From 2023 onwards, the CO2 tax will also be paid by the owner

A new year is just around the corner, and with it come new regulations for owners who rent out their property. From January 1, 2023, landlords will also be required to pay the CO2 tax. Previously, only tenants paid for carbon dioxide emissions. How the costs are divided between landlords and tenants depends on the property.

Background: The CO2 tax has been levied on oil and gas since January 1, 2021. The certificate price per ton of CO2 emitted is increased annually. The price of €25 per ton, which was set for 2021, rose to €30 in 2022. Further increases are now being suspended due to rising energy prices. The cost-sharing between landlord and tenant depends on the building's energy efficiency.

Saving energy and carrying out energy-efficient renovations pays off

What will happen with the certificate price in 2024? The increase will continue in stages: €35 will be charged in 2024, and €45 from 2025. From 2026 onwards, the price will be determined by auction and will then be between €55 and €65. The stated goal of the CO2 tax is to encourage tenants to save energy and landlords to carry out energy-efficient renovations.

How much does everyone have to pay?

The landlord's share of the CO2 tax depends on the property's energy efficiency: the worse the energy efficiency, the higher the share of the CO2 tax. For example, if CO2 emissions exceed 52 kilograms per year, the landlord must pay a maximum of 90 percent of the tax, and the tenant 10 percent.

If the energy standard EH55 is met and emissions are less than 12 kilograms per square meter, the tenant pays 100 percent of the tax. However, if emissions are between 32 and 37 kilograms, each party pays 50 percent. This tiered model links the cost sharing between tenant and landlord to the annual CO2 emissions per square meter of the property. For properties not used for residential purposes, a 50:50 split is initially in place.

How do I know what needs to be paid for my property?

You need to know the annual CO2 emissions per square meter. This information can be found on page 2 of the energy performance certificate for residential buildings.

What subsidies are available for energy-efficient renovations?

Information on available subsidies in the form of funding programs and tax deductions can be found, among other places, in the Funding Navigator (especially for North Rhine-Westphalia) or at the Federal Ministry for Economic Affairs and Climate Protection, whose funding database provides comprehensive information.

Would you like to know how an energy-efficient renovation will affect the value of your property? Ask us! We'd be happy to advise you on this topic.

Notes

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

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