Energy-efficient renovation with increased property value

Experts agree: The need for renovation in German real estate is enormous. Approximately 70 percent of all houses in Germany are in poor energy condition. Therefore, buyers of single-family and two-family homes in Germany are required to retrofit their properties. Buyers of older properties should consider the following.

According to energy experts, unrenovated residential properties consume 150 to 200 kilowatt hours (kWh) of final energy per square meter per year – far more than necessary. These properties are often also heated with fossil fuels such as gas or oil.

Retrofitting obligations

Buyers of older properties should always carefully examine the property's energy efficiency and any recent renovations. They may be required to retrofit energy-efficient buildings – this is mandated by law. For single-family and two-family homes, the following three retrofit requirements apply:

• Water and heating pipes in unheated rooms must be insulated
• The top floor ceilings need to be insulated
• Heating systems older than 30 years must be replaced

Owners have two years to implement the necessary renovation measures. This generally applies to properties built before 2002.

Financially rewarding

Energy-efficient renovations are worthwhile because they reduce energy consumption. Up to a third of energy costs can be saved this way. For example, improved thermal insulation can save around 25 percent on exterior walls, while roof insulation and replacing old windows can each save around 15 percent.

Lower energy consumption generally increases property value. Furthermore, renovations carried out by the seller save the buyer the effort of doing them themselves. Thermal insulation, modern heating systems, and the installation of ventilation systems with heat recovery are often worthwhile investments.

Which measures are sensible?

However, it depends on the individual case. Every property is unique, and not every measure is suitable for every property. Therefore, it is essential to consult both an energy expert and a real estate professional early on. While the energy expert can provide information about the effectiveness of energy-efficient renovation measures, the real estate professional knows how these measures will affect the property's value.

Do you have questions about which renovation measures will increase the value of your property? Contact us! We'd be happy to advise you.

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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