Letting a flat in Germany and Berlin: the most important rules in 2026

German tenancy law offers tenants strong protection – 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 their calculations.

Rent brake for new lettings

In areas with a tight housing market, the rent at the start of a new tenancy may exceed the local comparative rent (ortsübliche Vergleichsmiete) by no more than 10% (§ 556d BGB). The Bundestag has extended the authorisation until 31 December 2029; Berlin has issued a new rent restriction ordinance (Mietenbegrenzungsverordnung) that 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 to a higher previous rent (§ 556e BGB). The landlord must inform the tenant of an exception before the contract is concluded.

Rent increases, rent index and cap

During an existing tenancy, the landlord can request consent to an increase up to the local comparative rent, taking effect no earlier than 15 months after moving in or after the last increase (§ 558 BGB). Within three years, the rent may rise by no more than 20%; in Berlin, under the cap 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 in it is €7.71 per m² net of heating and service charges (2024: €7.21). Advertised rents are considerably higher – but the comparative rent also includes existing rents.

Protection against termination

An open-ended residential tenancy agreement can only be terminated by the landlord if there is a legitimate interest, for example personal use (Eigenbedarf) or a significant 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 it has been let to the tenant and is then sold, the purchaser can only claim personal use after a blocking period (Sperrfrist) has expired (§ 577a BGB). In Berlin, this period is ten years throughout the city under the termination protection clause ordinance (Kündigungsschutzklausel-Verordnung). Anyone buying a let flat for their own use should check this carefully.

Conversion ban and social preservation areas

On the basis of § 250 of the Federal Building Code (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 (Milieuschutz, § 172 BauGB), structural changes going beyond a contemporary standard require a permit from the district – for example changes to the floor plan, merging of flats or elaborate fittings. Before buying, check whether the flat is located in such an area.

Furnished and fixed-term letting

The rent brake also applies to furnished flats; a surcharge for furniture is permitted, but its amount has not yet been quantified by law. Residential space let only for temporary use is exempt from parts of tenant protection (§ 549(2) BGB) – the distinction is applied strictly.

On 29 April 2026, the Federal Government adopted a government draft for a tenancy law reform which provides, among other things, for a limited furnishing surcharge to be shown separately, a maximum duration for short-term lets and limits on index-linked rents (Indexmieten). As of October 2026, it has not yet come into force; the details may change during the legislative process.

In Berlin, short-term lets to tourists are additionally subject to the ban on misuse of residential space (Zweckentfremdungsverbot).

Deposit

The rental deposit (Mietsicherheit) may not exceed three months' rent excluding advance payments for operating costs and can 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 brake apply in Berlin?

The current Berlin ordinance applies from 1 January 2026 to 31 December 2029.

As a buyer, can I terminate the tenancy for personal use?

In principle yes, if there is a legitimate need for personal use. However, if the flat was converted into a freehold flat after the tenant moved in, a blocking period of ten years from the first sale applies in Berlin.

Does the rent brake also apply to furnished flats?

Yes. A reasonable furnishing surcharge is permitted; a statutory limit is planned but not yet in force (as of October 2026).

General information, as of October 2026. It does not replace advice from a tax adviser, a lawyer or a notary.