Home energy renovation tax relief

• You must use the home yourself and be its legal or qualifying economic owner. For example, a buyer can qualify as economic owner once the property’s benefits and obligations have passed to them, even before their land-register entry. A tenant or ordinary holder of a right to occupy does not qualify as an owner. The home can be anywhere in the EU, Norway, Iceland or Liechtenstein. Owner-used holiday homes also qualify. A home provided free to a child qualifies when you are entitled to child benefit or the statutory child allowance; giving the whole home free to other relatives or third parties does not.
• The home must be more than ten years old when the measure starts. Count from the original building-permit application, or submission of building documents for work exempt from a permit. The measure starts with its permit application or required building-document submission; otherwise it starts when construction begins on site. Planning, advice and signing a supply contract do not start this clock.
• Ownership and qualifying residential use must exist in each year claimed. You can still claim in the year you stop living there, rent it out or sell, but subsequent instalments end. Renovating an empty purchased home immediately before moving in can qualify.
• For mixed residential, business or rental use, claim only the costs attributable to your own residential part; the overall cap is not reduced. A temporary rental of part can avoid apportionment where annual receipts do not exceed €520 and the tax office agrees to disregard the rental income. If you freely let someone live in part of a home you otherwise occupy, you need not exclude that part’s renovation costs. This also applies to a right to live there that you grant or leave by will. A retained occupancy right is different: for example, a former owner transfers the home to you but keeps the right to live in part of it. Exclude renovation costs attributable to that part; the €40,000 overall cap stays unchanged.
• A qualifying specialist business must perform the work; your own DIY work is excluded. An energy adviser is optional. The 50% adviser rate requires a BAFA-approved residential-energy adviser or someone on the federal energy-efficiency expert list who plans or supervises actual renovation; permission to issue energy certificates alone is insufficient.
• Co-owners usually share costs and the €40,000 cap by ownership share; jointly assessed spouses or civil partners need no such apportionment. Separate homes in a jointly owned building can each have a cap when each owner occupies a separate dwelling, its value does not exceed their ownership share and they do not form a joint household. Condominium owners can claim their own dwelling’s costs and their share of common-property work.
• Costs already deducted as business expenses, employment-related expenses, special expenses or exceptional personal expenses (extraordinary burdens) cannot also receive this relief. If some costs were not deducted as extraordinary burdens because the tax rules require you to bear part yourself, or because care allowance or daily care payments were offset, that undeducted portion can qualify for this renovation relief.
• Wohn-Riester lets you use state-supported Riester retirement savings for your home, including eligible energy renovation. If you use it for a renovation, only renovation costs beyond those covered by Wohn-Riester can receive this tax relief.
• For the same measure, choose this relief or section 10f historic-building relief, section 35a household/tradesperson relief, or public support through subsidised interest or tax-free grants, including BAFA and KfW. The exclusion covers the whole measure and associated work, even costs above the other scheme’s cap, and the choice applies throughout the relief period. A grant solely for energy advice excludes the advice costs but allows otherwise unfunded renovation relief. Receiving Baukindergeld, the federal grant for families with children acquiring their first owner-occupied home, does not prevent this relief. Unsubsidised adviser costs can qualify where at least one actual renovation is supported under tax or other public programmes.
• A gift recipient cannot continue the donor’s remaining relief. An inheriting owner may continue it when they use the home themselves.
• For older claims, a “Renewable Ready” gas-condensing system begun before 1 January 2023 remains eligible only if renewable-energy integration was completed within two years of commissioning, evidenced under the former ESanMV rules.

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• Measures must begin after 31 December 2019 and be fully completed and paid before 1 January 2030.[^c21]

Arrange work that meets the ESanMV requirements and obtain the prescribed certificate from the specialist business or a person authorised to issue building energy certificates under section 88 GEG. Submit its copy and any supporting annexes with Anlage Energetische Maßnahmen in your German income-tax return to your responsible Finanzamt, including through Mein ELSTER.

Obtain a German-language invoice, or a sworn translation, identifying the work, contractor’s labour and home address. Keep the invoice and payment evidence for the tax office. Pay the full final amount into the service provider’s account: cash, cash deposits and cash part-payments do not qualify. Card, direct debit, credit card and online payment can qualify with account-payment proof, including payment from a third person’s account; translation costs are excluded.

The measure must have begun after 31 December 2019 and be completed before 1 January 2030. Completion means the work is fully performed, you have the final invoice and the full amount has reached the service provider’s account; agreeing instalments or paying a deposit is insufficient. Minor finishing work that does not prevent emission reductions can remain. Claim first for that completion year, then the next two years. You can request relief until the tax assessment becomes final, or while it can still legally be amended.

Co-owners may need a separate declaration allocating the relief at the tax office where the property is located. This is unnecessary where the costs are easy to establish and the owners’ allocation is fixed; include the ownership-share details in the income-tax form instead.