We all remember the waves that recently raged through the media, frothing over the topic of "heat pumps". Even though the far-reaching expansions to the German Building Energy Act were initially halted, it still went into effect in its original form in 2020 and received another update beginning in 2023. The GEG obliges homeowners to carry out energy-saving renovation measures on their properties in order to meet the minimum legal requirements.
From January 2024, it will be expressly possible to withdraw capital from an existing Riester contract for this purpose.
Withdrawing capital for refurbishing your home: this is how you do it!
On 16.12.2022 amendments were made to the Income Tax Act (EStG) to §92a paragraph 1 number 3. This means you can withdraw capital from a Riester contract for the purpose of energy-related renovation measures without misusing the contract.
However, certain conditions apply: for example, there are minimum amounts of 6,000 euros, which can be withdrawn within three years of the acquisition or production of the property. Otherwise, a minimum amount of 20,000 euros must be adhered to. The energy measures themselves must be carried out by a specialized company and they must confirm that they have implemented them in accordance with an officially prescribed model. It is expressly forbidden to claim subsidies for the construction measures or to enter them into accounting as operating expenses, income-related expenses or extraordinary burdens.
Please note that subsidized pension assets may not be used to repay a loan that was taken out for energy-related measures.
Helpful to know: not every measure is covered
So what exactly do "energy measures" mean? This refers to measures within the meaning of Section 35c (1) sentences 3 and 4 EstG. Examples include the thermal insulation of walls, roof surfaces or floor ceilings, replacing windows and exterior doors or installing a ventilation system; furthermore, replacing or optimizing an existing heating system if it is older than two years or installing digital systems for the energy optimization of operation and consumption.
Please note that not all energy-related measures are covered. Withdrawing capital for updating a solar panel system that serves purely to generate electricity is excluded – but it can be withdrawn for a solar thermal system to generate hot water. The decisive feature here is the formal confirmation of the specialist company implementing it.
It is important to note that grants cannot be claimed for expenses that have been applied for. Assuming refurbishment costs 60,000 euros and 5,000 euros of this is subsidized by a BAFA grant, the eligible expenditure is only 55,000 euros. Generally speaking, however, it is also possible to apply for a BAFA subsidy with the capital withdrawal.
Insurers must prepare for increased demand
Applications for capital withdrawal can be submitted to the ZfA as of 1 January 2024. In addition to traditional applications by letter and fax, online applications will also be accepted. PDF templates will be provided on the website for both the applicant themselves and the specialist companies carrying out the work.
In view of potential future legislation on the one hand and the general increase in energy costs on the other, it is expected that there will be increased interest in construction measures at home. If the legislator now creates additional incentives to use existing Riester contracts for financing, insurers will have to be prepared for a sharp increase in inquiries about these home improvement housing capital withdrawals. This requires stable and possibly new processes in the handling of these applications.
The attractiveness of Riester contracts could increase
With the possible withdrawal of capital for energy-related renovation measures from Riester contracts, the legislator is responding to the financial burdens that will be placed on house or apartment owners in the coming years. The measure may possibly make Riester contracts, for which haven't been popular in recent years, somewhat more attractive again. However, it remains to be seen how the process will be put into practice. For insurance companies, the measure means a further increase in the complexity of Riester contract admin. In view of the fact that further procedural changes in the Riester process are coming in the future, using standard software for Riester contract admin, such as in|sure GovInterface certainly makes financial sense.