Replacing oil heating: support in 2026–2027 and alternatives

A detached house can no longer get a state grant for replacing oil heating: applications for the ELY Centre’s grant closed on 25.5.2026, and the processing of applications has ended. The most important support now is the increased household expenses credit (kotitalousvähennys): 60 per cent of the labour share of the replacement, at most €3,500 per person per year, until the end of 2027. A couple can get up to €7,000 a year in total. In this article we go through what support is available for the replacement in 2026 and 2027, the conditions for the increased credit and which heating is worth choosing instead of oil.

Is there a grant for replacing oil heating in 2026 or 2027?

There is no direct grant for a detached house, but there is a tax credit. The situation at a glance:

Support	For whom	How much	Status
Increased household expenses credit	owners of a detached or semi-detached house who remove the oil heating entirely	60 % of the labour share, at most €3,500 per person per year	valid until the end of 2027 (Finnish Tax Administration)
Household expenses credit	for example if the oil boiler stays alongside a heat pump	40 % of the labour share, at most €2,100 per person per year	2026–2027 (Finnish Tax Administration)
ELY Centre grant for giving up oil heating	owners of small houses	was €4,000 or €2,500	applications closed on 25.5.2026
Varke's energy grant	housing companies, not detached houses	50 % of the costs of giving up oil, at most €4,000 per apartment	open for applications from 28.9.2026

No new ELY round has been decided: in the autumn of 2026 the grant page of the Centre for Economic Development and Vitality (elinvoimakeskus) mentions no new application round, including for 2027. The ELY grant was at most €4,000 when oil was replaced with district heating, ground source heat or an air-to-water heat pump, and €2,500 for other solutions. Under decisions already made, the renovation had to be completed by 31.8.2026 and payment applied for by 30.9.2026. We have gathered all the support options for a detached house in the article energy grants for a detached house.

The increased household expenses credit: conditions

The conditions for the increased credit are precise in the Tax Administration’s guidance, and it is worth knowing them before asking for quotes.

The oil heating is removed entirely. According to the Tax Administration’s guidance, giving up oil heating means that the oil boiler, burner, tank and pipes of the oil heating system are removed and a replacement heating system is installed in its place. Exceptions are cases where the environmental protection authority has granted an exemption from the obligation to remove the oil tank, or where the tank cannot be removed without demolishing the building’s load-bearing structures.
The replacement is a non-fossil heating system. According to the guidance, such systems include, among others, ground source heat, air-to-water heat, district heating, wood-based heating such as pellet heating, electric heating, the combination of air source heat pumps and electric heating, and solutions that combine several forms of heating. The new system must not use fossil fuel such as oil, coal, natural gas or peat. Converting the oil heating to run on bio fuel oil or biogas does not count as giving up oil heating either.
The oil boiler must not stay alongside. If, for example, an air-to-water heat pump is installed and the oil heating is kept as a parallel system, this is not giving up oil heating. In that case you get the ordinary household expenses credit, at most €2,100.
The credit is calculated only on labour. Equipment and materials do not qualify, so ask for an invoice where the labour share is itemised. With ground source heat, drilling work also qualifies when it is invoiced as part of the labour share. You get the full €3,500 credit when the labour share on the invoice is €6,083.34.
The credit is granted for the year of payment. The household expenses credit is calendar-year based: it is calculated for the year in which the invoice is paid. The increased credit covers the years 2022–2027, so the invoices for the replacement must be paid in 2027 at the latest.
A state grant rules out the credit. If a state grant has been received for giving up oil heating, no household expenses credit can be claimed for the same renovation at all.

Spouses can each get their own maximum, €7,000 in total, but the deductible is personal: splitting costs the second €150 deductible. Rule of thumb: split the credit only if one claimant’s credit would exceed the €3,500 maximum.

Example: how much is the credit in euros?

The credit is always calculated on the actual, itemised labour share of the invoice. In this example the labour share is our own assumption:

Example renovation	Labour share	Credit for one claimant	Credit for a couple
Oil heating replaced with ground source heat, contract €20,000	about 50 %, i.e. €10,000	€3,500 (the maximum is reached)	€5,700 (€5,000 each)
The same renovation, but the oil boiler stays alongside	about 50 %, i.e. €10,000	€2,100	€3,700

The difference is €1,400 for one claimant and €2,000 for a couple – so removing the oil boiler also pays off in terms of tax.

What heating instead of oil?

Motiva’s 2024 example calculation shows the scale of the alternatives. The example is a small 1990s detached house, with prices from March 2024 and an electricity price of 16 cents per kilowatt hour:

Option	Investment	Heating costs €/year
Starting point: oil boiler	–	€3,050
Ground source heat	€23,000	€910
Air-to-water heat pump	€17,000	€1,240
District heating	€13,000 (connection example only)	€1,840

The investments for ground source heat and the air-to-water heat pump include removing the oil heating. In Motiva’s example ground source heat paid for itself in about nine years when the increased household expenses credit for two people was included; in a larger 1970s house the investment was €26,000 and the payback about 7 years. Motiva’s payback times for the air-to-water heat pump and district heating included the ELY grant that has since ended, so we do not present them. Our own rough calculation without support (the investment divided by the annual saving) gives them about 9 and 11 years.

Ground source heat cuts heating costs the most, and the pump’s service life is about 20 years. The investment is the largest, and a ground source heat borehole always requires a permit, so check the permit with your municipality’s building control. More on the support in the article ground source heat grants.
An air-to-water heat pump is cheaper to buy than ground source heat because it does not need a ground loop, but it gives less free energy over a year and its service life is often about 15 years. An oil-heated house’s water radiator system suits a heat pump, but a high supply water temperature weakens its efficiency – read whether an air-to-water heat pump suits a radiator system.
District heating is an option if the network runs near the plot. The connection is the smallest of the investments, but the annual heating costs are higher than with heat pumps.

For the household expenses credit, wood-based heating such as pellets and electric heating also qualify as the replacement system. For the climate the change is a big one: according to Motiva, giving up oil or gas heating is one of the most important things a household can do to reduce its climate impact. We cover the order of renovations for the whole house in the article energy renovation.

What does the replacement do to the energy certificate?

The E-value of the energy certificate is calculated from purchased energy weighted by the energy carrier factor: for fossil fuels the factor is 1.00, for electricity 1.20 and for district heating 0.50. A heat pump takes most of the heat from the ground or the outdoor air, so the electricity bought is only a fraction of the energy of the oil, and the E-value falls. In many houses changing the heating system can raise the energy class by one or two steps. The improvement shows officially only in a new energy certificate, and the energy class must be stated in a sales advertisement.

Frequently asked questions

Will there be a new grant for replacing oil heating in 2027?

There is no decision. The ELY Centre’s applications closed on 25.5.2026, and the Centre for Economic Development and Vitality mentions no new application round. In 2027 the increased household expenses credit is in force: 60 per cent of the labour share and at most €3,500 per person.

Do you get the increased credit if the oil boiler stays as a backup?

No. The increased credit requires the oil heating to be removed entirely. If the boiler stays as a parallel heating system, you get the ordinary household expenses credit for the work, at most €2,100 per person per year.

Does the oil tank have to be removed?

Yes. According to the Tax Administration’s guidance, the oil tank is removed as well as the boiler, the burner and the pipes. An exception is possible if the environmental protection authority has granted an exemption from the obligation to remove the tank, or if the tank cannot be removed without demolishing the building’s load-bearing structures.

Can you get both a grant and the credit for the same renovation?

No. If a state grant has been received for giving up oil heating, no household expenses credit can be claimed for the same renovation at all.

Can a housing company get support for replacing oil heating?

Yes. Varke’s energy grant covers 50 per cent of the approved costs of giving up oil or gas heating, at most €4,000 per apartment. The condition is that the building’s E-value improves by at least 28 per cent in a small or terraced house and 23 per cent in a block of flats. We have gathered the conditions and stages in the article Varke’s energy grant 2026–2027.

How to get started

A good replacement starts from the starting point: what the house consumes, what its radiator system is like and which option suits the plot. First check whether your house has a valid certificate – with our energy certificate check tool – and if needed order a new energy certificate, whose recommendations show the effect of the replacement. When you want a calculation for your own house, send a request for a quote or first take a look at our services.

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