Law & Politics
Real estate law Berlin
Berlin rent cap: What applies for owners and landlords
The Senate has approved the rent cap. Rents for 1.5 million apartments are frozen for five years. Price ceilings, modernization rules and legal status at a glance.
Peter Guthmann
The Berlin Senate has approved the rent cap. The law freezes rents for around 1.5 million apartments completed before 2014 at their 18 June 2019 level for five years. New leases, graduated rents and index-linked rents are also affected. For owners and investors in apartments in Berlin, this raises concrete questions about profitability.
Price ceilings based on the 2013 rent index
The ceilings are not based on the 2019 rent index but on the 2013 version. Depending on construction year and amenities, the base values range from 5.95 to 9.80 EUR per sqm. Existing rents may exceed this by a maximum of 20 percent. If the current rent is higher, tenants can apply for a reduction nine months after the law takes effect. For new leases, the maximum is the ceiling itself (100% of the base value). Surcharges are available for good locations (+0.74 EUR per sqm) and modern amenities (+1.00 EUR per sqm); discounts apply for basic locations (-0.28 EUR per sqm). From 2022, rents may rise by 1.3 percent annually as an inflation adjustment, provided they remain below the ceiling.
Modernization: Severely restricted
Rent increases following modernization are only possible under strict conditions. Permitted measures are limited to accessibility improvements or energy-efficient renovations. The levy is capped at 1.00 EUR per sqm. Higher levies require the use of subsidy programs. For owners who want to increase their property's value through investment, this substantially reduces the financial incentive.
Constitutional doubts and a wave of lawsuits
Whether the rent cap will withstand legal scrutiny is disputed among lawyers. The CDU and FDP have announced a judicial review before the Federal Constitutional Court. Associations and private owners are also preparing lawsuits. The law must be followed despite the open constitutional question; there is no out-of-court appeals process. For landlords in boroughs like Neukoelln or Friedrichshain-Kreuzberg, this means a period of high uncertainty in which the market trajectory is hard to assess.