Law & Politics
Berlin housing market 2025
Berlin rent cap extended to 2029 (as of 2025)
Germany's rent cap has been extended by four years to 2029. The feared tightening did not materialise. What the decision means for landlords and investors in Berlin.
Peter Guthmann
Extension to 2029 confirmed
The coalition parties have agreed: the rent cap (Mietpreisbremse) will be extended by four years to the end of 2029. For property owners and investors in Berlin, the real news is what the bill does not contain. The previously discussed tightening of the rules has been dropped. The status quo remains.
What this means for Berlin
Berlin has been subject to the rent cap regulation since 2015. When re-letting existing apartments in Berlin, the rent may not exceed the local reference rent by more than 10 percent. The Berlin rent index remains the benchmark. The rule applies city wide but primarily affects high demand locations like Mitte and Friedrichshain-Kreuzberg.
The exemptions also remain in place: new developments and comprehensively modernised apartments continue to be excluded from the rent cap. The SPD's push to extend the regulation to apartments first let after 1 October 2014 did not succeed. This preserves the profitability of investment in new construction and energy retrofitting.
A political compromise
The agreement is the outcome of a debate between two positions: tenant protection on one side, investment incentives on the other. Some politicians view the rent cap as a tool against displacement. Industry associations and investors warn that overly strict caps reduce new construction and modernisation activity, tightening supply further.
The extension without tightening attempts to accommodate both sides. Whether this balance holds in the long run will depend on how the market develops.
Furnished rentals: next round of regulation
Even without a major reform, working groups in the justice and building ministries are drafting new rules for furnished rentals. In future, landlords will have to disclose and justify the furnishing surcharge separately in the lease. The aim is to make it transparent whether the underlying cold rent complies with the rent cap. This should make it harder to circumvent the cap through flat rate furnishing surcharges.
Owners active in this segment should monitor the development. The debate around more effective prosecution of excessive rents also remains on the political agenda.