Heating replacement grants in Germany — what changed in July 2026

If you read anything about German heating grants before July 2026, it is no longer correct. Not partly — four figures changed at once, and so did the law the whole thing rests on.

This page sets the old beside the new, then gives the figures that apply today.

First: the law itself was replaced

On 29 July 2026 a new law came into force, the Gebäudemodernisierungsgesetz. It replaces the Gebäudeenergiegesetz — the law the press called the Heizungsgesetz.

The central change is that the 65 per cent renewable-energy requirement is gone. The federal government states it in these words: Die gesetzliche Vorgabe eines einheitlichen Anteils von mindestens 65 Prozent erneuerbarer Energien bei der Wärmeversorgung für alle Neu- und Bestandsbauten entfällt.

Owners may now choose their heating system freely, gas and oil included.

But hold on to the distinction most people miss: legally permitted and financially supported are two different things. Gas and oil are permitted again. They receive no grant at all.

Second: the grant rates changed on 21 July 2026

What was, and what now is:

• Grundförderung, the base rate: 30 per cent — unchanged, and open to everyone, landlords included
• Klimageschwindigkeitsbonus, the speed bonus: was 20 per cent, now 16 per cent — and only for owners who live in the property
• Einkommensbonus, the income bonus: was a flat 30 per cent below 40,000 euros, now tiered across three bands
• Effizienzbonus and Emissionsminderungszuschlag: abolished outright — they no longer appear in the rules
• Cap on eligible costs: was 30,000 euros, now 28,000 euros for the first dwelling

The new income bonus is measured on the household taxable annual income:

• up to 30,000 euros → 40 per cent
• up to 40,000 euros → 30 per cent
• up to 50,000 euros → 10 per cent

A new family supplement was added: the threshold rises once, by 10,000 euros, where a child under 18 for whom Kindergeld is drawn lives in the property.

The combined ceiling is 70 per cent. Eighty is reached only by an owner-occupier with a household income of 30,000 euros or less — 40,000 with the family supplement.

And both the cap and the speed bonus are on a published decline

This is the part to plan around:

• the cap on eligible costs for the first dwelling falls by 750 euros on 1 February 2027, then every six months, on 1 February and 1 August
• the speed bonus falls by 4 percentage points on 1 February 2027, then every six months, and ends entirely on 1 August 2028

As of September 2026 neither reduction has started. So for anyone planning to replace a heating system in the next two years, every month of delay has a price that is already published.

Caps for further dwellings: 15,000 euros each for the second through sixth, 8,000 euros each thereafter.

Who qualifies for the speed bonus?

It is for replacing a heating system that still works — not a broken one:

• oil, coal, Gas-Etagenheizung or Nachtspeicherheizung → regardless of age
• gas or biomass → only if it was commissioned at least twenty years before the application date

Which systems are funded?

Funded: the heat pump Wärmepumpe, Biomasse, solar thermal Solarthermie, the fuel cell Brennstoffzelle, hydrogen-ready heating (the additional cost only), and connection to a Wärmenetz or a Gebäudenetz.

Not funded: self-built systems and prototypes, second-hand equipment or equipment assembled substantially from used parts, and a district-heating connection where connection is legally mandatory anyway.

The sequence where most applications are lost

The rule that ends applications: starting work before you apply destroys the whole grant. And yet the bank wants a signed contract at the moment you apply. The resolution is not a trick — it is a clause in the contract.

1. Engage a specialist firm or an energy-efficiency expert and obtain the Bestätigung zum Antrag (BzA)
2. Sign the supply or works contract — and it must contain a suspensive or resolutive condition tied to KfW approval. That clause is what stops the signature from counting as the start of work
3. Register in Meine KfW and file the application with the BzA number
4. Carry out the work after approval
5. Submit the evidence and the grant is paid

A contract without that clause means the grant is gone, however eligible the work itself was.

Insulation, windows and doors — a different authority

These go to BAFA, not KfW, and form a separate programme:

• base rate 15 per cent, plus 5 per cent with an individual renovation roadmap iSFP, so 20 per cent
• cost caps: 30,000 euros for the first dwelling per calendar year, 15,000 for the second through sixth, 8,000 thereafter — rising to 60,000, 30,000 and 15,000 with an iSFP
• planning and site supervision: 50 per cent of the cost, capped at 5,000 euros for a single-family house

And here is another 21 July 2026 change that most articles miss: the iSFP bonus now has a minimum investment — 30,000 euros for a single-family house — and the bonus is calculated only on the amount above that minimum. The minimum must be reached within one application; separate applications in the same year cannot be added together to reach it.

The BAFA equivalent of the BzA is called the Technische Projektbeschreibung (TPB) and is valid for two months.

The tax alternative: §35c EStG

Instead of a grant you can take a tax reduction: 20 per cent of the cost spread over three years — 7 per cent in the year of completion (capped at 14,000 euros), 7 per cent in year two (14,000), 6 per cent in year three (12,000). The maximum is 40,000 euros per dwelling.

Conditions: the building must be at least ten years old, and you must own the property and live in it yourself.

The two cannot be combined for the same measure — grant or tax relief, not both. The choice is made per measure, not for the whole house.

What if you rent?

A tenant cannot apply — the grant belongs to the owner. And a landlord receives the 30 per cent base rate only; the speed and income bonuses are reserved for owner-occupiers.

Two things in the new law do concern tenants, and both are settled:

• from 1 January 2028: for newly installed heating systems, tenant and landlord each bear half of the CO2 costs and the gas network charges
• from 1 January 2029: the price component of the biogenic fuels is likewise split in half

As for the Modernisierungsumlage — the share of modernisation cost a landlord may add to the rent — we give no figure here. The law changed weeks ago and the official pages that carried the number have been withdrawn. Ask a Mieterverein or a lawyer before accepting any rent increase on that ground.

Announced, but not yet in force

Be careful not to be sold a future as if it were the present. The following are announced with no published values: the Wertschöpfungsbonus, expected in the first quarter of 2027, an additional building-envelope bonus at the same time, and bonuses for worst-performing buildings and for EU-manufactured heat pumps from 2027.

The mandatory blending of sustainable fuels into fossil heating — the Biotreppe — does have a fixed timetable: 10 per cent from 2029, 15 per cent from 2030, 30 per cent from 2035, 60 per cent from 2040. Which means anyone installing a gas system today already knows its running cost will rise.

Questions and answers

Is the 65 per cent renewable requirement still in force?
No. It fell when the Gebäudemodernisierungsgesetz came into force on 29 July 2026.

Can I install a new gas heating system now?
Yes, it is legally permitted again. But it receives no grant, and the mandatory sustainable-fuel share will raise its running cost from 2029.

What is the highest grant rate I can reach?
70 per cent in general, and 80 per cent for an owner-occupier with a household taxable income of 30,000 euros or less.

What is the maximum cost that counts?
28,000 euros for the first dwelling, then 15,000 for each of the second to sixth, and 8,000 for each one after that.

Do I sign the contract before or after applying?
Before — but with a suspensive or resolutive condition tied to KfW approval. Without that clause the signature counts as the start of work and the grant is lost.

Can a tenant apply?
No. The grant is for the owner.

Can I take the grant and the tax relief together?
Not for the same measure. Choose one per measure.

Is insulation funded too?
Yes, but through BAFA rather than KfW: 15 per cent base, 20 per cent with an iSFP.

Will the rates change soon?
Yes, on published dates: the first reduction is 1 February 2027, and the speed bonus ends on 1 August 2028.

The figures above are correct as at 4 September 2026, taken from KfW Merkblatt 458 (Stand 07/2026), the BAFA pages and the federal ministry site. This area is moving unusually fast — check the KfW page before you sign anything, and do not rely on any article or video published before July 2026, ours included.