01 Sep 2023, 12:12
Carolina Kyllmann

New housing in Germany to receive tax credits without requirement for tighter efficiency standards

Clean Energy Wire

New homes constructed in Germany will be eligible for tax credits without the need for tighter efficiency standards. “This is our offer to the construction and real estate industry to get housing construction in Germany moving again,” said Social Democrat (SPD) construction minister Klara Geywitz. New building projects will be able to claim six percent of their investment costs against tax in the first year, the construction ministry (BMWSB) said.The credits would apply to projects that begin construction from 1 October 2023 to 30 September 2029.

The tax credits will be applicable from an efficiency standard of EH55, which means the energy consumption of new homes has to be limited to 55 percent compared to a model building. An efficiency standard of EH55 has applied to new construction since the start of 2023, and was set to be tightened to EH40 from 2025, limiting energy consumption to 40 percent (for example requiring homes to be better insulated). However, Geywitz has repeatedly rejected this, saying the whole life-cycle assessment of a building – including the CO2 cost of the building materials for example – should be considered instead.

Germany is suffering from a housing shortage, a situation made worse by high efficiency standards which result in increased costs, construction associations have complained. Tax credits for residential buildings are a cornerstone of Germany’s “Growth Opportunities Act”, unveiled on 30 August. With it, the German government coalition hopes to strengthen the country’s economy and stimulate climate and energy efficiency investments. A package with further measures to boost the construction and real estate sector will be discussed by the end of September. There already are billions of euros in support for climate-friendly new construction available, the BMWSB said.

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