May I use the subsidy for modernisation?
Last updated: · under the rules from 1 January 2027 · Publisher: INTERNA · responsible: Marc A. Schnitzler, in mortgage financing since 2005
Yes, you may use the subsidised balance of the home-ownership pension (Eigenheimrente) for two kinds of modernisation: energy-saving renovation, such as insulation, new windows or new heating, and removing barriers, such as a level-access shower or a stairlift. Under the new rules this is possible from 1 January 2028, from as little as €3,000, for the home you live in yourself. A new kitchen or a nicer bathroom alone does not count (§ 92a para. 1 sentence 1 no. 3 Income Tax Act).
What counts and what does not
| Project | Subsidy usable? |
|---|---|
| Insulation of walls, roof or ceilings between floors | yes, energy-saving renovation |
| New windows and external doors | yes, energy-saving renovation |
| New heating, or optimising heating that is more than two years old | yes, energy-saving renovation |
| Ventilation system, digital controls for lower energy use | yes, energy-saving renovation |
| Walk-in shower at floor level, wider doors, stairlift | yes, removing barriers |
| New kitchen | no |
| New bathroom without removing barriers | no |
| New roof without insulation | no |
The energy-saving measures are the same ones for which there is also a tax reduction under § 35c Income Tax Act. What is new: under the old rules, energy-saving renovation with the subsidised balance was not possible at all.
What you need for it
- A specialist firm does the work. For energy-saving renovation, the same technical requirements apply as for the tax reduction for energy-saving renovation. The specialist firm confirms this on the official form. For the firm this is routine, so it is best to mention it when you ask for a quote.
- For removing barriers, an expert confirms that the money was used for this. For a single measure, for example just the shower, confirmation from the tradesperson’s firm is enough. The technical minimum requirements are set by the Federal Building Ministry.
- At least €3,000. The former minimum of €6,000 or €20,000 no longer applies to withdrawals under the new rules.
- Your contract must provide for withdrawal. Your advisor checks this before you sign.
No second tax benefit for the same costs
Whatever you pay with the subsidised balance may not also be deducted from tax by you or by anyone who lives with you in the home. Excluded are, for example, the tax reduction for tradespeople’s services and the one for energy-saving renovation. You confirm this in writing or electronically. If you pay part of the work from your own money and want to deduct it from tax, clarify the split with your tax advisor before placing the order.
Example: €100 a month, four years
| in four years | |
|---|---|
| Your own contribution | €4,800 |
| Basic subsidy from the state | €1,560 |
| available for the renovation | €6,360 |
For an eligible person without children, calculated without interest and without contract costs. This can be enough, for example, for a level-access shower or part of new heating. With children, up to €300 a year per child is added. What you put into your home is taxed in old age, spread over the five years after the payouts from your contract start.
How much subsidy does your household get? The subsidy calculator works out in one minute how much subsidy you can get. An advisor then checks with you whether everything fits your situation. This conversation is free of charge and in English.
Calculate your subsidyFrequently asked questions
Can I use the Eigenheimrente for modernisation?
Yes, from 2028 for energy-saving renovation and for removing barriers, from €3,000, in the home you live in yourself. General modernisation such as a new kitchen does not count.
Does new heating count?
Yes. Replacing the heating is part of energy-saving renovation, as is optimising heating that is more than two years old. A specialist firm carries out the work and confirms on the official form that the technical requirements are met.
Does a new bathroom count?
Only if barriers are removed, for example with a level-access shower. A bathroom that only becomes nicer does not count.
Can I also deduct the costs from tax?
No, not for the costs you pay with the subsidised balance. There is no tax reduction for tradespeople’s services or energy-saving renovation for these, not even for people living with you. If you want to pay part from your own money and deduct it, clarify this beforehand with your tax advisor.
Read more
Sources
- Federal Ministry of Finance: questions and answers on the reform of private pensions (in German)
- Zentrale Zulagenstelle für Altersvermögen, the central subsidy office: how Wohn-Riester works (in German)
- Federal Law Gazette 2026 I No. 156: Altersvorsorgereformgesetz, the pension reform act (in German)
The money in the contract is meant for your retirement and your own home. If you have the subsidised savings paid out early, for example by cancelling the contract, you have to pay back the subsidies and tax benefits.
The examples explain the legal rules in simplified form. They do not replace tax or legal advice for your personal situation. Contract costs and interest are not included. This page was created with the help of artificial intelligence and translated from the German original. INTERNA is responsible for its content. More information