Heating replacement subsidy: application now possible for private owners of multi-occupancy buildings and for condominium associations

KfW is expanding its heating replacement subsidy to other applicant groups as planned. As of now, the promotion for the installation of climate-friendly heating is also available to owners of multi-occupancy buildings and condominium associations for measures on communal areas of the property. The German Federal Government provides budget funds for investments associated with heating replacement; these funds are available as grants directly from KfW. In the case of complete documents and eligible projects, the commitment is made digitally and automatically in just a few minutes. In addition to the subsidy, KfW offers low-interest supplementary loans that customers can apply for through their regular bank. The aim of the promotion is to accelerate the transition to climate-friendly heating, thereby reducing greenhouse gas emissions from the heat supply in the building sector.

Subsidy

The KfW subsidy consists of a basic subsidy (grant) and several possible bonuses for condominium associations and owners of multi-occupancy buildings.

The basic subsidy amounts to 30% of the total eligible costs. The maximum amount of the total eligible costs for the present building may be taken into account. The maximum amount of the total eligible costs depends on the number of housing units in the respective multi-occupancy building and can be calculated according to the following model:

• EUR 30,000 for the first housing unit,
• EUR 15,000 each for the second to sixth housing unit,
• EUR 8,000 for each additional housing unit.

For example, the maximum total eligible cost for a condominium association or privately owned multi-occupancy building with eight apartments is EUR 121,000 (1 x EUR 30,000 plus 5 x EUR 15,000 plus 2 x EUR 8,000). If this amount of eligible costs is actually incurred and an application for a basic grant of 30% is submitted, the grant amount is EUR 33,000.

In addition, the following subsidy components are possible:

• 5% efficiency bonus for efficient electric heat pumps when water, soil or waste water is tapped as a heat source or a natural refrigerant is used,
• a climate speed bonus of (initially) 20% for private owner-occupiers for the replacement of operational oil, coal, single-story gas, and night storage heaters or of operational gas or biomass heaters if they were commissioned at least 20 years ago at the time of application,
• as well as an income bonus of 30% for owners occupying the buildings themselves whose taxable annual household income does not exceed EUR 40,000
• in addition, an emission reduction allowance for biomass heaters complying with the emission limit value for dust of 2.5 mg/m3 can be applied for at a flat rate of EUR 2,500.

The grant components are cumulative. In total, however, the subsidy rate for the heating replacement is a maximum of 70%.

Applications for the subsidies can be submitted online at KfW on the customer portal meine.kfw.de. Applications for condominium associations and multi-occupancy buildings are submitted via a joint application (basic application) and, if necessary, additional applications. The joint application cover the basic grant and, where appropriate, the efficiency bonus and emission reduction allowance. For the climate speed bonus or income bonus, the owners occupying the buildings themselves must submit an additional application for their own housing unit.

Applying for an additional supplementary loan

For applicants who have a grant commitment from KfW for the heating replacement, a supplementary KfW promotional loan with low interest rates is also available; applications for this can be submitted to an on-lending bank, usually the applicant’s regular bank. The interest rates are subsidised using federal funds. The interest rates for a promotional loan with a term of 35 years and a 10-year fixed interest rate are currently 1.91% eff. for applicants who are private individuals with taxable annual incomes not exceeding EUR 90,000. For all other applicants, the interest rate is 3.90% eff. (Interest rates may change daily). The supplementary loan is only available in combination with a grant commitment from KfW for the promotion of heating replacement and/or an allocation decision from the Federal Office for Economic Affairs and Export Control (BAFA) for individual energy-efficiency measures. It is not possible to apply for the supplementary loan by itself.

Further funding schedule

At the end of February this year, KfW began implementing the heating replacement subsidy in accordance with its promotional roadmap. Since then, owners of self-occupied detached houses have been able to apply for grants as well as use the supplementary loan. The second stage, which started today, will be followed by the third and last applicant group at the end of August. The application process will then begin for companies and municipalities, owners of rented single-family houses and owners of self-occupied or rented apartments in housing associations in Germany, provided that measures are implemented on individual properties.

Important information: Eligible heating replacement projects can be started now by all applicant groups. If the project starts by 31 August 2024, the application can be submitted later, up to 30 November 2024. From 1 September 2024, the application must always be submitted before the work on site begins.

Customers have 36 months to complete the heating replacement. Proof of project implementation must be submitted to the “My KfW” customer portal no later than six months after completion of the project (date of the last invoice). Submission of evidence is possible approximately six months after the launch of the applicant group’s eligibility. This means, according to schedule, the group of self-occupied single-family home owners launched at the end of February can submit all documents digitally in September, while the second group of applicants launched today will be able to submit all documents digitally in November.

You can find more information at: www.kfw.de/heizung