Rent cap extended: Protection against usury in Saxony until 2027!

Rent cap extended: Protection against usury in Saxony until 2027!

Rental prices in Saxony, especially in the large cities of Leipzig and Dresden, have been on a steep upward trend for years. In order to counteract the rising costs of housing, the Saxon state government has adjusted the cap limit. This was reduced from 20 to 15 percent and has been valid in Dresden since 2014 and in Leipzig from 2018. This regulation has now been extended by two years, until June 2027, to protect tenants in the region and protect them from dramatic rent increases. Without this measure, rents in existing tenancies would have increased by up to 20 percent from July 2023, reports MDR.

The cap means that rents in existing tenancies may increase by a maximum of 15 percent within three years. New rentals, on the other hand, are subject to the rent cap, which has been in force for Leipzig and Dresden since May 2022. This stipulates that the rent for new rentals may not be more than 10 percent above the local comparative rent, which is intended to be a significant relief for many tenants. However, if this regulation does not end, it will expire at the end of 2023. In order to report excessively high rents, the rent extortion app was launched by the party Die Linke in Leipzig, which has already generated around 800 reports of exorbitant rents.

The rent brake in detail

What exactly is behind the rent control? Its aim is to limit the rent level for new or re-lettings if affordable housing is at risk. As part of an amendment to rental law that has been in force throughout Germany since July 2015, Saxony was also added to the list of regions in which the rent cap applies. The rule states that the rent must not exceed the local comparative rent by more than 10 percent. Exceptions here are new buildings and extensively modernized apartments, which are not affected by this rule bau-wohnen.sachsen.de explained.

In Saxony, the Rent Limitation Ordinance came into force on July 13, 2022, and the cities of Dresden and Leipzig were designated as areas with tight housing markets. In order to ensure that rents do not rise above what is acceptable, various exceptions are set out, such as rentals from previous rentals or after modernizations, as regulated in Sections 556e and 556f of the German Civil Code (BGB).

A look at the situation in Saxony

Rising rental prices have caused unrest for many tenants in recent years. The state government's legal measures are a step in the right direction, but it remains to be seen how effective they will be in stabilizing rental prices. The discussion about affordable housing will therefore continue to play an important role in the coming years.