Prolongation of rental price ceiling
Germany Extends Rent Brake to 2029, Enhancing Tenant Protection
In a bid to safeguard tenants and ensure fairer housing conditions, the German federal government has decided to extend the rent brake until the end of 2029. The extension comes as part of a series of measures aiming to address the housing market's challenges.
Following the approval of a so-called "formulation aid" by the federal cabinet, the parliamentary groups of Union and SPD can now introduce the necessary legislation to make the extension a reality. Federal Justice Minister Stefanie Hubig, who is responsible for this matter, emphasized that housing should not become a luxury good.
The original rent brake, implemented in 2015, prevents rent increases from exceeding the local average by more than 10 percent for new lettings in tight housing markets. This cap is set to remain in place until the end of 2029. Without this extension, the rent brake would have expired in late 2025.
"We don't have time to lose here," said SPD politician Hubig, referring to the urgency of addressing the housing market's issues. "Tenants need protection, and they will get it. That's a matter of justice."
In addition to extending the rent brake, the government aims to create more transparency in ancillary costs, subject index rent contracts to stricter rules, and improve tenant protection for furnished apartments. The goal is to curb practices that allow landlords to demand higher rents by adding trivial items to apartments.
However, the rent brake remains a contentious issue. Critics argue that it has not prevented the strong price increase in metropolises, but has made new apartment construction less attractive. Despite this, the Ministry claims that the legal regulation has moderately slowed down the rent increase.
The proposed changes and measures also include harmonizations to tenancy law, regulation of furnished and short-term rentals, modernization levy reforms, tax reliefs for affordable rentals, increased investment in social housing, and a national rent monitoring system to ensure compliance with rent regulations. These measures aim to provide a comprehensive solution to the challenges faced in the housing market.
The extension of the rent brake in Germany's community policy and business regulation will last until 2029, aiming to enhance tenant protection and address housing market challenges. Although finance and politics play significant roles in this decision, the primary concern is ensuring fairer employment policies for the general-news public.
