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Heat pump in front of a single-family home in Düsseldorf: Initially a long waiting time for the application

Photo: Robert Poorten / IMAGO

There has been a long debate about the new heating law, but now homeowners can apply for money to replace the heating system.

Anyone interested in climate-friendly heating has been able to contact the KfW development bank since Tuesday morning.

The application process is initially only open to owners of single-family homes who live in them themselves.

In the morning there were waiting times when registering on the KfW portal because there was obviously a lot of rush.

»In front of you in the waiting room are: 529 people.

The waiting room has been paused,” the website said.

A little later, the virtual queue became significantly smaller and access to the portal was possible within minutes.

Landlords and their tenants as well as homeowners' associations will have to wait until May.

provided that measures are implemented on common property.

Owners' associations that implement measures on so-called special property even have to wait until August.

This usually refers to floor heating systems.

However, KfW emphasizes that there are transitional regulations.

»Eligible heating replacement projects can be started now.

If the project starts by August 31, 2024, the application can be made up until November 30, 2024," writes KfW.

The usual procedure is: first submit an application, wait for the funding to be approved and then start construction work.

Up to 70 percent can be funded

The new heating law of the traffic light coalition, which is behind the new subsidies, came into force on January 1st.

According to this, every newly installed heating system will have to be powered by 65 percent renewable energy in the future, subject to local municipal heat planning.

In many cases, a heat pump can be considered as a new heating system.

In return, homeowners can apply for funding:

  • All owners who replace their gas or oil heating receive a base subsidy of 30 percent.

  • A further 30 percent funding is intended for people who have a taxable annual income of up to 40,000 euros.

  • Anyone who replaces their heating system by 2028 should receive a climate speed bonus of 20 percent.

However, the maximum eligible investment costs are capped at 30,000 euros.

The funding should not exceed 70 percent.

So you can win up to

21,000 euros


Since January 1, 2024, only KfW has been responsible for promoting heating systems, i.e. heat pumps, biomass heating systems, solar thermal systems and hydrogen fuel cell heating systems.

The Federal Office of Economics and Export Control (BAFA) promotes efficiency measures on buildings such as new windows and insulation, as well as system technology such as ventilation systems, heating optimization measures such as hydraulic balancing and the individual renovation schedule (iSFP), which helps homeowners plan the renovation step by step.

The federal government is planning these funding programs

Climate-friendly new buildings (KFN) section open

Both private individuals and housing companies can benefit from the funding, provided they build a so-called Efficiency House 40. Such houses only use 40 percent of the energy that a standard house requires.

Builders can apply for a reduced-interest loan of up to 100,000 euros per residential unit; with a special sustainability seal, up to 150,000 euros are available.

However, fossil fuel heating must not be part of the plan.

Neither is a fireplace.

The program budget for 2024 is 762 million euros - similar to what was originally planned last year.

At that time, however, the pot had to be increased by another billion euros due to high demand.

It is still unclear whether there will be enough scope this year too.

Home ownership for families (WEF) section expand

Federal construction funding for low- and middle-income families has been in place since June 2023, and further improvements are planned for the coming year.

The basics of the program: The taxable annual income may not be more than 90,000 euros.

For families with two children, the sum increases to 100,000 euros, and for each additional child by 10,000 euros.

Attention: The taxable income is always slightly lower than the gross income.

The money from the program flows to the applicants indirectly in the form of an extremely low-interest KfW loan.

The interest rate of less than 1 percent can be as of 1.

March will even be fixed for 20 years.

A loan of up to 170,000 euros is possible.

Houses purchased or built with a quality seal for sustainable buildings allow the loan to be increased by a further 50,000 euros.

Of course, climate-friendly construction is mandatory - efficiency standard 40 is the measure of all things.

The budget has earmarked 350 million euros for this program this year.

AreaJung buys old fold-outs

Anyone who is considering buying an old building instead of a new building on a greenfield site can also take advantage of funding in 2024.

The target group here should also be families with underage children.

The exact requirements have not yet been determined, but the budget has: 350 million euros, which sounds less than it is - the money is intended to subsidize the interest rate in a similar way to the home ownership program for families.

From a public sector perspective, the program kills two birds with one stone.

In many smaller cities and communities, residential buildings in central locations are empty.

For new development areas on the outskirts of the city, communities also have to meet expensive requirements.

“Young buys old” helps to conserve resources and brings life back to the inner cities.

AreaCommercial to Residentialopen

From the perspective of the federal government, the program pursues a similar goal to the “Young Buys Old” program.

In this case it is about commercial and office space that is no longer needed and is to be converted into living space.

Experts see enormous potential here.

Thousands of new apartments could be created, especially in densely populated metropolitan areas.

Since the relevant projects are very large, the program is initially aimed primarily at housing companies.

But the savings should ultimately also benefit buyers who want to buy condominiums there.

The program is scheduled to start in autumn 2024, and 120 million euros are planned.

AreaDegressive AfAopen

A new regulation of the tax depreciation options could also help to stimulate new construction and have an overall effect on prices.

In August, Geywitz announced a degressive depreciation rate of 6 percent.

This means that investors will have improved opportunities to deduct construction costs in the future, free of restrictions on apartment size, rent levels or energy efficiency.

However, the states do not want to bear the loss of revenue that they will suffer and refused the Bundesrat's approval of the law passed in the Bundestag in November.

Now the mediation committee has to find a compromise.

AreaClimate-friendly new building in the low-price segment (KNN)open

The latest funding program is primarily intended to promote the construction of small rental apartments, for example for pensioners and single parents or students.

It has not yet been formulated in detail, but what is certain is that the Efficiency House 40 will once again be defined as the standard.

However, it is possible that compromises in construction standards will be accepted in order to keep costs within limits.

In any case, the rents should be in the lower to medium price range.

The program is scheduled to launch this year and run for several years.

The investors are to be supported with a total of one billion euros.

If Geywitz prevails over her cabinet colleagues, more money could follow in 2025.

But the negotiations are likely to be difficult.

The next budget will probably be at least as competitive as the one for 2024.

There had been bitter disputes over the heating law for months.

In general, functioning heaters can continue to be operated.

This also applies if a heater breaks but can still be repaired.

With the reform for more climate protection, the federal government wants to advance the heating transition in the building sector and protect consumers from price jumps for oil and gas if CO₂ prices rise in the coming years.

In the second half of 2023, oil and gas heating systems were particularly in demand.

The fossil systems brought record sales to heating manufacturers during this period, and many secured corresponding systems before the new heating law came into force.