the changes