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Energy renovations: Help to finance them requested

Energy renovations: Help to finance them requested

The climate issue is a concern for which all countries have a responsibility.
In order to achieve the objectives set, some countries have imposed standards that will be implemented in the coming years.

• ENERGY PERFORMANCE DIAGNOSIS (EPD): In France, from 2025 onwards
Explanations on the EPD (1): The Climate and Resilience Act imposes a new type of diagnosis: the EPD (Energy Performance Diagnosis). However, this EPD now takes into account the level of CO₂ released by real estate: level of insulation of a housing, but also the heating system ... Exit the oil and gas boilers, for lack of decommissioning. The State favours heat pumps for houses and buildings with collective heating, and electric for apartments with individual heating. If you do not start the work, the State will consider that your property emits too much CO₂ and it will be qualified as “indecent”, and therefore downgraded.

According to the UNPI (Union nationale des Propriétaires Immobiliers, “as of January 1, 2025, 203,200 dwellings occupied as principal residences (by the owner-occupier or lessor) will be downgraded and exit the market (for rental). Because many owners of which you may be part have neither the means for carrying out the work, nor the capacity to organize the work for lack of materials.”

As it will be extremely difficult financially for an owner to assume such modifications and renovations, aid is requested. Among other things, the UNPI asks that “energy renovation work undertaken by rental property owners, occupants and lessors be fully tax deductible, either under the IR (impôt sur le revenu) or under the property deficit.”

These renovation aids will also help landlords because all work is deferred on the rent of the tenants. Because, as in Quebec, the landlord passes the work on to the current rent price.

• HALF A MILLION DWELLINGS BY 2026: Spain has budgeted €6.8 billion from the EU’s Next Generation fund.
With a housing stock built in the 1950s, and with small renovations done since, the buildings now need major renovations to satisfy a healthy “green” market.
The Spanish Government has proposed to renovate more than half a million housings by 2026, out of a total of 25 million, in addition to non-residential buildings.

To do this, Spain has budgeted 6.8 billion euros from the Next Generation Fund of the European Union on condition of: reducing dependence on non-renewable energy sources, or good waste management.

• GRANTS AND LOANS: Several options in Germany
Germany also wants to enable its population to reduce its energy consumption. The war in Ukraine has highlighted a dependence on natural gas and a need to be more self-reliant.

With this in mind, Germany offers loans and grants depending on the work carried out.

According to the European Consumer Centre, “the public bank KfW can, for instance, grant up to €75,000 in subsidies. Either in the form of a repayment of part of the sums advanced, or by the partial repayment of the credit subscribed to.”
The achievement of set energy targets will have to be proven to obtain this aid.

The Federal Office for Economic Affairs and Export Control (BAFA) offers targeted subsidies. For instance, to change the windows of a dwelling, 20% of the expenses can be refunded.
Or a tax deduction of up to €40,000 over three years. It is enough simply to prove the completion of work and the improvement of the energy performance of the housing, when filing the income tax return.

The introduction of new credits or subsidies must be examined, but their application and verification must also be carried out, so that the whole of society benefits.

In Italy, the Government had set up several programmes with deductions ranging from 50% to 90% and a programme called “Superbonus 110%” (2). The latter allowed for certain renovations (thermal insulation interventions affecting the building envelope with an incidence greater than 25% of the surface, interventions for the replacement of winter airconditioning systems) and under certain conditions to obtain 110% of the amount of work carried out.

This programme (3) however was also one of the most important frauds in Italy: “This method would have seduced all types of fraudsters, from small crooks to the Italian mafia itself, according to the Italian anti-mafia prosecutor. 4.4 billion euros of transactions are now considered suspicious. Local authorities have been reacting since the autumn of 2021 to stop this unsavoury gold rush.”

The energy transition is now underway in many countries. New standards must be handled, new targets must be achieved...! But a major study must be done first in order to see how to help the population to reach these objectives and goals.
Inflation or material costs are serious obstacles to carrying out this work.

Offering grants and tax credits however is a great way to stimulate a country’s economy!

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Québec Landlords Association

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