On Wednesday, the Federal Cabinet approved a draft bill designed to curb excessive rent surcharges in furnished apartments and reduce costs for short‑term tenants.
If it becomes law, the bill would require any furniture surcharge to be listed separately from the base rent. It would also introduce new limits on short‑term leases and restrict rent increases linked to inflation.
The aim, according to Federal Justice Minister Stefanie Hubig (SPD), is to close “gaps in social rental law” that allow landlords to bypass existing tenant protections.
In future, there are to be “clear and transparent” rules on what is allowed for furnished apartments and short‑term rentals, helping to prevent the circumvention of rent caps.
Under the proposal, short‑term rental contracts would generally be limited to a maximum of six months. In certain cases, landlords could extend these agreements to up to eight months.
Crucially, short‑term rentals would only be permitted if the tenant has a specific, justified reason for needing temporary accommodation.
This is separate from fixed‑term leases based on clearly defined needs of the landlord, which remain subject to the current rent cap and are not affected by the reform.
New rules for furnished apartments
For furnished apartments in areas with tight housing markets, landlords would be required to itemise furniture surcharges separately. If they fail to do so, the apartment would legally be treated as unfurnished.
Even if landlords later provide proof, the apartment would still count as unfurnished for two years.
The furniture surcharge itself would be based on the current market value of the furnishings. The draft bill proposes a calculation method and allows landlords to charge a flat rate of up to ten percent of the net rent for fully furnished apartments.
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Higher surcharges would only be permitted in exceptional cases where the furniture is demonstrably more valuable.
The German Tenants’ Association (DMB) welcomed the proposal, arguing that furnished housing is often used to generate higher profits and sidestep tenant protections.
But its president, Melanie Weber‑Moritz, stressed the need for clear legal standards on how furniture values are assessed, as well as transparency about purchase costs and dates. The association called for the reform to be “consistently implemented and refined.”
The bill would also affect so‑called index‑linked rents, which rise in line with inflation. In tight housing markets, future increases would be capped: if inflation exceeds three percent per year, landlords would only be able to pass on half of that increase to tenants.
The goal, Hubig said, is to ensure that housing does not become a “cost trap” during periods of high inflation.
Further protections are planned for tenants facing eviction due to unpaid rent. In cases of late payment, tenants would be allowed to avert eviction once by paying the outstanding amount in full.
What are people saying about the bill?
The draft has already been softened since Hubig first presented it in February, after the CDU/CSU called for changes.
Reaching agreement within the coalition had been difficult, Hubig conceded, but she described the outcome as a “fair balance” between tenant protection and landlords’ legitimate interests.
Reaction from other parties has been mixed. The Greens called the reform a necessary first step but criticised the cap on index‑linked rents as overly complex.
The Left Party said the changes had been watered down under pressure from the real‑estate lobby and argued for a nationwide rent cap, including for existing leases.
READ ALSO: Could Berlin housing registry lead to clamp down on illegal rents in Germany?
Landlords’ association Haus & Grund, meanwhile, strongly opposed the plans, warning of an “expropriatory encroachment” on private retirement savings and accusing the government of stigmatizing small landlords.
The Tenants’ Association, by contrast, said the extended grace period on rent arrears was an important step toward preventing homelessness, although it criticised the fact that it can only be used once.
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