Real Estate

What to look out for when buying an old building

Renovation of an old apartment
Renovation of an old apartmentdpa

High ceilings, stucco and solid wooden floorboards in every room: old houses have their very own charm. Many prospective buyers are specifically looking for old buildings. On the one hand, for aesthetic reasons, because the walls come closest to the personal ideas of the dream house. On the other hand, also for practical reasons. Because used properties are convenient: In contrast to new buildings, buyers save themselves tedious coordination with authorities, craftsmen and construction companies. In addition, old buildings are usually located in well-developed residential areas.

And they are cheap: Second-hand row houses cost an average of 15 percent less than new buildings in 2019, according to data from the Landesbausparkassen (LBS). Such a price difference can make the difference, especially for buyers who are struggling to scrape together the necessary equity.

Include follow-up costs

The crux of the matter: with old buildings, the purchase price alone is rarely enough. Because the older buildings are, the more there is often to be done – and the higher the follow-up costs. One of the largest cost blocks in old buildings is energy efficiency. The legislator obliges owners to bring their property up to date in terms of energy efficiency – this also applies to old buildings. According to the Energy Saving Ordinance (EnEV), the owner has two years after signing the purchase contract to fulfill this obligation. Otherwise, there is a risk of fines of up to 50,000 euros.

It is difficult to say which parts of the building buyers need to renovate and which not. The EnEv contains a large number of regulations and almost as many exceptions. The owner always has to replace the boiler, for example, if the nominal output is less than four or more than 400 kilowatts, if the heating runs on liquid or gaseous substances – or if it is simply more than 30 years old. “Because the obligation to exchange affects new systems every year, the age of the heating system is always an issue that should be discussed when there is a change of ownership,” explains Holger Freitag, lawyer of trust at the Association of Private Builders (VPB).

Owners must also retrofit if there is an unheated attic space above the heated rooms and the building does not meet the minimum thermal insulation requirements. In rooms without heating, owners must insulate all accessible, heat-carrying heating and water pipes and fittings.

Obtain an assessment from an expert

The EnEV has been in force since February 2002. However, anyone who believes that they are on the safe side with houses that are more recently built is often wrong. It is true that properties built in 2002 and later should always be energetically up to date. But the law provides for a special regulation for owner-occupied single and two-family houses. Their owners also have to modernize their properties, but not by a certain point in time. The result: Many property owners have only partially retrofitted their property, for example only replaced the outdated boilers because the chimney sweep was keeping an eye on them. “Buyers of older houses should therefore always ask specific questions,” recommends VPB expert Freitag: When did the seller acquire the property, before or after the deadline? Did you have to upgrade or not? And if so, have they actually performed their duties?

Anyone who buys an old building should hire an independent appraiser beforehand to help better estimate the follow-up costs. Depending on the age and condition of a property, buyers also have to budget up to 50 percent of the purchase price for modernization work. However, part of these costs can be repeated by the state. As part of its climate protection program, the federal government recently decided to provide special funding for energy-efficient renovation. Owners can claim 20 percent of the renovation costs for tax purposes over three years. A maximum of 40,000 euros can be deducted from the tax. The funding runs until December 31, 2029.

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