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19 Dec 2019, 13:12
Freja Eriksen

Germany grants homeowners tax incentives for energy efficient renovations

Tagesspiegel Background

Following years of failed attempts, Germany will from January 2020 provide homeowners with tax incentives for energy efficient renovations, allowing them to deduct 20 percent of the costs for renovations of up to 40,000 euros from their taxes, reports Tagesspiegel Background. Insulation measures, new windows and exterior doors, the replacement or optimisation of old heating and ventilation systems and the installation of digital energy management systems are eligible for support. Industry representatives welcomed the tax incentives as "very good news" and a "giant leap" for climate action in the buildings sector but bemoaned that the measures would only cover owner-occupied homes. This rules out rented dwellings and means that less than half of Germany's approximately 42 million homes are eligible for support. A study by the German alliance for energy efficiency in buildings, geea, projects that the approved measures could save up to 3.4 million tonnes of CO2 equivalents by 2030.
The agreement, which was reached by a mediation committee, is expected to be approved by the council of federal states, or Bundesrat, this week. It also stipulates that federal states will receive 1.5 billion euros in compensation for their losses in tax revenues.

Buildings are responsible for about 14 percent of Germany's total emissions and almost a third when including indirect emissions. Development in the sector has stagnated for about a decade. By 2030, the government aims to reduce emissions from 117 million tonnes in 2018 to between 70 and 72 million tonnes – the most ambitious of the country's sector targets.

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