Tax Incentives For Energy Modernization

The Association for Insulation Systems, Plaster and Mortar (VDPM) makes it easier for owners of residential property, in coordination with the tax authorities, to tax energy-related modernization measures.

Since January 1, 2020, owners of owner-occupied residential property - house or condominium - have been able to partially deduct the costs of energy-efficient modernization of their property from tax. Deductible are 20 percent of the costs spread over three years. The legislators deliberately designed the boundary conditions to be “simple”. This means that the measure does not have to be “registered” before the start, nor does an external expert or energy consultant have to be involved. Nevertheless, there are of course requirements that must be observed in order to be able to take advantage of tax incentives.

Owners who want to know more about the funding usually contact their tax advisor. In order to gain an initial overview of the criteria to be observed, a consultation can be made to a new brochure from the Association for Insulation Systems, Plaster and Mortar eV (VDPM), which is aimed specifically at owners. In addition to the formal requirements, the structural requirements are also compiled there. Simply observing the legal provisions that are already applicable is not enough. Only measures that go beyond the legal requirements are funded. In most cases, however, this makes sense and is also economical. According to the VDPM, the moderate additional costs are compensated for by the funding and energy savings. Where there are reasonsIt is also possible to deviate from the structural requirements. All of this is summarized in the VDPM brochure in a compact and understandable way. The Federal Ministry of Finance (BMF) has also given the following criterion:

In accordance with Section 35c (1) sentence 7 of the Income Tax Act, the tax reduction for energy measures for buildings used for own residential purposes can only be claimed if an official certificate issued by the contracting specialist company proves that the requirements of Section 35c (1) sentence 1 to 3 EStG as well as the requirements according to the regulation for the determination of minimum requirements for energetic measures for buildings used for own residential purposes according to § 35c of the Income Tax Act (energetic renovation measures regulation - ESanMV) are fulfilled.

The BMF has published a sample for this certificate. The VDPM has made a fillable document out of it and makes it available to all interested parties.

The VDPM brochure “Saving Taxes” can be downloaded as a PDF, as can the sample declaration from the specialist company.

Further information:

www.vdpm.info