Renting in Germany: Here’s what to know about changes in 2020

Renting in Germany: Here's what to know about changes in 2020
A man walking in Berlin. Photo: DPA
Rocketing rent costs are a big concern to many living in or planning to move to Germany. But there are some changes that could help ease the situation.

The cost of housing in Germany is in the spotlight as renters grapple with rising prices and a lack of new affordable homes.

So will there be any relief in 2020? From tighter rent controls to housing benefit boosts, these are the important changes and developments to know about.

READ ALSO: Everything that changes in Germany in 2020

Rent brake being tightened and extended

The so-called Mietpreisbremse or ‘rental price brake' is supposed to stop landlords in areas with strained housing markets from increasing rents by more than 10 percent than the local benchmark average when renting out to a new tenant.

In June 2015, Berlin became the first German state to implement the new regulation, and now there are a total of about 300 cities. There are, however, times when a landlord is exempt from the regulations, such as in the case of a new tenant moving in after extensive modernization or if previous tenants already paid in excess of the local rent average.

This year the law is being tightened and extended. In future, tenants who are paying more than they should will be able to claim back the overpaid rent retroactively, up to a period of 30 months. The prerequisite is that the tenant has notified the breach within this period after the start of the rental contract.

In fact, the rent brake, or the possibility for the federal states to impose one, is meant to expire at the end of 2020. However, the regulation has been extended until the end of 2025.

READ ALSO: Munich no longer most expensive city for renting in Germany

Berlin rent cap

Recently, we explained how a massive 1,749 flat-hunters queued outside to visit a reasonably-priced vacant Berlin apartment 12 hours after it was advertised online, a sign of the city's problematic housing situation.

But could that all be about to change? Well, city bosses hope so.

The controversial “rent cap” (Mietendeckel), which is due to be approved in the next month or two, is set to implement a five-year rent increase freeze in the capital.

It will mean around 1.5 million homes will have their rents frozen and capped at €9.80 for Kaltmiete (cold rent, or costs before utilities) per square meter.

The draft law states that landlords cannot charge rents higher than what the previous tenant paid and, if their rent is above the limit set out in a rent table (which depends on the age of the building and other factors) tenants can even apply to have it lowered.

Exceptions include social housing, owner-occupied flats, flats in halls of residence and apartments built since January 2014.

After the law gets the green light it will then be applied retroactively from June 18th, 2019, which means that any recent rental increases may be deemed as not valid.

READ ALSO: What you need to know about tax changes in Germany in 2020

Crack down on excessively high rents

A protest against high rents in Hamburg in 2019. Photo: DPA

Further plans are being put forward from German states in a bid to stop tenants being faced with extremely high rental costs.

In response to drafts submitted by the states of Bavaria and Schleswig-Holstein, the Bundesrat has put together bills aimed at strengthening the Economic Criminal Code and increasing the fines for those caught exploiting tenants.

These measures will be introduced into the Bundestag for debate.

Restrictions on converting rented apartments to private flats

Another draft law for the preservation of affordable rental housing is being put forward by the city states of Hamburg, Bremen and Berlin.

They want to abolish a loophole in the Planning and Building Law, which says the conversion of rented apartments into private homes is only possible if the apartments are sold to tenants during the first seven years of them living there.

In practice, however, the applicant states argue, tenants are not able to afford to the buy the apartments during those seven years. Therefore, the owners allow the period for tenants to buy the home to expire, and then they will be able to offer the home on the market.

That means that new owners then often take back the flat, declaring their own interests (Eigenbedarf) or increase rents after modernization. The bill was presented in the Bundesrat and will be discussed in the relevant committees.

Boost to housing benefit

People on low incomes have received an increase in housing benefit (Wohngeld), a state subsidy intended to ensure tenants can afford suitable housing.

READ ALSO: The big changes in Germany to expect in 2020

From January 1st, housing benefits increased by an average of about 30 percent. A two-person household, for example, now receives €190 per month instead of the previous €145.

In addition, as a result of the 2020 housing subsidy reform, around 180,000 more households are entitled to the subsidy than before.

From 2022, the housing allowance will then be regularly adjusted every two years to reflect current rent and income trends.

In 2021, the German government is also planning a further housing benefit increase, which will relieve low-income households of heating costs. They are set to rise as a result of the CO2 price increase under the climate protection programme.

Generally, in order to qualify for housing benefit, you cannot be receiving any other benefit payments, such as unemployment allowance.

Good-to-know for renters

When you're searching for a flat in Germany, you might find that landlords want to see a Schufa credit check – even during the apartment viewing. But fear not, it's fairly easy to obtain. Read our guide on how to obtain a Schufa here.

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