Building Modernisation Act:
Abolition of the heating law for landlords cancelled
On 25 February 2026, the Federal Government presented key points for a new Building Modernisation Act, which is to replace the previous Building Energy Act. The bill has not yet been introduced into the Bundestag, and a cabinet decision is currently scheduled for May 13, 2026.
According to current media reports, the coalition has now agreed on a so-called cost brake for tenants: In the future, landlords are to participate in follow-up costs such as CO₂ price, network fees and additional costs for biogenic fuels for new fossil heating systems. From the point of view of the German Real Estate Association IVD, the announced freedom of choice in the boiler room for landlords will thus de facto be cashed in.
IVD President Dirk Wohltorf explains:
“The so-called cost brake is in truth an investment brake and the next political blow against private landlords. Anyone who promises freedom in the boiler room and in the end claims landlords through the back door again is thwarting the announced restart of the heating law. Small private landlords in particular are being burdened again – even though they have long been involved in heating costs through the CO₂ Cost Sharing Act. Cost brakes do not reduce costs, they shift responsibility and create false incentives. In the end, the tenant regulates the heating through his personal heating behavior, in the worst case through the open window – and the landlord also pays.”
