Rent determination & rent cap
Determining the right rent level requires a sure instinct – especially in Berlin, where the topic of rent is politically explosive. Landlords should take
Berlin and the rent cap – what was, what is?
The Berlin “rent cap” (MietenWoG Bln) came into force in February 2020 and froze rents for around 1.5 million apartments at the level of June 2019. Rents above specified upper values even had to be lowered, and violations were threatened with high fines of up to €500,000. The law was legally controversial from the outset, and in April 2021, the Federal Constitutional Court overturned the Berlin rent cap as unconstitutional because the state lacked the legislative authority. Since then, Berlin landlords have been allowed to freely agree rents again within the framework of national laws.
The rent freeze remains in force
Like almost all major cities, Berlin has designated areas with a tight housing market and thus activated the rent freeze. It was
The following exceptions apply: New buildings (first occupancy from 2014) and extensively modernized apartments are exempt from the brake. In addition, a surcharge may be justified under certain circumstances for furnished apartments or temporary rental agreements.
Tip: Landlords should refer to the current rent index table and document how the rent demanded is derived from it. Tenants have the right to complain about overpaid rent at a later date and, if necessary, to reduce it retroactively if the brake has been ignored.
Rent determination requires analysis: consider market comparison, furnishings and legal requirements to determine a fair and profitable rent.
Determining the optimum rent – 5 tips for landlords:
- Determine the market value of the property: Use the sales value and comparable properties in the area as a guide. High purchase prices indicate a high rent level.
- Monitor local rental prices: Analyze current asking rents of comparable apartments. Pay attention to trends – are rents currently rising sharply or are they stagnating?
- Price in amenities and location: A high-quality renovated apartment in a top location can fetch more than the average. Factors such as balcony, fitted kitchen, energy efficiency or view justify premiums or discounts.
- Check legal requirements: Find out about local rent restrictions. In Berlin, pay particular attention to the rent cap and rent index values. The rent cap is no longer in force, but the cap on existing rents (max. 15% increase in 3 years) still applies.
- Consider the scope for rent increases: Do not set the initial rent unrealistically high – vacancies cost money. It is better to plan for moderate graduated rents or index-linked rents so that you can increase them later within the framework of the law if the price level rises.
Fair rent – good for tenants and landlords
Ultimately, the rent level should be fair to both sides. Excessive demands deter good applicants and may be legally contestable (rent control). Rents that are too low, on the other hand, reduce your return on investment and may not appeal to a desired clientele (e.g. tenants with long-term financial strength).
Calculate all costs (loans, maintenance, reserves, taxes, insurance, etc.) and your desired return. From the landlord’s point of view, the rent must cover these expenses and ideally generate a surplus, but without far exceeding the local comparative rent.
Berlin-specificinformation
In Berlin, the comparative rent is based on rent index categories (year of construction, furnishings, residential area). For example, if your apartment is in a good residential area and has recently undergone energy-efficient renovation, you can apply a surcharge to the basic rent index value.
A sample calculation from the rent index 2023: For a 60 m² apartment built in 1990 in a medium location (basis e.g. €9.50/m²), a surcharge of e.g. €1.40 for a good location and €1.60 for modern thermal insulation can be added – this results in ~€12.50/m² or a basic rent of around €750.
However, such overestimates must always be permissible within the scope of the rent freeze. The Berlin rent index contains ranges within which increases and reductions can be argued. Document your derivation so that you can explain the rent calculation in a comprehensible manner in the event of queries.
Conclusion: Rent setting requires careful consideration of market data, the legal framework and individual property considerations. Landlords in Berlin should keep an eye on the rent freeze in particular, especially as it applies until at least the end of 2025. As the federal government is planning to extend this regulation nationwide until 2029, the issue remains topical.
Are you unsure how much rent you can charge? Contact us – we at ADEN Immobilien will help you find an attractive and legally compliant rent for your Berlin property.
Frequently asked questions about rent determination & rent caps
No. It was declared null and void by the Federal Constitutional Court in 2021. The nationwide rent freeze applies again.
It limits the rent for re-letting to 10 % above the local comparative rent according to the rent index – exceptions are possible.
Use the official Berlin rent index or get professional help to determine the rent.
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