On 27 May 2026, the Federal Cabinet adopted the draft of an act to modernise German urban planning and spatial planning law. Under current planning, the act is to enter into force on 1 January 2027 — but the draft still has to pass through the parliamentary process and may change further during the legislative procedure.
For owners, investors and developers in Berlin, it is already worth a look: the planned reform would digitalise and accelerate planning procedures, give housing construction greater legal weight in strained markets, provide selective relief for owner-occupiers in Milieuschutz areas, and give municipalities more leverage against derelict properties.
The key points in brief
Four thrusts shape the draft: faster and more transparent urban land-use planning through digitalisation, a strengthened public interest in housing construction in certain areas, possible relief for owner-occupiers in social preservation areas (soziale Erhaltungsgebiete), and sharper municipal rights of first refusal.
If the draft is implemented as envisaged, market participants would face not only new obligations but also additional opportunities for realisation — above all for housing-related projects, restructuring of existing stock, and schemes that have so far been stuck in sluggish planning procedures.
Faster urban land-use planning through digitalisation
A central element of the draft is the standardisation of data exchange via the XPlanung standard for planning documents, preparatory land-use plans and binding land-use plans. Public notices are also to be issued increasingly in digital form in future.
On public participation, the draft provides for early participation to become optional only, and for repeat participation to be limited to exceptional cases. In addition, municipalities are to make the status of proceedings transparent, for example via a so-called procedural traffic light (Verfahrensampel).
This would be of practical relevance to everyone who depends on reliable planning status — from densification through changes of use to conventional new-build schemes in plan-dependent locations.
Housing construction as a weighty concern
The planned upgrading of housing construction is notable: in areas covered by a binding land-use plan with a strained housing market that designate residential building land, residential development is to count as an overriding public interest under the draft.
That would shift the balancing of interests under planning law without suspending it — housing-related concerns could in future prevail more easily over concerns of equal or lower rank, provided the rule becomes law as planned.
For the Berlin market, where densification and conversion have been central themes for years, this would be an additional argument in favour of housing-related projects.
Milieuschutz: possible relief for owner-occupiers
Under the draft, § 172 (4) sentence 3 no. 1 c) BauGB is to be amended so that owner-occupiers acquire an entitlement to approval of structural alterations under certain conditions.
This relief would be tied to conditions: more extensive structural measures could not be passed on to tenants without restriction in the event of subsequent letting, and the merging or division of apartments is, as the draft currently stands, to remain excluded.
For buy-to-let investors, this does not mean a general loosening of Milieuschutz, but a targeted privileging of owner-occupiers — a distinction that should be taken into account when assessing acquisition strategies in preservation areas.
New § 28a BauGB: right of first refusal in share deals
A central element of the reform concerns securing municipal rights of first refusal. Plots that are particularly significant for urban land-use planning and urban development are frequently disposed of not through a conventional sale but through the transfer of company shares by way of a share deal. Under the law as it currently stands, the municipal right of first refusal does not apply to this structure.
The newly introduced § 28a BauGB is intended to close this gap. In future, municipalities are to be able to exercise their right of first refusal in share deal structures as well, where the transferred plots are relevant to urban development. For transaction structures that have so far been deliberately designed to circumvent the right of first refusal, the legal starting position would change fundamentally.
For owners and buyers of plots held through corporate vehicles, this means: from now on, transaction planning should take into account whether and to what extent a municipal right of first refusal could apply under the new rule. Existing acquisition structures should be reviewed on this question at an early stage.
Easier right of first refusal for neglected properties
In addition, the application of the municipal right of first refusal to severely neglected properties is to be made easier outside share deal constellations as well.
For investors this means two things: problematic holdings can become riskier in regulatory terms, while municipalities can intervene earlier and more effectively in certain constellations. Anyone preparing transactions should therefore examine even more closely in future whether the condition of the property, the area designation and the acquisition structure are likely to give rise to conflict
Practical conclusion
The bill is still going through the legislative process (BMWSB legislative procedure – draft act to modernise urban planning and spatial planning law – BMWSB). Details may still change before final adoption. Anyone developing, holding or investing in Berlin should nevertheless factor the planned changes into project appraisals now — particularly for densification, housing-related schemes, mixed-use holdings and properties in preservation or problem areas.
Disclaimer
This article is for general information only and does not constitute tax or legal advice. The content does not replace individual consultation with a tax advisor or attorney. No liability is assumed for accuracy or completeness.
