Germany's Rent Cap Law Extended to 2029; New Heating Law to Shift Costs
Germany has extended its rent-cap regulation (Mietpreisbremse) through 2029, capping increases at 10% above local reference rent in tight housing markets. A new heating law coming this summer will require landlords to share rising fuel costs with tenants, reshaping rental expense calculations.
Rent Cap and Housing Market Controls
The federal government extended the rent cap (Mietpreisbremse) until 2029 to curb rent increases in 'tight housing markets' (angespannte Wohnungsmarktregionen). The Mietpreisbremse limits rent increases when re-letting a property; in areas officially recognized as having housing shortage, rent may not exceed more than 10% above the local reference rent (ortsübliche Vergleichsmiete).
According to the Federal Institute for Building, Urban Affairs and Spatial Research (BBSR), more than 50% of German municipalities will be classified as 'tight markets' by 2025, including major cities like Berlin, Munich, and Hamburg.
New Heating Law: Cost-Sharing Shift
The new Building Modernization Act (Gebäudemodernisierungsgesetz) is designed to come into effect before the summer recess of 2026 and aims to balance energy efficiency improvements with fairness for tenants and landlords. Unlike former regulations that pushed for rapid phase-out of fossil fuel heating systems, the modernized act permits continued installation of gas and oil heating systems, provided that landlords share the rising fuel costs with tenants, protecting renters from unexpected steep increases in heating expenses.
What this means for you: When apartment hunting in major cities, use the official Mietspiegel (rent index) to check if a new lease respects the 10% cap above reference rent—overcharges can be challenged. For existing and new tenants: the heating law arriving this summer means you'll see clearer cost-sharing with landlords starting autumn 2026. Review your lease now to understand current heating cost splits; landlords will likely adjust arrangements to comply with the new law. If renting in a Altbau (older building) facing heat pump conversion, expect initial increases as landlords can pass 8% of modernization costs annually onto tenants, but long-term energy bills should fall as efficiency improves.
Sources
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