The non-profit German Homeowners Association has sharply criticised the cuts to the Federal Funding for Efficient Buildings programme (BEG) taking effect on 21 July 2026. Although the reform contains some welcome improvements, the cuts as a whole weaken the willingness of homeowners and flat owners to invest. This comes precisely when Germany is still falling well short of its climate targets in the building sector.
Far-reaching changes overnight
The German Homeowners Association is particularly critical of the process: in practice, just one day separated the announcement of the new funding conditions and the temporary suspension of applications. Despite already having renovation plans under way, many owners were unable to use the previous terms because the KfW application portal was overloaded for days.
“One day’s notice for consequences amounting to tens of thousands of euros is not a funding procedure; it is a mockery of consumers who trusted in government support,” explains Peter Wegner, President of the German Homeowners Association. “Anyone expected to make investments of this magnitude needs reliable conditions, not funding terms that in practice change substantially overnight.”
This funding is being withdrawn
Wegner specifically criticises the current reduction in the BEG’s maximum eligible amount for replacing a heating system and its gradual reduction in future, while the “climate speed bonus” is to be phased out completely by 2028. The previous “efficiency bonus” and “emissions reduction supplement” are also being abolished without replacement. In the association’s view, withdrawing the “iSFP bonus” for smaller individual measures below the new investment threshold particularly affects owners who can afford only a gradual renovation.
By contrast, association president Wegner welcomes the newly introduced family supplement, which provides targeted relief for families with children who are minors. The additional support for buildings in particular need of renovation (“Worst Performing Buildings”) is also sensible. The association calls for the planned funding thresholds to be lowered significantly so that a meaningful proportion of the older building stock can actually benefit.
Private owners benefit less often than large companies
The association also expressly welcomes the greater consideration given to embodied energy – the energy and CO2 emissions arising from the production, transport and disposal of building materials – through the new sustainability class, as well as the expanded funding for serial renovations. At the same time, it warns that private owners have so far benefited from these funding approaches much less often than large housing companies.
Create incentives instead of removing them
The German Homeowners Association calls on the federal government not to leave people alone with the generational task of the “energy transition in owner-occupied property”, and to scale back funding programmes only once the climate targets have actually been achieved. Constant changes to the funding landscape unsettle owners and make private investment more difficult. Where funding conditions need to be adjusted, appropriate transition periods and effective protection of legitimate expectations are required for people already engaged in specific renovation planning. “Funding policy must provide reliability, enable investment and create incentives instead of removing them,” Peter Wegner concludes.