Germany's Heating Law 2026: What the GModG Really Changes for Landlords and Businesses

The short answer

The heating law argued about for years no longer exists in its old form. Since 29 July 2026 the Building Modernisation Act (GModG) has applied; it has replaced the Buildings Energy Act (GEG) and scrapped the central flashpoint – the duty to run every new heating system on 65 per cent renewable energy. For landlords and businesses that means no forced replacement and no rigid technology mandate. But a set of duties remains, and the real steering now runs through the CO₂ price rather than the ban.

Anyone who boils the situation down to "the 65 per cent is gone" overlooks the duties that stayed – and the cost line that keeps rising. This guide explains what now applies to rented residential and to commercial buildings.

What has the GModG removed in law?

Three things that unsettled owners most. First, the 65 per cent renewable duty for new heating. Second, the age-based replacement duty for constant-temperature boilers after 30 years of operation. Third, the full operating ban on oil and gas boilers from 2045. The latter two stood in §§ 71 to 73 of the old law; in the GModG these sections are expressly marked "(lapsed)".

In their place comes § 42 GModG: for a heating replacement in an existing building, ten equally valid options are available – from heat pumps through a heat-network connection and biomass to the still-permitted gas or oil heating. A working system may keep running and be repaired, regardless of its year of installation. For projects whose building application, notification or construction start fell before 29 July 2026, the old law still applies under the transitional rules – to be checked case by case.

Which duties remain for landlords and businesses?

This is the part that gets lost in the debate. The GModG scrapped bans but kept inspection and optimisation duties – and those hit larger properties in particular.

Duty	Legal basis	Who is affected
Heating inspection and optimisation	§ 60b GModG	water-based heating in buildings of six flats / usage units or more
Hydraulic balancing after installation	§ 60c GModG	same building size, after every heating installation
Bio staircase for new gas/oil heating	§ 43 GModG	new installation after 29 July 2026

The heating inspection is due by 30 September 2027 for systems installed before 1 October 2009; for newer systems within one year after 15 years of operation. Optimisation measures must follow within one year of the inspection. For landlords of apartment buildings and for businesses with larger commercial premises, this is not a formality but a documented duty with a deadline.

What applies if you still install a new gas or oil heating system?

You may – but with a condition that bites from 2029. § 43 GModG requires gas, oil and LPG heating installed into an existing building after 29 July 2026 to use a growing share of climate-friendly fuels:

From	Minimum share of climate-friendly fuel
1 January 2029	10 %
1 January 2030	15 %
1 January 2035	30 %
1 January 2040	60 %

For landlords this is a cost trap with advance notice: biomethane and bio heating oil are more expensive today than the fossil option, and who bears the surcharge must be settled in the tenancy. In heat contracting, the operator assumes compliance with the bio staircase (§ 43(6)) – one reason landlords examine switching to commercial heat supply (see the guide on heat contracting and § 556c BGB).

What does the decision not to act cost?

Worked example, freely chosen property size: an apartment building with 12 flats, 900 m², gas heating with roughly 120,000 kWh of heat demand a year. The emission factor for natural gas is about 0.182 kg CO₂ per kilowatt hour (EBeV 2030, gross calorific billing basis).

Item	Value (as of 25 Oct 2026)
Heat demand	120,000 kWh/year
CO₂ volume	≈ 21.8 tonnes
CO₂ price 2026 (corridor, § 10 BEHG)	55 to 65 € per tonne
CO₂ cost per year	≈ 1,200 to 1,420 €

This is the sum the legislator no longer bans but prices – roughly 1,200 to 1,420 euros for the CO₂ share alone, year after year at the same consumption, with a rising corridor and, from 2028, under the European emissions trading scheme ETS 2 (what that could cost). In a rented residential building, part of it stays with the owner under the tiered model; how much is shown in the guide on CO₂ cost allocation 2027. What a kilowatt hour of heat costs overall by generator is in the full-cost comparison.

Does municipal heat planning force a replacement?

No. Heat planning continues – municipalities above 100,000 inhabitants were to present their plan by 30 June 2026, smaller ones by 30 June 2028 (§ 4 Heat Planning Act). But the former link, under which a published plan triggered a replacement deadline, has gone. The plan is information, not an order: it shows whether a heat network is coming to your area. What owners with gas heating should decide once the plan is in is covered in the dedicated guide on municipal heat planning; for oil heating, see here.

What landlords and businesses should do now

1. Check the replacement pressure, don't fear it: You do not have to replace a working system. The pressure comes from the CO₂ price, no longer from the law – which allows planning rather than panic.
2. Schedule inspection and balancing duties: From six flats or usage units, plan the heating inspection under § 60b (pre-2009 systems by 30 Sept 2027) and document the hydraulic balancing under § 60c after every installation.
3. Install new gas/oil only with eyes open: From 2029 the bio staircase under § 43 applies. Settle in the contract beforehand who bears the extra cost of the bio share.
4. Quantify the CO₂ burden: Calculate the annual CO₂ share of your fossil heat and, for a rented property, place your tier under the Carbon Dioxide Cost Allocation Act.
5. Read your municipality's heat plan: It forces nothing, but shows whether a network connection is the calmer alternative to a single replacement.
6. Calculate full cost, not purchase price: Compare alternatives over the expected remaining service life before you invest – the purchase price is only the smaller part of the decision.