German heating law for landlords: what applies now the 65% rule is gone
Few pieces of legislation have unsettled German property owners as much as the former Gebäudeenergiegesetz (Building Energy Act), which most people simply call the “Heizungsgesetz” – the heating law. It is now called the Gebäudemodernisierungsgesetz (GModG), the Building Modernisation Act – and the two provisions the entire debate revolved around have been repealed: the 65% rule and the operating ban on old boilers. This article works through the law as it now stands from a landlord's perspective: what is actually required, which deadlines remain, and what of it you may pass on to the rent.
What changed: §§ 71 to 73 have been repealed
The statute is now titled “Gesetz zur Einsparung von Energie und zur Modernisierung der Wärmeversorgung in Gebäuden” (Act on Energy Saving and the Modernisation of Heat Supply in Buildings), abbreviated GModG. More important than the name is the substance: in the official table of contents, the provisions on which the entire public debate rested now appear only as “(weggefallen)” – repealed: § 71 (the 65% rule), § 72 (the operating ban on boilers) and § 73 (the special rule for one- and two-family houses). A markedly different concept has taken their place.
The new principle: a choice of ten options
The governing provision for existing buildings is now § 42 GModG. It attaches to the replacement of a heating system: where a heating system in an existing building or building network is replaced, the owner may under § 42 (2) GModG choose one of ten options, or a combination of them. The list deliberately opens with number 1: “a heating system fired with gas, heating oil or LPG”. Alongside it stand, among others, the electrically driven heat pump, solar thermal, biomass and hydrogen, hybrid solutions, high-efficiency CHP units, direct electric heating, connection to a heat network, and “another innovative heating solution”.
The choice of technology is therefore free. What it costs is decided by the follow-on obligation attached to individual options: § 42 (1) GModG refers for those requirements to the provisions that follow.
Install gas or oil now and you take on a quota
The decisive rule for fossil systems is § 43 (1) GModG, and it turns on a clear cut-off date: where a heating system fired with gas, heating oil or LPG is newly installed in an existing building after 29 July 2026, the owner must ensure that a growing share of the heat is generated from climate-neutral fuels.
| From | Minimum share of climate-neutral fuels |
|---|---|
| 1 January 2029 | 10% |
| 1 January 2030 | 15% |
| 1 January 2035 | 30% |
| 1 January 2040 | 60% |
The provision names biomethane, bio-oil, biogenic LPG and green, blue, orange or turquoise hydrogen, including derivatives made from them. Important for the investment case: this duty falls on the building owner, not on the fuel supplier. What that share will cost in ten years cannot be quantified responsibly today – and that is precisely the risk that belongs in your calculation if you still opt for a gas boiler in 2026. There is a further consequence that is not in the GModG: for exactly these systems, the CO2 cost split between landlord and tenant is also re-regulated from 2028 — the step model then gives way to an equal split.
§ 43 (3) and (4) GModG allow alternative routes: the quota may also be met through a solar thermal installation or through a ventilation system with heat recovery, subject to the requirements set out there. Anyone wanting to count more than 15% towards the quota needs evidence from a qualified person or a contractor's declaration.
The duty that remains: insulating the top-floor ceiling
Independently of the heating system, the retrofit duty in § 35 GModG continues to apply. Owners of a residential building must ensure that top-floor ceilings which do not meet minimum thermal protection are insulated so that the heat transfer coefficient does not exceed 0.24 watts per square metre and kelvin. The duty counts as satisfied if the roof above is insulated to that standard instead.
The trap when buying a one- or two-family house
For buyers, § 35 (3) GModG is the relevant point – and the mechanism is the same one that used to apply to the operating ban: in a residential building with no more than two flats, one of which the owner occupied on 1 February 2002, the retrofit duty falls due only “in the event of a change of owner after 1 February 2002, to be met by the new owner”. The period is two years from the first transfer of ownership after that date.
An older property that went unchallenged in the seller's hands for decades can therefore become your obligation on purchase – with a hard two-year clock. That belongs in the price negotiation and in the cash-flow calculation, not in the “sometime later” category.
The deadline that expires in 2027: heating inspection in larger buildings
The overlooked date for landlords of larger properties sits in § 60b GModG. A water-based heating system operated in a building with at least six flats or other self-contained units must undergo a heating inspection and optimisation:
- installed before 1 October 2009: by the end of 30 September 2027;
- installed after 30 September 2009 and not a heat pump: within one year of 15 years having elapsed since installation.
The inspection covers, among other things, the system's settings, the efficiency of the circulation pump, insulation of pipework and options for lowering the flow temperature. This is not a duty to renovate but a duty to inspect and optimise – yet it carries a date, and for systems predating October 2009 that date falls in autumn 2027.
What you may pass on to the rent
Replacing a heating system is a modernisation measure for which the German Civil Code (BGB) provides a dedicated route. Under § 559e (1) BGB the landlord may increase the annual rent by 10% of the costs incurred for the flat less any third-party funding claimed – provided the measure meets the funding conditions in principle and grants were in fact claimed. If no funding is granted although the conditions are met in principle, the ordinary route under § 559 BGB remains.
Two limits apply. Under § 559e (2) BGB a flat 15% deduction is made for costs that would have been necessary for maintenance. And under § 559e (3) BGB the monthly rent may not rise on account of that measure by more than 0.50 € per square metre of living space within six years. The mechanics of the pass-through – the maintenance share, deductions and caps – are worked through in our separate article on the modernisation rent increase. Which running costs have to be kept apart from it is covered in our article on non-recoverable service charges.
Owners who live in the building themselves pass nothing on to a tenant and settle with the tax office instead: replacing the heating in your own home carries its own tax credit, which we have worked through — rates, caps and deadlines — in our article on the energy retrofit tax credit.
And the tax side?
Replacing the heating system in a let property is normally maintenance expenditure (Erhaltungsaufwand) and therefore immediately deductible. Take care if the replacement falls within the first three years after purchase: it may then run into the 15 % threshold for acquisition-related production costs and have to be depreciated over the useful life instead of taking effect at once. Grants claimed additionally reduce the depreciation base.
What the courts have decided
A landlord who replaces the old system not with a heating system of their own but with a heat-delivery arrangement (contracting) faces an additional tenancy-law question: may the cost of the delivered heat simply be passed on as a service charge? The Federal Court of Justice (Bundesgerichtshof, BGH) has decided that for the common case where the tenants previously heated their flats with their own individual stoves.
BGH, judgment of 20 May 2026 – VIII ZR 47/25
Where a landlord switches the heat supply from individual stoves that the tenants operated themselves to the independent commercial delivery of heat by a heat supplier, § 556c BGB on passing on the cost of that heat delivery as a service charge applies neither directly nor by analogy. The 8th Civil Senate reasons that the provision presupposes a cost-allocation agreement for heat as a service charge that already existed at the time of the switch — a tenant who previously heated independently had no such agreement. For the landlord, the practical consequence is this: switching to a heat-contracting model does not substitute for a missing contractual basis. Without an express clause in the tenancy agreement or an effective supplementary agreement, the cost of the heat delivery cannot be charged as a service charge — it stays with the landlord.
Frequently asked questions
Do I have to replace my 25-year-old gas boiler now?
No. The 65% rule in the former § 71 GEG has been repealed, and the GModG no longer contains any general operating ban on boilers – § 72 and § 73 appear in the table of contents as “(weggefallen)”, repealed. You may continue to operate and repair a working system.
May I still replace a broken gas boiler with another gas boiler?
Yes. § 42 (2) no. 1 GModG expressly names a system fired with gas, heating oil or LPG as a permitted replacement option. If it is newly installed after 29 July 2026, however, you take on the quota obligation under § 43 (1) GModG.
Is there still an end date for fossil fuels in 2045?
Not as an operating ban in the GModG – the former limit of “no later than the end of 31 December 2044” sat in § 72, which has been repealed. § 42a GModG does, however, announce a separate statute intended to switch fuels for building heat entirely to climate-neutral sources from 2045. Economically the trajectory still points at 2045, but via the fuel price rather than a prohibition.
What about individual flat heating systems in a condominium?
The former special procedure for condominium associations sat among the repealed §§ 71 ff. We deliberately state no rule on it while we cannot establish the successor text unambiguously from the official version. For the reserve side of that question, see our article on the maintenance reserve.
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- GModG – table of contents (§§ 71, 72, 73 “repealed”) — Gesetze im Internet (retrieved on 7 August 2026)
- § 35 GModG (retrofit duty for existing buildings) — Gesetze im Internet (retrieved on 7 August 2026)
- § 42 GModG (principle, ten replacement options) — Gesetze im Internet (retrieved on 7 August 2026)
- § 42a GModG (announced green gas / green heating oil quota) — Gesetze im Internet (retrieved on 7 August 2026)
- § 43 GModG (quota duty for gas, heating oil, LPG) — Gesetze im Internet (retrieved on 7 August 2026)
- § 60b GModG (inspection and optimisation of older heating systems) — Gesetze im Internet (retrieved on 7 August 2026)
- § 559 BGB (rent increase after modernisation measures) — Gesetze im Internet (retrieved on 7 August 2026)
- § 559e BGB (rent increase after installation of a heating system) — Gesetze im Internet, consolidated version (retrieved on 7 August 2026)
- § 556c BGB (cost of heat delivery as a service charge, regulatory authorisation) — Gesetze im Internet (retrieved on 25 August 2026)
- BGH, judgment of 20 May 2026 – VIII ZR 47/25 (§ 556c BGB inapplicable to a switch from individual stoves to heat delivery) — Federal Court of Justice (retrieved on 25 August 2026)
This article provides general orientation and does not replace individual tax or legal advice within the meaning of § 3 StBerG. What counts is the wording of the statute as currently in force, your local municipal heat planning, and advice from an authorised professional.