EH55: New construction funding is returning

The popular new construction subsidy is coming back: Starting in mid-December, the federal government plans to once again subsidize energy-efficient houses with the EH55 standard.

Our EUR 800 million Does the federal government want to build Energy-efficient houses according to Standard EH55 The subsidy will be reinstated. It could be implemented as early as mid-December. These buildings consume only 55 percent of the energy compared to a conventional house, hence the EH55 designation. In 2022, the governing coalition discontinued this subsidy and only supported the significantly stricter Energy Efficiency House 40 standard. 

Therefore, this is good news not only for families, but also for the entire construction industry. Felix Pakleppa, Chief Executive Officer Central Association of the German Construction IndustryThe program is described as "a good complement to the construction accelerator, which certainly simplifies planning – but first, people need to find the courage to build. The announced funding will be crucial in this regard. Those wishing to build need an attractive interest rate that encourages investment."

More than 120.000 of the approximately 300.000 unbuilt new apartments in the backlog were planned under more attractive financing conditions and are no longer economically viable. Subsidies could bring these projects back within reach for developers, according to Pakleppa.

Reallocate unused funding

For the housing market, making the program permanent would be extremely important. "To avoid a surge in demand and an abrupt halt to funding, the federal government should do everything in its power to increase KfW resources. The reconciliation meetings next week offer an opportunity to reallocate unused funds for an even greater boost to the housing market. A lot is at stake."

Many homeowners across the country could greatly benefit from the EH55-Plus program with its renewable heating systems. The construction industry argues that the program should apply not only to projects already approved, but also to future projects. "This would appeal to a broader range of prospective homeowners and could herald a real turnaround in the housing market. While the market has recently shown initial signs of improvement, the real challenges remain: increased construction costs, high interest rates, and bureaucracy. What's needed now are more prospective homeowners and more permits, achieved through reliable investment incentives for affordable housing."

"We need to build, build, and build some more – excessive regulations regarding subsidies won't help," says Bavaria's Construction Minister Christian Bernreiter. The 800 million euros are a good start to revitalize housing construction. "This also fulfills the coalition agreement."

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