EU's New Energy Law: Millions of Homes in Spain Could Become Unsellable

Summary

In Spain, new energy performance certificate (EPC) regulations will soon make it illegal to sell or rent properties with a rating below E by 2030, and below D by 2033. This will affect over 20 million homes, especially older ones that require costly upgrades. Property owners need to plan now, while buyers can negotiate lower prices for non-compliant properties and take advantage of government grants for improvements. This video explains how EPC works, how to assess ratings, and how these changes will impact the property market, offering strategies for both buyers and sellers to benefit from the upcoming regulations.

Takeaways

• 😀 In just 5 years, properties in Spain with an energy rating below E will become illegal to sell or rent.
• 😀 By 2033, the minimum energy rating for properties will increase to a D, which will affect a large portion of Spain's property market.
• 😀 EPC (Energy Performance Certificate) ratings are given based on a property's energy efficiency and CO2 emissions, with A being the best and G being the worst.
• 😀 Over 85% of residential properties in Spain currently fall below the new minimum EPC standard, meaning significant upgrades will be needed for compliance.
• 😀 Properties built before 2000 are most likely to require costly upgrades to meet energy standards, which could run into tens of thousands of euros.
• 😀 Buyers should be cautious about EPC ratings when looking for properties, as many sellers and estate agents may not provide accurate information upfront.
• 😀 To get a rough estimate of a property's EPC rating, buyers can assess its construction features, insulation, and energy systems.
• 😀 Energy-saving improvements such as insulation, modern double glazing, heat pumps, and solar power can significantly improve a property's energy rating.
• 😀 The cost of upgrading a property to meet energy standards ranges from €5,000 for smaller improvements to €20,000 or more for deep retrofits.
• 😀 The Spanish government offers grants and subsidies that could cover up to 80% of the renovation costs for improving a property's energy efficiency.
• 😀 As the 2030 and 2033 deadlines approach, properties that do not meet the energy standards will become less attractive to buyers, creating opportunities for savvy buyers and sellers who act early.

Q & A

What is an EPC certificate and why is it important in Spain?

An EPC (Energy Performance Certificate) is issued by a professional surveyor who evaluates the energy efficiency of a property. It looks at both the energy coming into the property and the energy lost through inefficiencies. The certificate assigns a rating from A to G, with A being the most efficient and G being the least. The certificate is important because, from 2030, properties with a rating below E will be illegal to sell or rent in Spain.

What is the significance of the new Spanish law regarding EPC ratings?

The new law mandates that properties in Spain must have an EPC rating of at least E by 2030, and by 2033, the minimum rating will increase to D. This means properties with a rating below E will be banned from being sold or rented out, potentially leaving them 'frozen assets' if improvements are not made.

How can property buyers estimate the EPC rating of a property?

Buyers can estimate the EPC rating by considering factors like the property's age, construction materials, and any energy-efficient upgrades made. However, a professional survey is the only way to get an official rating. Some sellers and agents may also provide inaccurate information about a property's EPC rating.

What types of properties in Spain are most likely to need significant improvements to meet energy standards?

Properties built before 2000, especially those built during the boom years of the late 1990s and 2000s, are most likely to require significant improvements. These homes often lack insulation and may have outdated windows and air conditioning systems, which will need upgrading to meet the new standards.

What types of energy improvements are necessary to upgrade a property's EPC rating?

Key improvements include adding insulation to exterior walls, upgrading windows to modern double glazing, sealing drafts, and installing energy-efficient heating and cooling systems, such as heat pumps. Additionally, switching to solar energy can help lower CO2 emissions and reduce energy costs.

What are the costs associated with upgrading a property's energy efficiency?

The costs can vary widely. For properties close to compliance (e.g., from E to D or F to E), upgrades may cost under €5,000. However, for properties rated F or G, deeper renovations are needed, with costs ranging from €10,000 to €25,000, depending on the scale of the work.

Are there financial incentives for upgrading a property’s energy efficiency in Spain?

Yes, the Spanish government, supported by EU redevelopment funds, offers grants, subsidies, and tax breaks to reduce the financial burden of energy improvements. These funds can cover up to 80% of renovation costs, making it more affordable for homeowners to meet the new energy standards.

What impact will the new energy efficiency laws have on the Spanish property market?

Properties that do not meet the new energy standards will likely become less attractive to buyers, leading to potential discounts on sales prices. Conversely, properties that comply with the new standards, especially those meeting the 2033 requirements, will likely see increased demand and higher values, creating a potential opportunity for savvy sellers and buyers.

How can property owners in Spain take advantage of these new regulations?

Property owners can get ahead of the game by investing in energy efficiency improvements now, which will not only increase the property's value but may also make them eligible for grants and tax breaks. Early action could prevent potential losses from future price reductions and avoid the costs of last-minute upgrades.

What are the main risks for property owners who don’t act on these new energy efficiency regulations?

Property owners who do not upgrade their properties may face significant financial losses as their properties become unsellable or uninhabitable by 2030. They may also struggle to find financing, as banks could be hesitant to lend money for non-compliant properties, and their market value may drop as buyers avoid them.