The Building Energy ActWhat Owners, Buyers and Landlords Need to Know

Note: The federal government has announced that it will revise the GEG. Check the current position before making decisions, or seek advice from an energy consultant.

The 65% Rule

Newly installed heating systems are to run on at least 65% renewable energy. This requirement is met, for example, by heat pumps, connection to a heating network, biomass heating (pellets, wood chips), hybrid heating systems or gas heating systems that demonstrably run on a high proportion of biomethane or hydrogen.

For new buildings in new development areas, the obligation has applied since 2024.

For existing buildings, it is linked to municipal heat planning (kommunale Wärmeplanung): in large cities with more than 100,000 inhabitants it applies from mid-2026 at the latest, in all other municipalities from mid-2028 at the latest – or earlier if the municipality decides on a heating network or hydrogen area beforehand. Most municipalities in Upper Franconia fall into the second group.

What Applies to Existing Heating Systems

• Working heating systems may continue to run and be repaired.
• An obligation to replace only exists for certain oil and gas constant-temperature boilers that are more than 30 years old. Condensing and low-temperature boilers are exempt.
• If a heating system fails beyond repair (a "heating breakdown", Heizungshavarie), transition periods of generally five years apply, during which a used or fossil-fuel interim heating system may also be operated.
• Under current law, fossil-fuel heating systems must run entirely on renewable energy from 2045.

Obligations When Buying a House

Anyone who acquires a one- or two-family house in which the previous owner has not lived personally since 1 February 2002 must, within two years of the transfer of ownership:

1. insulate the top floor ceiling or the roof if the minimum thermal insulation is not met,
2. insulate uninsulated, accessible heating and hot water pipes in unheated rooms,
3. decommission old boilers that are subject to the replacement obligation.

In addition, when one- and two-family houses are sold, an informational consultation on the energy performance certificate is to be offered, provided one is available free of charge.

The Energy Performance Certificate

When selling or letting, a valid energy performance certificate (Energieausweis) must be presented at the latest at the viewing; its key figures belong in every advertisement. There are consumption-based and demand-based certificates. For buildings with fewer than five flats whose building application was submitted before November 1977 and which have not been modernised, a demand-based certificate is mandatory. More on this under Energy certificate & property documents.

What the GEG Means for Property Prices

Buyers today pay close attention to the energy efficiency class and the type of heating. Houses with old oil or gas heating and poor insulation trade at a discount, while energy-efficiently renovated properties command a premium. For sellers, this means: a renovation roadmap (Sanierungsfahrplan) with realistic costs and funding options removes buyers' uncertainty – and protects against excessive price reductions.

Funding

For replacing a heating system, funding is available through the KfW with a basic subsidy and bonuses, among others for lower-income households and for the early replacement of fossil-fuel heating. Measures on the building envelope are funded by BAFA. Our guide Energy-efficient renovation provides an overview.

Heating Options Compared

Which heating system is suitable depends on the building. A rough guide for a detached house:

In many cases, substantial grants are deducted from these figures – see Funding programmes for property.

Heat Pumps in Older Buildings: Does It Work?

Yes, more often than many people think. The decisive factor is the flow temperature the house needs on cold days. If it is below 55 °C, a heat pump usually works economically. A simple test: on a cold day, turn the flow temperature of the existing heating down to 50 to 55 °C. If all rooms get warm, the house is suitable for a heat pump. If not, a few larger radiators or insulating the top floor ceiling often help.

In the cold winters of the Fichtelgebirge and the Frankenwald, careful system design is particularly important. A heat load calculation by a specialist company is a prerequisite for funding – and protects against a system that is too large or too small.

Gas Heating: the Stages from 2029

Anyone who still installs a new gas or oil heating system in an existing building before the heat planning deadline must obtain advice beforehand. Under current law, the share of renewable fuels then rises step by step:

Renewable fuels are more expensive than fossil gas or oil, and the CO₂ price is rising at the same time. Anyone installing a fossil-fuel heating system today should calculate the operating costs over 20 years – not just the purchase price.

Municipal Heat Planning in Upper Franconia

No town in Upper Franconia has more than 100,000 inhabitants. This means the longer deadline of mid-2028 applies to all municipalities – unless a municipality decides on a heating network or hydrogen expansion area earlier. Many towns, such as Bayreuth, Bamberg, Hof and Coburg, are already working on their heat planning; some municipal utilities (Stadtwerke) already operate district heating networks in parts of their town centres.

For buyers and owners, this means: ask the municipality or the municipal utility whether a heating network is planned for your street. A foreseeable district heating connection can make an expensive individual heating system unnecessary and increase the value of a property.

Wood Stoves and Wood Heating

In rural Upper Franconia, many households also heat with wood. Wood stoves are subject to the limit values of the Federal Immission Control Ordinance (Bundes-Immissionsschutzverordnung): older stoves that do not comply with the limits for fine dust and carbon monoxide had to be retrofitted or decommissioned by the end of 2024 at the latest, depending on their year of manufacture. The chimney sweep checks this during the fireplace inspection (Feuerstättenschau). A wood stove alone does not usually meet the 65% rule, but it remains possible as a supplement to a main heating system.

What Sellers and Buyers Should Do Now

Sellers:

1. Keep the energy certificate up to date and have heating data (year of manufacture, type, maintenance) ready.
2. For older houses, have a renovation roadmap prepared – it replaces uncertainty with figures.
3. No rushed heating renovation shortly before the sale; the buyer often wants to decide for themselves.

Buyers:

1. Check the age and type of the heating system and clarify replacement obligations.
2. Factor retrofitting obligations within two years into the financing.
3. Submit funding applications before work begins.

More on checking older houses under Buying an older property and on valuation under Determining property value.

What Applies to Flats?

Special rules apply in owner-occupied apartment buildings, because there is often a shared central heating system or each flat has its own individual floor heating unit (Etagenheizung):

• Central heating: The owners' association decides on replacement and the type of heating. The property manager must collect certain data on the heating system and make it available to the owners.
• Individual floor heating units: If a heating unit fails in a building with gas floor heating units, longer deadlines apply so that the owners' association can decide whether to switch to a central solution.
• Costs: The costs of a shared heating system are allocated according to the association's distribution key, often via the maintenance reserve or a special levy.

Buyers of a flat should therefore check the minutes to see whether the heating question has already been discussed. → Flats, owners' associations and service charges

The Cost of a Heating System over 20 Years

A heating system should not be judged by its purchase price alone. A simplified comparison for a detached house with a heat demand of 20,000 kWh per year, without funding:

The figures depend heavily on energy prices, the efficiency of the house and funding, and serve only as a guide. But they show that the cheapest purchase is not automatically the cheapest heating system. Advice from an energy consultant provides clarity.

The GEG in the Purchase Contract

When an older house is bought, the GEG is increasingly taken into account in the purchase contract: sellers declare which heating system is installed and whether it is subject to replacement; buyers have it confirmed which documents on the system are available. After the change of ownership, the retrofitting obligations lie with the buyer. Clear information protects both sides from later disputes. More on preparing the contract under Notary appointment.