What conditions must be met in order to claim the tax reduction?

Requirements for tax reduction for energy-efficient measures under § 35c EStG

To claim the tax reduction for energy-efficient measures under § 35c EStG, certain conditions must be met:

• Owner-occupation of the property: The property must be used for own residential purposes or provided free of charge to other persons.
• Location of the property: The residential building must be located in Germany or within the EU or EEA.
• Age of the property: At the start of the energy-efficient measure, the residential building or flat must be at least 10 years old.
• Certificate according to the Energy Saving Ordinance (EnEV): A certificate according to § 21 EnEV from a specialist company or energy consultant must be available. This certificate is generally issued for the owner(s) of the property.
• Invoice with correct details: You must have received an invoice containing the following details:
  • The eligible energy-efficient measures.
  • The labour of the specialist company.
  • The address of the eligible property.
• Payment to the service provider's account: Payment must be made cashless to the service provider's account. Cash payments, cash deposits, partial cash payments or cash cheques are not eligible.

Special features and notes

• Instalment payments: The Federal Fiscal Court has ruled that the tax reduction for energy-efficient measures can only be granted once the installation has been completed and the invoice amount has been fully paid into the installation company's account (BFH ruling of 13.08.2024, IX R 31/23).
• Full payment of the invoice: The measure is only considered complete when the invoice is fully paid. Partial payments are not sufficient to claim the reduction in the respective tax year.
• Combination with other tax reductions: If the tax reduction under § 35a para. 3 EStG (craftsman services) is claimed for the labour costs of an energy-efficient measure, additional funding under § 35c EStG is excluded.

Practical example

A couple had a new boiler installed in 2021. The total costs amounted to 8.000 Euro. The couple paid 200 Euro monthly in instalments. In 2021, only 2.000 Euro were paid. The tax office rejected the tax reduction because full payment would not be made until 2024. The tax reduction for energy-efficient measures can only be claimed with the final payment.

Conclusion

To receive the tax reduction under § 35c EStG, you must ensure that the invoice is fully paid and that all formal requirements, such as the issuance of a certificate and correct invoicing, are met. Make sure no cash payments are made, and plan the payment in the respective tax year accordingly to claim the reduction promptly.