What will change for property owners in 2025
The year 2025 will bring numerous changes for property owners, affecting both financial and regulatory aspects. Here is an overview of the most important changes and tips on how you can prepare for them.
Property tax reform
From 1 January 2025, a new valuation basis for calculating property tax will apply in Germany. Property owners will be informed of the amount of property tax to be paid from 2025 by the respective municipality's property tax assessment notice. The prerequisite for this is that the municipalities have previously set the new assessment rates. The first payment date for property tax is 15 February 2025, by which date the tax assessment notices must be sent out based on the new assessment rates. The revaluation may result in a higher or lower tax burden for individual owners.
Increase in the CO₂ price
The CO₂ price for fossil fuels is rising from 45 to 55 euros per tonne. This means higher heating costs for buildings heated with gas or oil. Owners can save energy costs in the long term by switching to more climate-friendly heating systems or installing photovoltaic systems. These costs are shared between tenants and landlords according to the so-called graduated model.
Obligation to install smart meters
From 2025, households with an electricity consumption of between 6,000 and 100,000 kWh per year as well as those with electricity-generating systems (e.g. photovoltaics) with an output of 7 kW or more and households with controllable consumption devices (e.g. heat pumps) will be obliged to install smart meter gateways. These devices enable more efficient energy use and offer the opportunity to benefit from dynamic electricity tariffs. It is possible to apply to the metering point operator for the installation of a new electricity meter (smart meter). From 2025, energy suppliers will be obliged to offer dynamic electricity tariffs to households with a smart meter. However, the installation of this technology may require a fundamental conversion of the existing meter cabinet. In homeowners' associations (WEGs), the meter cupboard is part of the common property. If a conversion is necessary, the WEG must first pass a corresponding resolution, according to the "Wohnen im Eigentum" association. The costs for this are generally considered a maintenance measure and must therefore be borne jointly by all owners.
Tax benefits for smaller photovoltaic systems
When the Annual Tax Act (JStG) 2024 comes into force in January, owners of apartment buildings and commercial properties will also benefit from tax relief when operating photovoltaic systems with an output of up to 30 kilowatts peak. This is an exemption limit, not an allowance. This means that if this output limit is exceeded, the entire system becomes subject to tax.
Housing benefit
From 1 January 2025, housing benefit will be increased by an average of around 15 percent. This increase in housing benefit will ensure that the state housing cost subsidy is adjusted in line with rising prices and rental costs in Germany. Owner-occupiers will also have the opportunity to receive a higher housing allowance if necessary. The aim is to relieve the burden on working people and pensioners receiving housing benefit so that they do not have to apply for citizen's benefit or basic income support due to higher rents and rising incomes.
Changes to tenancy law
Modernisation measures and rent control: If modernisation measures are carried out to increase energy efficiency, these can increase the rent, but only within certain limits. From 2025, there could be adjustments to prevent rent increases from being too high as a result of energy-efficient refurbishments. Landlords should find out how these regulations apply to planned renovations.
Digital receipts: In future, landlords and property managers will be able to choose to make receipts for utility bills available exclusively in electronic form or send them by email. They have the option of providing tenants with either the original receipts in paper form or electronic copies, such as scanned documents.
Expiring transition period for the heat pump privilege
The previous billing privilege for landlords, according to which heating costs could be charged regardless of consumption when using heat pumps, was abolished in October 2024 by amending Section 7 of the Heating Costs Ordinance. The transitional period for implementing this regulation ends on 30 September 2025. Until then, landlords are obliged to install consumption recording devices to ensure consumption-based billing.
Conclusion
The year 2025 will bring significant changes for property owners, affecting both financial and regulatory aspects. Particularly in the area of energy efficiency and climate protection, there are numerous adjustments that require careful planning and preparation. Key issues include the reform of property tax, rising CO₂ prices, the obligation to install smart meters and the adjustment to stricter emission limits for wood-burning stoves. There are also tax benefits for smaller photovoltaic systems and extended subsidy programmes for energy-efficient renovations.
The introduction of digital receipts and the changes to tenancy law, particularly for modernisation measures, pose new challenges for landlords. In addition, the obligation to install solar panels on new buildings and roof conversions remains in place, which offers additional incentives to use renewable energies.
Property owners should familiarise themselves with these changes at an early stage in order to benefit from subsidies and tax relief as well as to avoid legal and financial disadvantages. Targeted preparation for the upcoming changes makes it possible to make the property energy-efficient in the long term and benefit from the government incentives.
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