Germany To Impose Rent Cap On Residential Properties

By Fiona Moore, for 03 October, 2014

Germany's Federal Government has approved a draft law that aims to curb rising property rental costs in sought-after urban areas.

The law would cap rents at a maximum of 10 percent above the local area average. It also stipulates that estate agency charges must be borne by owners rather than tenants. The Government wants the law to come into force from next year and remain in place until 2020.

However, new builds and properties that are returning to the market after comprehensive modernization will be exempt from the restriction to encourage construction.

Heiko Maas, the Minister for Justice and Consumer Protection, explained that rents in some areas had risen by 30 to 40 percent and argued that this was "simply unacceptable." He said that the law will ensure that rents remain affordable for average earners. The Minister also rejected a claim by Germany's Real Estate Association that the move is unconstitutional.

Tags: Law | Legislation | Germany | Construction | Expats | Investment | Property Investment | Invest | Lifestyle | Investment | Lifestyle |


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