Law & Politics
Federal Election & Real Estate
Federal Election 2013: Parties discover housing policy
Rising rents in Berlin made housing policy a top issue in the 2013 federal election. From rent caps to construction incentives, we break down the party platforms for property owners.
Peter Guthmann
Housing policy had been a niche topic in Germany for years. That changed abruptly in 2013. Rising rents and purchase prices in Berlin and other major cities forced the parties to stake out new positions ahead of the federal election. For owners and investors in apartments in Berlin, a close look at the party platforms was well worth the effort.
First interventions already in place
Policymakers acted before the election. In December 2012, the Bundestag passed a cap limiting rent increases for existing tenancies to 15 percent over three years. In Berlin, several boroughs had already imposed a ban on converting rental apartments into holiday lets.
Rent cap: almost everyone in favor, only the FDP opposed
The CDU, SPD and Greens agreed on one point: when re-letting existing apartments, the rent should not exceed the local reference rent by more than ten percent. The difference lay in the details. The CDU wanted to offer this as an option to the federal states, while the SPD and Greens demanded a mandatory rule. The FDP rejected the intervention outright, warning it would discourage new construction. All proponents agreed that newly built apartments should be exempt.
For landlords in fast-moving locations such as Mitte or Neukoelln, such a cap would have had a direct impact on expected returns.
New construction incentives and tax breaks
As a counterpart to regulation, the parties discussed incentives for new housing. The CDU and FDP proposed reintroducing accelerated depreciation for rental housing construction, meaning higher tax deductions in the early years. The SPD and Greens focused more on supporting municipal and cooperative housing companies and reforming social housing.
More issues with consequences for owners
Beyond the rent debate, several other items were on the agenda. The SPD, Greens and Left Party called for the "Bestellerprinzip" for broker fees: whoever commissions the broker should pay. The Greens wanted to reduce the modernization surcharge from eleven to nine percent. And the Left Party went furthest, demanding the abolition of tax-free property sales after ten years. Anyone investing in Berlin as a buy-to-let investor needed to follow this discussion closely.