The proposed reform of the Heating Law aims to introduce a “cost brake” for tenants, mandating that landlords must take on a portion of heating costs under certain circumstances. According to Justice Minister Stefanie Hubig, while landlords will retain freedom of choice when installing new heating systems, if an owner chooses a system reliant on fossil fuels, they must now share the associated operating costs. Specifically, landlords would be required to bear half the costs for network fees, the CO2 price, and the expenses related to bio-fuels. Hubig stated that those who make decisions regarding the heating system must also bear its economic consequences.
Furthermore, when existing residential buildings switch from oil or gas heating, a four-stage “Bio-Staircase” is planned to be implemented starting in 2029. This gradual measure mandates increasing the required blending with bio-methane, bio-oil, biogas, or hydrogen. For the initial three stages, the costs associated with bio-fuels will be shared equally between the tenant and the landlord. This regulation will apply to buildings that first become usable for occupancy by the end of 2029.
To ensure accurate calculation of the required proportion of bio-fuels, the law also stipulates a reliable information obligation for suppliers regarding their customers. This measure aims to prevent the cross-subsidization of bio-fuels and guarantee that the share attributed to the landlord is correctly calculated. As of 2028, the accumulated costs for carbon dioxide and gas network fees are slated to be split equally between the tenant and the landlord.
For tenants in non-residential buildings, the measure guarantees protection at a “comparable level”. The government plans to develop a practical regulation during the parliamentary process that acknowledges the varied conditions of non-residential properties and establishes an operable distinction between fuel consumption for residential use and commercial use.
Regarding new constructions, apartments that filed their building permits prior to the Cabinet meeting will benefit from grandfathering rights. The reformed rules themselves are scheduled to be evaluated for their distribution impact in 2036.
The provisions also address specific mitigation cases. Tenants who are self-sufficient-for instance, those living in single-family homes or using gas floor heaters-will be entitled to reimbursement from the landlord for the cost-bearing duties the landlord should cover. Finally, a hardship clause is also slated for development during the legislative process, intended for unmodernized buildings that exhibit low rents relative to the local average.