Following the adoption of the European Union’s (EU) Energy Performance of Building Directive (the “Directive”), real estate investors are retaining legal counsel to deal with the implications, Bloomberg reports.
Under this new green EU legislation, member state countries will be required to implement legislation aimed at renovating energy-inefficient buildings, which will be at the cost of the property owners.
The aim is that the Directive “will contribute to the objective of reaching emission reductions of at least 60% in the building sector by 2030 compared to 2015 and achieving climate neutrality by 2050”. Eventually, all new buildings should be emissions-free by 2030.
For some investors, it will be an incredibly expensive ordeal to ensure their properties are in compliance with the Directive. It is estimated that renovation costs for inefficient buildings in the European Union may vary between €15,000 and €100,000, with large differences between different member states.
Moreover, the ING Bank found that among member states, there are also demographic discrepancies as to who owns property. It highlights Belgium, where 44% of property owners qualify as “low-income” owners. These owners often simply do not have the liquidity required to finance energy efficiency renovations.
However, the ING Bank article suggests that the financial sector is keen for the Directive to come into full effect in member states, as they expect they will finance much of the investments required for compliance with the Directive.
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