Funding for energy-efficient housing in Germany: How can expats benefit?

Germany is making it easier and more affordable than ever to invest in sustainable housing: starting in July 2021, the new “Federal Funding for Efficient Buildings” will make additional funds available for energy-efficient new-build housing and the modernisation of existing buildings. 

Government steps up funding for climate-friendly buildings

The German federal government is taking steps to meet its goal of becoming climate-neutral by 2050. One way they hope to achieve this is by providing extra funding for newly-built houses and apartment buildings that meet certain energy-efficiency standards. 

Buildings consume more than one-third of Germany’s total energy supply to heat, cool and provide hot water to residents. To reduce the amount of energy being wasted, the government is incentivising developers and homebuilders to (re)construct buildings in a way that will save energy. 

Federal funding for efficient buildings

The “Federal Funding for Efficient Buildings” (Bundesförderung für effiziente Gebäude - BEG) programme was launched in January 2021 and implemented as the Kreditförderung (KfW) “Energy-Efficient Construction and Refurbishment” programme.

It consists of three sub-programmes: one for residential buildings, one for non-residential buildings, and one for individual measures.  “Individual measures” means that the energy-efficiency standards are not created for the building as a whole, but rather smaller renovation projects that are designed to save energy - for example, replacing drafty doors and windows with better insulating ones. 

Anyone who owns property in Germany or who is looking to buy property in Germany can apply for the funding. German citizenship is not required. 

Funding for home modernisations

Homeowners looking to modernise their existing property are now able to apply directly through the KfW for the BEG funding scheme. The government will provide funding for the following types of interventions: 

• Replacing draughty doors or windows (up to 20 percent of the costs covered by government)
• Insulating building facade and roof (20 percent)
• Installation of digital heating systems (20 percent)
• Investment in renewable energy for heating systems (20 to 40 percent)
• Oil heating system replacements (50 percent) 

Funding for energy-efficient house purchases

Homebuyers purchasing newly-built properties can also benefit from the scheme. The German government will subsidise the purchase or construction of energy-efficient houses with low-interest loans and repayment subsidies. 

Currently, there are three energy-efficiency standards of buildings that are eligible for the subsidy: 

• The Efficiency House 55
• The Efficiency House 40
• The Efficiency House 40 Plus

The number indicates how energy efficient a building is compared to a reference building. The lower the figure, the higher the energy efficiency and the higher the funding available. For example, an Efficiency House 55 consumes only 55 percent of the energy of a reference building. 

You can receive a loan of up to 120.000 euros with a 15 percent repayment subsidy for an Efficiency House 55, or an 18.000-euro investment subsidy. For an Efficiency House 40 Plus, up to 150.000 euros with a 25 percent repayment subsidy is on offer, or a 37.500-euro investment subsidy. 

How to apply

The revised programme is now clearer and simpler to apply for than ever before. Homeowners can apply for funding for multiple measures through one single application and even view the status of their documents online.

If you are planning to build your own home - or planning significant renovation measures in your existing home -  it pays to consult an energy efficiency expert (Energie­effizienz-Expert), who can help you put together an application for funding. 

Alternatively, you can submit an application yourself via the website of the Federal Office for Economic and Export Control (search "BEG Förderung"). You need to do this before commencing work, in order to be eligible for funding.