Do you own or inherit an old building and wonder which renovations are truly worthwhile? Many measures are not only legally required but also significantly increase the value of your property. Discover how strategic planning allows you to avoid cost traps and unlock the full potential of your asset.
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The topic briefly and concisely
Renovating an old building costs between €400 and €1,200 per square metre, depending on the extent of the measures.
The Building Energy Act (GEG) requires new owners to carry out energy renovations within two years, otherwise they face fines of up to €50,000.
Government subsidies (KfW/BAFA) can reduce renovation costs by up to 45% through loans and grants.
Are you faced with the decision to renovate an old building? The complexity and potential costs can seem daunting. However, renovation is often not only a necessity but also one of the greatest opportunities to increase value. An energy-efficient modernisation can boost the property value by up to 20%. The Building Energy Act (GEG) also sets out clear renovation obligations in the event of a change of ownership, non-compliance with which can result in fines of up to €50,000. This article guides you through the crucial steps of renovating an old building. It shows you how to accurately calculate costs, comply with legal requirements, and maximise your property's market value through targeted investments. With a data-driven strategy, you can transform an old building into a future-proof and profitable asset.
Cost Analysis: What Renovating an Old Building Really Costs
Every successful renovation begins with a transparent cost breakdown. The expenses for an old building renovation vary greatly depending on the condition and scope of the measures. For a complete modernization, you should expect costs ranging from 400 to 1,200 € per square meter. For a property of 120 m², this equals an investment of 48,000 to 144,000 €. A core renovation, which includes renewing piping and electrics, can amount to 600 to 1,000 € per square meter. A precise, data-driven assessment beforehand is therefore essential to plan the budget realistically. Our cost-benefit analysis helps you identify the most profitable measures. A thorough analysis protects you from unexpected expenses and lays the foundation for a lucrative investment.
Legal Obligations: Understanding the Building Energy Act (GEG)
Since 2020, the Building Energy Act (GEG) has governed the energy requirements for buildings and prescribes specific renovation obligations when changing ownership. New owners have exactly two years from the entry in the land register to comply with the requirements. If these deadlines are missed, hefty fines of up to €50,000 may be imposed. The three central obligations are:
Insulation of the top floor ceiling: The thermal transmittance (U-value) must not exceed 0.24 W/(m²K).
Replacement of old boilers: Oil and gas heating systems that are over 30 years old must be replaced.
Insulation of heating and water pipes: All heat-carrying pipes in unheated rooms must be insulated.
These measures are not only mandatory but also the first step towards an energy-efficient property. Meeting these standards forms the basis for any further increase in value and directly impacts ongoing operating costs.
Value Driver Energetic Renovation: More Than Just Insulation
An energy-efficient renovation demonstrably increases the value of your property. A study shows that the price difference between a property with energy efficiency class B and those with classes G/H has increased up to 15.5 percentage points. The investments often pay off after just 5 to 10 years purely through the saved energy costs. Among the most effective measures is the replacement of old windows, which can reduce heating costs by up to 20%. Modern facade insulation can even reduce energy loss by up to 25%. A sustainable renovation of old buildings also takes ecological materials into account. These investments not only convince buyers with lower ancillary costs but also secure the long-term value of your property in an increasingly environmentally conscious market.
Strategic measures for maximum sales revenue
Not every renovation leads to the same increase in value. It is crucial to prioritise those measures that most convince potential buyers. A bathroom renovation can increase the value by 10-15%, as modern and functional bathrooms are a key criterion. Renewing the electrics and plumbing is also an investment that pays off, as it ensures the safety and future viability of the house. A complete renovation, covering these elements, may cost around €800 per square metre, but it creates a foundation comparable to a new build. Before investing, you should analyse which renovations are truly worthwhile. A data-driven decision, for example through our ImmoGPT chat, helps you place your capital where it promises the highest returns.
Special Case Heritage Conservation: Regulations and Opportunities
The renovation of a listed old building poses special challenges, but also offers unique advantages. In Germany, about 5% of all residential buildings are listed. Any structural alteration, from the façade to the windows, requires approval from the monument protection authority. The good news: The GEG here applies only in a limited way, and there are special tax write-offs (Denkmal-AfA), allowing you to claim renovation costs over several years. Working with specialised architects and craftsmen is not a luxury here, but a necessity to properly preserve historic building fabric. Familiarising oneself with the issues surrounding listed buildings is the first step towards a successful project. The right approach turns strict requirements into a value-enhancing preservation of historic building fabric.
Make the most of funding: KfW and BAFA
The government supports the renovation of old buildings with substantial funding, which you should definitely take advantage of. The Federal Funding for Efficient Buildings (BEG) consolidates the programs of KfW and BAFA. The KfW Bank offers loans up to €150,000 through Program 261 for renovating to efficiency house standards, including a repayment bonus of up to 45%, which can correspond to €67,500. For individual measures such as window replacements or insulation, BAFA provides grants of up to 15% on a maximum investment sum of €30,000. An overview of the options:
KfW Credit 261: For complete renovations to efficiency house standards.
BAFA Grant: For individual energy efficiency measures.
Tax Deduction: Alternatively, 20% of the costs (max. €40,000) can be deducted from taxes over three years.
A professional energy consultation is often a prerequisite for applying and is also subsidised by up to 50%. The right combination of funding options can reduce the financial burden of a renovation by more than a third.
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Renovating an old building is a complex but rewarding task. The costs, ranging from €400 to €1,200 per square metre, are a significant investment. Legal obligations under the GEG compel owners to act, while government subsidies can reduce the financial burden by up to 45%. The key to success lies in strategic, data-driven planning. Instead of relying on gut feelings, you should assess every measure for its contribution to increasing value. An impartial evaluation from Auctoa provides you with the necessary clarity to make informed decisions. This transforms an old building into a secure and profitable investment in your future.
Additional useful links
The Statistische Bundesamt offers comprehensive information on construction prices and the property price index.
Detailed tables on house prices and building land can be found at the Statistische Bundesamt.
ZDFheute examines the fluctuations in property prices in connection with energy efficiency.
The IGES Institut provides a brief report on the costs and benefits of energy efficiency measures.
The KfW provides information on the promotion of energy-efficient refurbishment of existing properties for private individuals.
The KfW offers an overview of the funding products for energy-efficient refurbishment of existing properties.
Specific measures to increase energy efficiency in existing properties can be found on the KfW website.
Finanztip offers a detailed guide to KfW funding for energy-efficient refurbishment.
FAQ
How long do I have to complete the mandatory renovation after buying a house?
After registering in the land registry, as the new owner, you have two years to implement the renovations required by the Building Energy Act (GEG).
Is renovation worthwhile even if I'm not planning to sell?
Yes, absolutely. An energy-efficient renovation significantly reduces your monthly energy costs – often the costs pay for themselves after 5 to 10 years. In addition, you enhance the living comfort and long-term value of your property.
Can I combine funding from KfW and BAFA?
The programmes are coordinated with each other. Typically, you would either apply for a KfW loan for a comprehensive renovation to an energy-efficient house or BAFA grants for individual measures. Combining funding for the same measure is not allowed, but different measures can be supported by different programmes. An energy consultation is recommended here.
What is the difference between renovation and core renovation?
A renovation fixes defects and modernises parts of the building, such as the bathroom and windows. An extensive renovation is more comprehensive and restores the structure to a like-new condition. It typically includes the renewal of the roof covering, the façade, and all electrical and water pipes.
What should I particularly consider with a listed historic building?
For listed buildings, all renovation measures must be approved by the monument protection authority to preserve the historical fabric. In return, you benefit from special tax advantages (monument depreciation) and often adjusted energy requirements.
How can Auctoa assist me in making my renovation decision?
Auctoa offers fast, data-driven, and neutral property valuations. We analyse the current market value of your property and help you understand which renovation measures promise the highest increase in value. This way, you can make financial decisions based on facts, not just a gut feeling.
