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German tenants continue to bear brunt of CO2 tax under new energy law

The German Tenants Association has expressed anger at the government's failure to ensure that the cost of the CO2 price is shared equally among tenants and landlords in its amendment to the heating costs law.

Thermostat
A thermostat. Photo: picture alliance / Jens Büttner/dpa-

On Friday, the Bundesrat – Germany’s upper house of parliament – voted through an amendment to the heating costs regulation that will implement new EU requirements on energy efficiency. 

But the tenants’ association has criticised the fact that the new regulation fails to scrap the one-sided CO2 tax, a green levy on carbon dioxide use that currently falls entirely on the shoulders of tenants.

“This leads to significantly higher heating costs, especially for tenant households in buildings that are not renovated,” Weber-Moritz told DPA. 

The CDU/CSU and SPD-led federal government had previously agreed that the additional heating costs caused by the CO2 price would be borne equally by landlords and tenants.

However, this proposal ultimately collapsed due to opposition from the CDU/CSU parliamentary group.

That means that tenants have been bearing the entire brunt of the €25-per-tonne CO2 tax alone since it was introduced at the start of the year.

Slamming the decision not to split the levy between landlords and renters, the tenants’ association said transferring the costs of the CO2 tax entirely to tenants could limit its effectiveness as a green tax.

The incentive effect of the CO2 pricing, which is intended to make climate protection investments in the building sector more attractive, is “completely lacking” when CO2 costs are passed on to tenants, Weber-Mortiz said. 

It comes as households in Germany are under increased financial pressure from soaring heating and energy costs, as well as a steep rise in the cost of living over the past six months or so. 

The additional costs could threaten to harm public perception of the transition away from climate-harming fossil fuels to clean, renewable energy, Weber-Moritz warned.

READ ALSO: Should Germany do more to support households with rising energy costs?

End of on-site meter readings

The amendment to the heating costs regulation stipulates that energy companies must be able to read newly installed meters remotely and that older meters must be retrofitted or replaced by the end of 2026.

The regulation is intended to eliminate the need for on-site meter readings.

As soon as the remote-readable meters are installed, tenants should receive information on their consumption every month.

According to the Bundesrat, the aim of the ordinance is to encourage consumers to be “conscious and economical in their use of heating energy” in order to reduce emissions. 

The newly installed meters must also be able to exchange data with devices from other manufacturers. This is to ensure that there is sufficient competition and that metering service companies cannot impose drastic price increases.

In the future, heating bills must also include a comparison that informs people both of their previous energy consumption and average consumption.


Euro notes and coins next to a German heating bill. In future, energy companies will have to be more transparent about usage and costs in their billing. Photo: picture alliance / dpa | Jens Büttner

Weber-Moritz said the new heating cost regulation could help save energy by providing more information on consumption and increased transparency on costs.

“Climate protection in the building sector, however, can primarily only be achieved through energy-efficient modernisation of the building stock,” she explained.

Weber-Moritz added that subsidies to the building sector would have to be increased. 

Furthermore, the tenants’ association is concerned that the regulation does nothing to protect renters against additional costs. 

“There is a fear that tenants will have to pay more for these devices and billing and consumption information than they will save in additional energy costs,” Weber-Moritz explained. 

READ ALSO: How households in Germany can tackle rising energy costs

Vocabulary 

Unrenovated – unsaniert

Heating cost surcharge – (der) Heizkostenaufschlag

Heating bill – (die) Heizkostenabrechnung 

Meter – (der) Zähler

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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RENTING

Reader question: Can I Airbnb my German flat during Euro 2024?

The UEFA European championship will be taking place in 10 cities across Germany this summer. If you live in one of them, are you allowed to make a bit of extra cash by renting out your space?

Reader question: Can I Airbnb my German flat during Euro 2024?

Nearly three million football fans are expected to descend on Germany for the UEFA Euro tournament this summer. A total of 10 cities across Germany will field matches for the Euros.

This map on UEFA’s website shows the German cities where games will be taking place during the tournament, which runs from Friday June 14th to Sunday July 14th, 2024.

The event has many people wondering if they could earn some extra cash by renting out their homes to tourists. Here’s how you can prepare to rent out your home and stay in line with the rules. 

READ ALSO: Euro 2024: Germany to sell cheap train tickets for fans attending games

Can I put my home on rental platforms like Airbnb in Germany?

Yes, Airbnb is not outlawed in Germany. But depending on the state there may be some additional regulations to keep track of. 

What rules do Airbnb hosts in Germany follow?

All rental hosts are required to collect and retain information about guests who stay at your property for three months or less. Hosts can either purchase reporting certificates online or create certificates themselves to meet this requirement. If you retain the guest data yourself, you will be required to comply with all data protection laws like the European General Data Protection Regulation (GDPR). 

READ ALSO: What to know about renting out your home as an Airbnb in Germany

Depending on the state and city, local authorities may have additional requirements for rental hosts. 

The tournament kicks off in Munich. The Bavarian city’s regulations allow you to rent your primary home to guests for a combined total of eight weeks per calendar year without a permit. Still, you could run into trouble if more than half of the floor space is rented out without a permit.  

Berlin has strict regulations regarding short-term rentals. There are no limits for primary residences, but you are required to receive permission from district offices. The city introduced a registration system for anyone interested in renting out part of their home for a short term period. 

If less than half of the space will be rented out, you’ll need to update the relevant district authority of your plans to receive a registration number that you must include when advertising the property. You are required to obtain a permit if you plan to rent more than half of your home. 

READ ALSO: Could a landmark court ruling help solve Berlin’s housing crisis?

Hamburg also has implemented a registration system to monitor the number of holiday rental homes listed on sites like Airbnb. It doesn’t cost money to get a registration number, and you are allowed to rent out a room for eight weeks or less per year. 

Apartments in Hamburg's Eimsbüttel area.

Apartments in Hamburg’s Eimsbüttel area. Photo: picture alliance/dpa | Marcus Brandt

Can I rent out my flat if I don’t own it?

If you’re renting a property in Germany, subletting without permission can get you in trouble with the law. Tenants interested in subletting their room or apartment are required to get written permission from their landlord before they can rent their space on platforms like Airbnb and Homeaway. 

Do different rules apply to second homes?

Yes, second homes, or places you live in for less than half of the year are governed by different guidelines. 

In Germany, secondary residences cannot be rented out for more than 90 days per year. If you live in the flat you may be allowed to rent it out during periods of absence (i.e., when you are travelling), so long as you don’t change the main function of the home to renting. 

What about taxes?

German tax law requires rental income to be taxed alongside other incomes. If you receive income in Germany from short-term lets, you are legally required to report the income amounts and file a tax return

Still, there are a few exceptions. If your rental income in a year is below €520, there are no taxes charged. But if your rental income exceeds €520 then you will be taxed on the entire amount. Of note, tax only considers income to be the profit retained after expenses are deducted. 

If you don’t intend to make renting your property a habit, you may be able to classify the income as a “hobby” by the tax office. Under this classification, if you end up bringing in an income it doesn’t have to be taxed, but you also cannot claim any expenses or losses. This policy does not apply to unlimited rentals or properties charging rent at 66 percent of other local rent prices.  

Rental property may also be subject to VAT like any other business. But good news, if your rental income does not exceed €17,500 and you don’t expect to earn more than €50,000 in a year, you are not liable for VAT. 

What happens if you break the rules?

You can face eye watering fines of up to €500,000 depending on the state you live in. Some cities like Frankfurt are cracking down by employing full time “Airbnb hunters” to look for illegal listings of homes and furnished residences online.  

Note that laws are constantly changing, so be sure to check your state’s website for up to date information on short term rental regulations.

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