Heating Law Overhaul: 65% Renewable Requirement Scrapped, Subsidy Rules Change July 21
Germany's controversial heating law (Heizungsgesetz) has been replaced by a new Building Modernization Law (GModG) effective July 10, 2026, scrapping the mandatory 65% renewable energy requirement and reshuffling heating subsidies starting July 21. The changes give homeowners and landlords wider technology choice but shift support toward lower-income households.
On July 10, 2026, the German government passed a major overhaul of heating and building energy rules, replacing the Gebäudeenergiegesetz (GEG), commonly called the Heizungsgesetz, with a new Gebäudemodernisierungsgesetz (GModG). This fundamentally shifts heating policy toward what the government calls "technology neutrality"—giving owners more freedom to choose heating systems, but also narrowing subsidies.
What Changed
The abolition of the heating law was confirmed by Bundestag and Bundesrat on July 10, 2026. The mandatory requirement for new heating systems to use at least 65% renewable energy has been scrapped. Consumers can now freely choose which heating system to install, replacing the Ampel coalition's renewable-energy mandate.
Subsidy changes effective July 21, 2026:
Eligible heating renovation costs are now capped at a maximum of €28,000, down from higher prior limits. Basic subsidies remain at 30%, but combined with additional bonuses can reach up to 80% depending on household income and type of renovation. A new "bio-stairs" (Bio-Treppe) mechanism requires an increasing share of CO₂-neutral fuels if choosing gas or oil heating.
For tenants: Landlords may charge a modernization surcharge (Modernisierungsumlage) of up to 10% of renovation costs if subsidized (8% without), capped at €0.50 per square meter per month.
Implications for Renters and Expat Homeowners
If you own a home or are a landlord planning a heating upgrade, the broader technology choice and capped costs may make renovation more accessible—but the lower subsidy ceiling (€28,000) and income-based bonuses mean you should file applications quickly and verify your eligibility before deadlines shift. If you rent and your landlord renovates the heating, expect a modest monthly rent increase (up to €0.50/m²) but document this surcharge carefully. Foreign residents and expats planning property purchases should factor in current heating replacement costs; the end of the renewable mandate may reduce long-term operating costs if choosing cheaper fossil systems, but energy prices and future climate regulations remain uncertain.
Sources
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