Heating grants 2026: why landlords get only a third and owner-occupiers up to 80 percent

The short answer

When replacing a heating system, a landlord gets only the base grant of 30 percent. The two big top-ups — the climate speed bonus of 16 percent and the income bonus of up to 40 percent — apply solely to the owner-occupied flat. The frequently cited “up to 70 percent” is therefore the exception for owner-occupiers on a low income, not the rule for owners of rented flats.

What a kilowatt-hour of heat costs afterwards is covered in the guide to heating costs per kilowatt-hour. This article is about who gets back how much of the installation.

Who gets which funding rate?

The heating grant has run through the KfW since 2024, for private individuals under programme 458. It consists of a base grant and several bonuses that add up (status of the KfW product conditions: October 2026):

Component	Rate	For whom
Base grant	30 %	all owners, including landlords
Climate speed bonus	16 %	owner-occupied flat only
Income bonus	up to 40 %	owner-occupiers only, income limit
Maximum rate	up to 80 % (otherwise 70 %)	owner-occupiers

For landlords the table ends at the first row: 30 percent. For owner-occupiers the components can be stacked, capped at 80 percent of the eligible costs for the lowest income group, otherwise as a rule at 70 percent.

Eligible are not the full costs but maximum amounts per residential unit: 28,000 euros for the first, 15,000 euros each for the second to sixth, 8,000 euros each from the seventh unit. From 1 February 2027 the amount for the first unit falls by 750 euros every six months. A GbR or any other legal entity does not apply under programme 458 but under programme 459; usufructuaries are excluded.

Why the bonuses hinge on owner-occupation

The climate speed bonus rewards the swift replacement of a functioning old heating system — an oil, coal, gas room, or night-storage heater, or a gas or biomass heater at least 20 years old. It currently stands at 16 percent, falls by 4 percentage points every six months from 1 February 2027, and ceases for applications from 1 August 2028. The bonus is available only for the owner-occupied main or sole residence.

The income bonus is graduated by taxable household income: 40 percent up to 30,000 euros, 30 percent up to 40,000 euros, 10 percent up to 50,000 euros. With a child entitled to child benefit the limits rise by 10,000 euros each. This bonus, too, requires owner-occupation.

Both target the same person: the owner who lives in the house and budgets tightly. The landlord, who resells the heat, is not meant — the legislator refers them to the rent instead.

What is left for the landlord? A worked example

Assumptions: a multi-family house with 12 flats, 900 m² of living space, a central heating replacement costing 90,000 euros gross (a freely chosen figure).

Eligible maximum costs: 28,000 (first unit) + 5 × 15,000 (second to sixth) + 6 × 8,000 (from the seventh) = 151,000 euros. The 90,000 euros therefore sit entirely within the ceiling.

	Landlord (MFH)	Owner-occupier (SFH, income ≤ 30,000 €)
Investment (assumption)	90,000 €	28,000 €
Funding rates	30 %	30 + 16 + 40 %, capped at 80 %
Grant	27,000 €	22,400 €
Own share	63,000 €	5,600 €

The difference is the heart of the reform: the same heating replacement costs the low-income owner-occupier 20 percent of the eligible sum and the landlord 70 percent. Anyone who lets a property and still budgets with “up to 70 percent funding” is out by a factor of two.

How much of it may go onto the rent?

The landlord can pass part of the costs on through a modernisation rent increase, but with two brakes. First: under § 559a BGB, grants from public funds do not count towards the costs incurred — the 27,000 euros of KfW funding are therefore deducted before the calculation. That leaves 63,000 euros.

Second, § 559 BGB limits the pass-through to 8 percent of those costs per year. For heating systems there is an additional cap: no more than 0.50 euros per square metre of living space over six years (§ 559 para. 3a sentence 3).

In the example: 8 percent of 63,000 euros is 5,040 euros a year, that is 420 euros a month, or around 0.47 euros per square metre — just below the cap. Without funding it would be 8 percent of 90,000 euros, that is 600 euros a month or around 0.67 euros per square metre; then the 0.50-euro limit would bite and leave part of it with the landlord. The funding therefore not only lowers the own share, it keeps the pass-through below the cap in the first place.

KfW or BAFA — who funds what?

The new heat generator — a heat pump, biomass, or a connection to a heat network — runs through the KfW (programme 458). The building envelope, the building services other than heating, and heating optimisation, by contrast, are funded by the BAFA at 15 percent, plus 5 percentage points where an individual renovation roadmap (iSFP bonus) exists. Anyone planning insulation and heating at the same time therefore files two applications with two bodies. The BAFA measures have their own maximum costs: 30,000 euros per residential unit, double that with an iSFP.

A note on reliability: the funding depends on the available budget, and there is no legal entitlement. Before any application, check the current conditions directly with the KfW.

What landlords and owner-occupiers should do now

1. Before the investment calculation, establish whether funding applies as a landlord (30 percent) or as an owner-occupier (up to 80 percent). The own share follows from that, not from the headline figure of “70 percent”.
2. As an owner-occupier, check whether the climate speed bonus still applies — it falls every six months from February 2027 and ends in August 2028.
3. Hold the taxable household income against the limits (30,000 / 40,000 / 50,000 euros, plus 10,000 per child) before budgeting with the income bonus.
4. File the application before awarding the contract, and observe the eligible maximum costs per residential unit, not the total sum.
5. As a landlord, calculate the modernisation rent increase with the funding deducted (§ 559a) and the 0.50-euro cap for heating systems before counting on rental income.
6. Apply for insulation and heating separately — heating with the KfW, envelope and optimisation with the BAFA — and take the iSFP bonus along.