The previous Building Energy Act (GEG), which had made headlines primarily due to the so-called 65 per cent rule, is now a thing of the past. It has been replaced by the Building Modernisation Act (GModG), which came into force on 29 July 2026. The Bundestag had already passed the Act on 10 July 2026, and the Bundesrat gave its approval.
What is changing fundamentally
The cornerstone of the previous regulations – namely the famous Section 71 of the GEG, which imposed a 65 per cent renewable energy requirement when replacing a heating system – has been completely repealed. The ban on the operation of older boilers and the obligation to seek advice when installing oil or gas heating systems have also been removed. The installation and continued operation of gas and oil heating systems therefore remain permitted for the time being.
In the long term, however, all heating fuels are to be climate-neutral by 2045. The path towards this goal will be regulated in stages via the so-called ‘bio-ladder’.
The ‘Bio-Staircase’: Rising organic content from 2029
Anyone installing a new gas or oil heating system from 2029 onwards must ensure that the fuels used contain an increasing proportion of biogenic substances or hydrogen. An overview of the requirements:
- From 2029: at least 10 per cent bio-based content
- From 2030: at least 15 per cent
- From 2035: at least 30 per cent
- From 2040: at least 60 per cent
Hybrid heating systems that combine a heat pump, solar thermal energy or biomass with a gas or oil component may also meet the requirements of the ‘Biotreppe’ scheme by 2035, subject to certain conditions. From 2035 onwards, verification by a qualified professional will be required.
New rules for tenants and landlords
A new cost-sharing arrangement is particularly relevant to tenancies. The Carbon Dioxide Cost Allocation Act is being supplemented by two new sections. Under these provisions, the operating costs of a gas or oil heating system newly installed in accordance with the new regulations – in particular additional costs arising from the CO₂ price, network charges and biogas components – will be split equally between the tenant and the landlord. This means that landlords who install a new heating system will, in future, bear part of the additional running costs for fuel themselves.
Evaluation and outstanding issues
The Act provides for a review of the regulations in 2030 with a view to the climate protection targets in the buildings sector. In addition, the Federal Government plans to introduce a further Act by the end of 2026 designed to support the roll-out of renewable gases such as biomethane and hydrogen.
Legal disputes over the GModG have already been announced. Deutsche Umwelthilfe has described the Act as constitutionally questionable. However, on 9 July 2026, the Federal Constitutional Court dismissed a legal challenge brought by Die Linke, which had sought to prevent the Act from being passed before the summer recess.
Landlords, homeowners and tenants should now keep an eye on the new requirements, particularly if they are planning to replace their heating system or carry out modernisation work. If in doubt, it is advisable to seek legal advice to ensure you understand your own situation correctly.
Source: Haufe: Property
This article was created with the help of AI and has been editorially reviewed.
