ᐅ Incentives for Energy-Efficient Building Renovations under Section 35c of the Income Tax Act
Created on: 27 Feb 2020 09:34
M
Musketier
At the turn of the year, a new incentive for energy-efficient building renovation was introduced.
The legal basis is Section 35c of the Income Tax Act ( h t t p s://WWW.Gesetze-im-Internet.de/Einkommensteuergesetz/__35c.HTML )
Regulation on the determination of minimum requirements for energy-related measures, Federal Law Gazette 2020 I, p. 3
- Tax reductions are available for private individuals for energy-related measures on owner-occupied residential property
- 7% of the expenses in the first two years, up to a maximum of €14,000 (approx. $15,000) each year
- 6% of the expenses in the third year, up to a maximum of €12,000 (approx. $13,000)
Requirements:
- Measures must be carried out by a qualified company (according to a separate regulation)
- Proof of the measures by a certificate issued by the qualified company according to an officially prescribed form
- Payment in advance
- Use exclusively for personal residential purposes in the respective calendar year
No entitlement if:
- Expenses are business costs or advertising expenses
- The tax reduction is already claimed under craftsman services according to Section 35a of the Income Tax Act
- Measures are publicly funded (low-interest loans or grants)
The last point is likely to result in very low uptake of this incentive.
Nevertheless, it might still help some renovators.
The legal basis is Section 35c of the Income Tax Act ( h t t p s://WWW.Gesetze-im-Internet.de/Einkommensteuergesetz/__35c.HTML )
Regulation on the determination of minimum requirements for energy-related measures, Federal Law Gazette 2020 I, p. 3
- Tax reductions are available for private individuals for energy-related measures on owner-occupied residential property
- 7% of the expenses in the first two years, up to a maximum of €14,000 (approx. $15,000) each year
- 6% of the expenses in the third year, up to a maximum of €12,000 (approx. $13,000)
Requirements:
- Measures must be carried out by a qualified company (according to a separate regulation)
- Proof of the measures by a certificate issued by the qualified company according to an officially prescribed form
- Payment in advance
- Use exclusively for personal residential purposes in the respective calendar year
No entitlement if:
- Expenses are business costs or advertising expenses
- The tax reduction is already claimed under craftsman services according to Section 35a of the Income Tax Act
- Measures are publicly funded (low-interest loans or grants)
The last point is likely to result in very low uptake of this incentive.
Nevertheless, it might still help some renovators.