Renovating a house: the costs for 2026 at a glance

Refurbishing, renovating or modernising – what's the difference?

Refurbishing is all about looks: new floors, fresh paint, a renewed kitchen. Renovating, by contrast, removes real damage – damp basement walls, leaking roofs, decayed electrics. And modernising means raising the technical standard, for example with insulation, triple-glazed windows or a heat pump. Anyone who wants to bring an old house up to scratch usually combines all three levels. That is precisely why the total costs vary so much: a mere freshening up costs a few tens of thousands of euros, whereas a full renovation already approaches the price of a new build.

Renovate, or rather demolish and build new?

This is the central question before any major expenditure. A proven rule of thumb states: if the renovation costs exceed around 75 percent of the expenditure for a comparable new build, demolition followed by a new build is usually the more economical option. A turnkey prefabricated house costs around €2,400 to €2,900 per square metre in 2026, plus additional building costs and demolition (around €15,000 to €30,000). With a badly run-down old building, a full renovation can quickly exceed this threshold – and, in the end, still produce only an upgraded old building instead of a new build with full remaining service life.

In favour of a new build, besides the building fabric, is also the energy standard: a new Efficiency House easily achieves EH 55 or better, is eligible for funding and results in low operating costs over decades. The minimum energy requirements for existing buildings and new builds are laid down by the Building Energy Act (Gebäudeenergiegesetz, GEG). In favour of renovation are the familiar living environment, lower additional costs for site development and approval, and – with sound building fabric – a more favourable value for money. Calculate both routes thoroughly. Our cost calculator gives you the realistic new-build sum as a benchmark.

Renovation funding 2026 via KfW and BEG

Renovation is funded via the Federal Funding for Efficient Buildings (BEG). For individual measures on the building envelope – for example the insulation of roof, facade or basement as well as new windows – the BAFA pays a 15 percent subsidy, supplemented by a 5 percent iSFP bonus, provided an individual renovation roadmap is in place. For full renovation to an Efficiency House, the KfW offers subsidised loan 261 with a repayment grant of up to 45 percent. The heating swap – i.e. switching from oil or gas to a heat pump – is supported by the KfW with up to 70 percent subsidy (base funding as well as climate, income and efficiency bonuses). A compilation of all programmes can be found on our page grants at a glance.

Period property and older prefabricated house: what matters

Before renovating a period property, an examining look at structure, moisture and pollutants is advisable. Buildings up to the 1990s often contain asbestos in floor coverings and roof panels, artificial mineral fibres in the old insulation or outdated electrical installations without residual-current circuit breakers. All this drives up the costs and must be disposed of properly.

An old prefabricated building stock from the 1960s to 1980s – usually in timber panel or timber-frame construction – can be well retrofitted in energy terms, because the lightweight construction allows on-rafter or facing insulation. Here, watch specifically for formaldehyde from old chipboards as well as wood preservatives such as PCP or lindane. If the contamination turns out to be too high, a replacement new build may be the healthier and, in the long run, cheaper solution. These questions are clarified by an energy consultant in the individual renovation roadmap.