Letting a flat in Germany and Berlin: the key rules for 2026
German tenancy law strongly protects tenants – especially in cities with a tight housing market such as Berlin. Anyone buying a flat as an investment should know the rules on rent levels, rent increases and termination before doing the calculations.
Rent cap for new lettings
In areas with a tight housing market, the rent at the start of a new tenancy may not exceed the local comparative rent by more than 10 % (§ 556d BGB). The Bundestag has extended the authorisation until 31 December 2029; Berlin has issued a new Rent Limitation Ordinance (Mietenbegrenzungsverordnung), which applies to the entire city from 1 January 2026 to 31 December 2029.
Exceptions apply, among others, to flats first used and let after 1 October 2014, to the first letting after comprehensive modernisation (§ 556f BGB) and where the previous rent was higher (§ 556e BGB). The landlord must inform the tenant of an exception before the contract is concluded.
Rent increases, rent index and capping limit
During an ongoing tenancy, the landlord can request consent to an increase up to the local comparative rent, effective at the earliest 15 months after moving in or after the last increase (§ 558 BGB). Within three years, the rent may rise by no more than 20 %, and in Berlin, under the Capping Limit Ordinance (Kappungsgrenzen-Verordnung), by no more than 15 % (valid until 10 May 2028). Increases due to modernisation or operating costs are not counted.
In Berlin, the basis is the 2026 rent index (Mietspiegel); the average local comparative rent (ortsübliche Vergleichsmiete) in it is 7.71 € per m² net cold (2024: 7.21 €). Asking rents are considerably higher – but the comparative rent also includes existing rents.
Protection against termination
A residential tenancy of indefinite duration can only be terminated by the landlord if there is a legitimate interest, for example owner's own need (Eigenbedarf) or a serious breach of duty (§ 573 BGB). Termination in order to increase the rent is excluded.
If a let flat is converted into a freehold flat after being made available to the tenant and is then sold, the buyer can only claim owner's own need (Eigenbedarf) after a blocking period has expired (§ 577a BGB). In Berlin, due to the Termination Protection Clause Ordinance (Kündigungsschutzklausel-Verordnung), this period is ten years throughout the city. Anyone buying a let flat for their own use should check this carefully.
Conversion ban and milieu protection
On the basis of § 250 BauGB, Berlin has issued a new conversion ordinance (Umwandlungsverordnung), which came into force on 1 January 2026 and applies for five years: dividing rental buildings into freehold flats requires a permit. This has no direct effect on buyers of existing freehold flats, but it limits supply.
In social preservation areas (milieu protection (Milieuschutz), § 172 BauGB), structural changes that go beyond a contemporary standard require approval from the district – for example changes to the floor plan, combining flats or elaborate fittings. Check before buying whether the flat is located in such an area.
Furnished and fixed-term letting
The rent cap (Mietpreisbremse) also applies to furnished flats; a surcharge for furniture is permitted, but its amount has not yet been set by law. Living space let only for temporary use is exempt from parts of tenant protection (§ 549 (2) BGB) – the distinction is strict.
On 29 April 2026, the Federal Government adopted a government bill on tenancy law reform which provides, among other things, for a separately stated, capped furniture surcharge, a maximum duration for short-term lettings and limits on index-linked rents (Indexmieten). As at October 2026 it is not yet in force; the details may change during the legislative process.
In Berlin, short-term lettings to tourists are additionally subject to the ban on misuse of residential space (Zweckentfremdungsverbot).
Deposit
The rental deposit may not exceed three months' rent excluding advance payments for operating costs and may be paid by the tenant in three instalments (§ 551 BGB). The landlord must invest it separately from their own assets.
Sources
- https://www.gesetze-im-internet.de/bgb/__556d.html
- https://www.gesetze-im-internet.de/bgb/__556f.html
- https://www.haufe.de/immobilien/wirtschaft-politik/gesetzentwurf-mietpreisbremse-wird-nachgebessert_84342_472902.html
- https://www.haufe.de/immobilien/wirtschaft-politik/berlin-fuehrt-mietpreisbremse-zum-1-juni-ein_84342_302448.html
- https://www.gesetze-im-internet.de/bgb/__558.html
- https://bmgev.de/mieterecho/artikel/mieterhoehung-me457
- https://www.berliner-mieterverein.de/?p=95465
- https://www.gesetze-im-internet.de/bgb/__573.html
- https://www.gesetze-im-internet.de/bgb/__577a.html
- https://bmgev.de/verlaengerung-der-kuendigungssperrklausel-verordnung-bis-2033
- https://www.gesetze-im-internet.de/bbaug/__250.html
- https://www.berlin.de/rbmskzl/aktuelles/pressemitteilungen/2025/pressemitteilung.1615174.php
- https://www.gesetze-im-internet.de/bbaug/__172.html
- https://www.gesetze-im-internet.de/bgb/__549.html
- https://www.immowelt.de/ratgeber/mieten/mietrechtsreform-2026
- https://www.gesetze-im-internet.de/bgb/__551.html
- https://www.berlin.de/sen/wohnen/rechtliches/zweckentfremdungsverbot/
Frequently asked questions
How long does the rent cap apply in Berlin?
The current Berlin ordinance applies from 1 January 2026 to 31 December 2029.
As a buyer, can I terminate the tenancy on grounds of my own need?
In principle yes, if there is a legitimate owner's own need (Eigenbedarf). However, if the flat was converted into a freehold flat after the tenant moved in, a blocking period (Sperrfrist) of ten years from the first sale applies in Berlin.
Does the rent cap also apply to furnished flats?
Yes. A reasonable furniture surcharge is permitted; a statutory cap is planned but not yet in force (as at October 2026).
General information, as at October 2026. It does not replace advice from a tax adviser, solicitor or notary.
