Rent cap: extension until 2029 causes heated debate!

Rent cap: extension until 2029 causes heated debate!

On May 29, 2025, a decisive step was taken in Germany's housing policy. The black-red cabinet has passed a bill to extend the rent cap by four years until 2029. This step is particularly important as the rent control would have expired at the end of this year without the extension. rnd.de reports that the main goal of this regulation is to protect tenants in areas with tight housing markets from excessive rent increases.

As part of the rent cap, landlords are not allowed to set rents for new rentals by more than 10 percent above the local comparative rent. The decision as to whether and where the rent cap is applied is the responsibility of the federal states, which must provide appropriate justification. Currently, around 30 percent of Germans live in regions where rent controls apply.

Political approval and criticism

Federal Justice Minister Stefanie Hubig (SPD) emphasizes how important legal protection is for tenants, while resistance to the rent cap is being voiced from the real estate industry. Dirk Salewski, President of the BFW, describes the regulation as a failed housing policy and argues that it inhibits investments in climate protection and makes economic operations more difficult. This criticism is reinforced by the fact that the renewed dispute over rent controls between the coalition partners has delayed legislation.

The traffic light coalition had originally agreed on a longer extension until the end of 2029 in its coalition agreement, which underlines the importance of the current agreement even more. Justice Minister Marco Buschmann (FDP) introduced the draft law after initially refusing to extend it. tagesschau.de noted that this agreement between the coalition partners is a necessary but insufficient measure.

Future challenges

The new draft law also stipulates higher requirements for state governments to provide justifications if the rent cap is to be applied repeatedly. This is intended to ensure constitutional review of the extension. While the SPD and the Greens called for a stricter design of rental law, the ministry's draft does not provide for a tightening of the rent cap. This could lead to further discussions and adjustments in future housing policy.

In summary, it can be seen that the rent control remains a controversial but central element of German housing policy. The new draft law is both a response to the current market situation and a sign of political agreement, even if differences between those involved remain.