Rent control and the "buyer pays" principle – the new year brings several changes regarding real estate

Rental law reform 2015

In the real estate sector, 2015 brought a few innovations that could have a rather unfavorable impact on real estate buyers, owners, and landlords.

With the stated goal of ensuring continued affordable rents, the governing parties are pursuing a reform of tenancy law. A key component is the so-called rent control, which is intended to relieve the burden on those seeking housing in metropolitan areas.

“Rent control”

Accordingly, the rent for re-letting may only be a maximum of ten percent above the local comparative rent. Landlords can therefore no longer set the rent relatively freely for new tenancies, as was previously common practice. New buildings are exempt from this regulation, which is limited to five years.

The amendment to the law has not yet been finalized, but according to information from the press offices of the Bundestag and Bundestag, the new regulations are expected to come into force soon.

“Bestellerprinzip”

This also applies to the "besteller principle," which has been under discussion for some time and is to be introduced as part of the rent control measures. As the name suggests, in the future the person who commissions the real estate agent will pay for it. In most cases, this is the property owner.

Previously, it was customary for the tenant to pay the real estate agent's commission, usually two months' rent.

The states see room for improvement. For example, there is currently no regulation regarding rent increases after the modernization of housing. Furthermore, landlords should be obligated to repay excessive rents, if necessary, from the very beginning of the tenancy.

6.5 percent real estate transfer tax in Saarland

Since the German states have been allowed to set their own rates of real estate transfer tax, this tax has increased in all states except Bavaria and Saxony. In Saarland, the real estate transfer tax will increase by one percentage point to 6.5 percent starting in January 2015. Therefore, when purchasing a property for €300,000, €19,500 must be paid to the tax authorities.