Tenancy law reform 2015: Maas plans to extend rent index period to ten years

Just months after introducing the rent brake, Federal Justice Minister Heiko Maas has proposed a new tenancy law package. The two central points: the calculation period for the local reference rent would be extended from four to ten years, and the modernisation surcharge would be further restricted.

Rent index period: from four to ten years

Currently, only tenancy agreements from the last four years feed into the calculation of the local reference rent. Maas wants to extend this to ten years. For a market like Berlin, where rents have risen sharply in recent years, the consequences would be concrete: older, cheaper contracts would pull the reference rent down. In boroughs such as Neukoelln or Friedrichshain-Kreuzberg, where prices have moved significantly since 2010, the rent index would increasingly diverge from market reality.

Modernisation surcharge under pressure

The second intervention targets the ability to pass modernisation costs through to rent. A reduction would lower the financial incentive for energy refurbishments or improvements to housing quality. For private owners who use property as retirement provision, the calculation would become tighter.

Criticism of the plans

The market is pushing back. Key concerns:

With a longer calculation period, maintenance and modernisation would be deferred because they become less economical. Developers could withdraw from rental housing construction, worsening the housing shortage. The value of residential property could decline as income potential is curtailed.

Starting point: an already regulated market

The proposals land on a market already regulated by the rent brake and the rent increase cap. For property owners in Berlin, each additional layer of regulation narrows the margin further. The industry view is clear: these plans would threaten both new construction and the quality of existing housing stock.