How heating costs are allocated
If a building has central heating or district heating, the landlord allocates the heating costs to the flats under the German Heating Costs Ordinance (Heizkostenverordnung, HeizkostenV). One part follows each flat's metered consumption, the rest follows the area.
The area part is called base costs. It covers what every flat causes regardless of its own heating: heat lost through pipes and walls and the system's standby. The consumption part is called consumption costs and rewards economical heating.
The ordinance takes precedence over conflicting terms in the tenancy agreement (§ 2 HeizkostenV). Even if the agreement says "heating costs by area", consumption-based allocation applies to centrally heated buildings. Exception: a building with no more than two flats, one of which the landlord lives in.
70/30 or 50/50: the consumption ratio
At least 50 % and at most 70 % of the heating costs are allocated by consumption (§ 7(1) HeizkostenV), the rest by living or usable area or by enclosed volume. The same range applies to hot water (§ 8(1)).
70 % by consumption is mandatory when all three conditions are met:
- The building does not meet the requirements of the Thermal Insulation Ordinance of 16 Aug 1994, so it is not well insulated.
- It is heated with an oil or gas system.
- The exposed pipes of the heat distribution are mostly insulated.
The owner sets the ratio before a billing period starts. They may only change it in three cases and only for future periods (§ 6(4)). Choosing a ratio retroactively because it would be cheaper is not allowed.
Formula and worked example
Share = costs × (100 % − ratio) × flat area ÷ building area + costs × ratio × flat units ÷ building units
- Building's heating costs: €10,000, consumption ratio 70 %.
- Base costs: 30 % of €10,000 = €3,000. The flat has 75 of 600 m², so €3,000 × 75 ÷ 600 = €375.00.
- Consumption costs: 70 % of €10,000 = €7,000. The flat has 1,800 of 12,000 units, so €7,000 × 1,800 ÷ 12,000 = €1,050.00.
- Flat's share: €375.00 + €1,050.00 = €1,425.00. At 50/50 it would be €625.00 + €750.00 = €1,375.00.
Consumption units are weighted units: the metering service converts each heat cost allocator's reading with a factor for the radiator. You therefore cannot simply add up raw readings from different devices.
Separating hot water under § 9 HeizkostenV
If the same system produces heating and hot water, the costs are first incurred jointly. Before allocating, separate the hot water share. Heating gets the rest (§ 9(1)).
A heat meter measures the heat for hot water. Only if that is unreasonably costly does the formula Q = 2.5 × hot water volume in m³ × (temperature − 10 °C) apply. If neither heat nor hot water volume can be measured, use 32 kWh per m² of supplied living area. Adjust a Q calculated by formula or flat rate: × 1.11 for natural gas billed on gross calorific value, ÷ 1.15 for district heating or contracting, × 0.3 for a monovalent heat pump (§ 9(2) sentence 6). A heat quantity measured with the heat meter stays unchanged.
The former flat rate of 18 % for hot water was abolished on 1 Jan 2009. Anyone still using it calculates under a version that no longer applies.
- Gas example: 150,000 kWh gross calorific value, 180 m³ hot water at 60 °C, joint costs €12,000.
- Q = 2.5 × 180 × (60 − 10) = 22,500 kWh, with factor 1.11 = 24,975 kWh.
- Hot water share: 24,975 ÷ 150,000 = 16.65 %, so €1,998.00 for hot water and €10,002.00 for heating.
Fallback calorific values
| Fuel | Calorific value |
|---|---|
| Heating oil EL | 10 kWh per litre |
| Natural gas H | 10 kWh per m³ |
| Natural gas L | 9 kWh per m³ |
| Liquefied gas | 13 kWh per kg |
| Wood pellets | 5 kWh per kg |
If consumption is stated in litres, m³ or kg, convert the heat into fuel using the calorific value: fuel quantity = Q ÷ calorific value.
Which costs count as heating costs
Since 2023 there is a step before that: deduct the landlord's share of the CO2 costs from the heating costs before allocating (§ 7(1) CO2KostAufG). So the order is: total costs, minus the landlord's CO2 share, separate hot water, then allocate heating and hot water.
- Fuel including delivery; for district heating, the heat price.
- Operating power for the heating, operation, maintenance, testing and adjustment of the system.
- Cleaning of the system and the boiler room, emission measurements under the Federal Immission Control Act.
- Rent or instalment purchase of meters and allocators, calibration, metering service costs and monthly consumption information.
The tenant's reduction rights
Since 1 Dec 2021, newly installed meters and heat cost allocators must be remotely readable. Older devices must be retrofitted or replaced by 31 Dec 2026. Anyone with remotely readable devices must send tenants consumption information every month (§ 6a).
Reduction rights are the tenant's rights. Whether several reductions add up is not conclusively settled in law. They do not apply between a flat owner and the owners' association.
- 15 %: if billing is not consumption-based although the ordinance requires it, the tenant may reduce their share by 15 % (§ 12(1) sentence 1).
- 3 %: if devices are not remotely readable although they must be (installed from 1 Dec 2021, older devices after 31 Dec 2026), or the tenant gets no monthly consumption information despite remotely readable devices, they may reduce by 3 % (§ 12(1) sentences 2, 3).
- 3 % for CO2 costs: if the statement lacks the split of the CO2 costs, the tenant may reduce their share of the heating costs by 3 % (§ 7(4) CO2KostAufG).
Special cases: meter failure, vacancy, change of tenant
- Meter failure: if a meter fails, consumption is estimated. If the estimate affects more than 25 % of the area, the costs are allocated by area only (§ 9a(2)).
- Vacancy: an unheated flat with 0 units only pays its base costs. The landlord bears them when the flat is vacant.
- Change of tenant during the year: an interim reading is taken or the costs are split by degree days (§ 9b). The calculator does not cover this case.
- Exceptions: buildings with very low heat demand (under 15 kWh per m² per year), care homes, student halls and a few other cases do not have to meter consumption (§ 11).
Common mistakes in heating cost allocation
- Using a ratio outside 50 to 70 % or changing the ratio retroactively.
- Separating hot water with a flat 18 %, although that rule has not applied since 2009.
- Mixing gross calorific kWh for gas with net calorific figures.
- Deducting the landlord's CO2 share only after allocation, or forgetting it altogether.
- Adding up raw readings from different heat cost allocators instead of using the metering service's weighted units.
- Using the H-gas value of 10 kWh for natural gas in m³ although L-gas with about 9 kWh per m³ is supplied.