Germany Proposes New Rental Regulations

Landlords in Germany must soon prove the cost of furniture in fully furnished apartments does not exceed 10% of the base rent. New regulations will also require tenants to provide a valid reason for short-term rentals. The Justice Minister is also targeting index-linked rents, proposing that rent increases cannot rise indefinitely if inflation exceeds 3%. The German cabinet has approved a draft law aimed at regulating furnished apartment rentals and index leases. Federal Justice Minister Stephanie Hubeich introduced the proposal to limit the discretion landlords currently have in charging high rents for furnished units. Under the new rules, owners must provide proof of the specific additional costs charged for furniture. The legislation must still pass through the Bundestag. The Ministry of Justice has proposed that rent increases for furnished apartments be capped at a maximum of 10% above base rents. Under the proposal, fixed-term leases would only be exempt from rent control if they last no longer than six months and are for specific reasons like internships or short professional projects. The German government is considering a plan that involves a 215 million euro entry investment alongside a net reduction of 1.8 billion euros in non-insurance benefits. The finance minister reportedly pushed the measure through despite criticism regarding the scale of the cuts. The proposal aims to address various social benefit structures through these adjustments.