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Energy-efficient renovation costs for inherited house
You’ve inherited a house – but instead of joy, you're worried about unpredictable renovation costs? This feeling is familiar to many heirs who suddenly face the legal obligations of the Building Energy Act (GEG). This guide shows you how to not only manage the financial burden but turn it into a value-enhancing investment.
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Heirs are obligated by the GEG to carry out energy-efficient renovations and have a deadline of two years, otherwise, fines of up to €50,000 may be imposed.
The costs for a complete renovation often range between €70,000 and €150,000, with the largest items being the roof, facade, windows, and heating.
State subsidies from KfW and BAFA can reduce the costs by up to 70% (when replacing the heating system).
Inheriting a property often comes with an unexpected challenge: the legal obligation to renovate. The Building Energy Act (GEG) requires new owners to bring older properties up to modern energy standards within two years, or face fines of up to €50,000. Many heirs fear skyrocketing expenses. However, with a clear strategy, the right prioritisation of measures, and full utilisation of government subsidies, the costs of energy-efficient renovation for an inherited house can be precisely managed. This article provides you with the necessary key figures and a roadmap to efficiently tackle the renovation and sustainably increase the value of your property.
If you inherit a property, you take on the legal obligations of the previous owner. The Building Energy Act (GEG) specifies precise retrofitting obligations for existing buildings when ownership changes. You, as the heir, have exactly two years to comply with these requirements. One of the core obligations concerns the insulation of the top floor ceiling or the roof, if these are uninsulated; here, a thermal transmittance (U-value) of a maximum of 0.24 W/(m²K) must be achieved. Additionally, oil and gas boilers over 30 years old, that operate at a constant temperature, must be replaced. Failure to meet these deadlines can result in hefty fines of up to €50,000. There are few exceptions, such as if you, as the heir, already lived in the house prior to 1 February 2002. A thorough inspection of the individual renovation needs is therefore the first unavoidable step. The legal requirements form the basis for the subsequent cost calculation.
The total costs of an energy-efficient renovation are comprised of several major components. A data-based estimate will help you set up a realistic budget. The four key measures account for the majority of the expenses.
Roof renovation and insulation: Here, you should expect costs between €150 and €280 per square metre, depending on the insulation material and the condition of the roof structure.
Facade insulation: External insulation with a thermal insulation composite system (ETICS) costs between €100 and €250 per square metre.
Window replacement: The installation of modern windows with triple glazing can cost between €800 and €1,400 per window.
Heating renewal: Switching to a heat pump is the largest single investment and including installation, often ranges between €25,000 and €40,000.
A typical single-family house with 140 m² of living space can quickly reach renovation costs of €70,000 to €150,000. A detailed renovation cost calculator can provide an initial guide. These figures highlight why utilizing subsidies is not a bonus, but a central part of financial planning.
You do not have to bear the high investment costs alone. The federal and state governments offer extensive financial support through the Federal Promotion for Efficient Buildings (BEG). The responsibilities are clearly divided: The Federal Office for Economic Affairs and Export Control (BAFA) funds individual measures on the building envelope, while the Credit Institute for Reconstruction (KfW) is responsible for heating system replacements. For insulation, window replacement, or ventilation systems, BAFA provides a subsidy of 15% of the eligible costs. For heating system replacements through KfW, the funding is even higher: A basic subsidy of 30% forms the basis. This can increase through various bonuses to up to 70% of the investment costs of a maximum of €30,000, which corresponds to a subsidy of up to €21,000. Additionally, KfW offers a supplementary loan of up to €120,000 per residential unit to secure the remaining financing. A professional funding check is essential to avoid missing out on funds. The right application strategy is crucial for success.
How can you ensure that the measures are optimally aligned and you receive the maximum funding? The answer is the individual renovation roadmap (iSFP). This document, created by a certified energy consultant, analyses the current state of your property and outlines a sensible, step-by-step renovation plan. The preparation of an iSFP costs around €1,300 for a single-family house but is subsidised by BAFA by up to 50%. However, the actual financial advantage lies elsewhere: if you implement a measure recommended in the iSFP (e.g., facade insulation), the BAFA subsidy increases by a bonus of 5 percentage points – from 15% to 20%. The iSFP often pays for itself with the first measure. It serves not only as a technical guide but also as a strategic tool to maximise your return. Unsure where to start? Our ImmoGPT chat can give you an initial data-driven assessment of the condition of your inherited property. An iSFP is the logical next step if you are wondering: What to do next?
The energy-efficient renovation is far more than a legal obligation – it is one of the safest investments in the future of your property. A comprehensive renovation can reduce heating and hot water energy costs by up to 80%. At the same time, a good energy-efficient condition significantly increases the market value of your property. Studies show that properties with good energy efficiency (class A or B) achieve price premiums of up to 20% compared to unrenovated properties. This increase in value often significantly exceeds the pure investment costs, especially after deducting subsidies. You transform a potential cost trap into a profitable and future-proof asset. Whether you use the property yourself, rent it out, or plan a sale – the investment pays off. A well-founded evaluation before and after the renovation quantifies this added value precisely. This way, you make your decision based on a solid, data-driven foundation.
The energy-efficient renovation of an inherited house is a financial and organizational challenge, but not an insurmountable hurdle. The key to success lies in a structured approach: Understand your legal obligations, realistically calculate the cost blocks, and consistently take advantage of government support programs. An individual renovation road map (iSFP) serves as your compass, guiding you not only on the right path but also securing additional financial benefits. This way, you minimize the burden and simultaneously maximize the value and future viability of your property. Act now, plan wisely, and turn your inheritance into a success story.
Statista provides statistics on the costs of energy-efficient renovations of rental apartments in Germany.
The Federal Statistical Office (Destatis) publishes a press release on construction and housing.
The DIW offers a weekly report on energy-efficient building renovations, declining investments, and the unreachability of climate targets without a change in trend.
IW Consult provides an expert report on renovation potential in residential properties.
The Federal Ministry of Finance provides information on inheritance and gift tax.
The KfW offers information on federal funding for efficient buildings (residential buildings) as a loan (261/262).
The Bavarian Consumer Centre releases a press statement on renovation obligations for heirs of old houses.
The dena provides information on the study 'Fit for 2045' Part 2.
What measures are mandatory for an inherited house?
According to the Buildings Energy Act (GEG), you must typically upgrade three things within two years: 1. Insulation of the top floor ceiling or the roof to achieve a U-value of 0.24 W/(m²K). 2. Replacement of boilers that are more than 30 years old and operate at a constant temperature. 3. Insulation of uninsulated heating and hot water pipes in unheated rooms.
Are there exemptions from the renovation requirement for heirs?
Yes, the main exemption applies to owners of single-family and two-family houses who have been living in the property themselves since before the cut-off date of 1 February 2002. Exceptions may also apply if the renovation costs are economically disproportionate or if there are preservation orders in place. However, this needs to be assessed on a case-by-case basis.
How can I finance the renovation costs?
Financing is typically done through a combination of personal capital, government grants (BAFA/KfW), and loans. In addition to grants, KfW offers a low-interest supplementary loan of up to 120,000 euros, specifically intended for the remaining financing of energy-saving renovations.
What is the iSFP bonus?
The iSFP bonus is an additional funding incentive. If you carry out a renovation measure on the building envelope (e.g., insulation) proposed in a previously created individual renovation roadmap (iSFP), the BAFA grant increases by 5 percentage points, from 15% to 20%.
Does an energy-efficient renovation really increase the value of the house?
Yes, significantly. A renovated house not only has much lower energy costs, making it more attractive to buyers and tenants, but also achieves a higher sale price. Properties with good energy efficiency classes (A/B) are worth up to 20% more on the market than unrenovated properties in classes G or H.
Where do I apply for the grants?
You submit applications to the respective institutions. The Kreditanstalt für Wiederaufbau (KfW) is your contact for boiler replacement. For all other individual measures such as insulation, windows, or energy consultancy itself, the Federal Office for Economic Affairs and Export Control (BAFA) is responsible. Important: The application must always be submitted before commissioning the craftsmen.
