German Cabinet Approves Extended Rent Cap Until 2029

The proposed extension faces uncertain approval in Parliament as opposition parties signal resistance.

The German government has approved a proposal to extend the rent cap law, originally set to expire in 2025, until the end of 2029.
The measure aims to limit rent increases in areas with housing shortages, capping new rental contracts at 10% above local average rents.
The new proposal expands the rent cap's scope, exempting only properties first rented after October 2019, instead of the previous October 2014 cutoff.
The extension faces significant hurdles in Parliament, with the FDP and CDU/CSU opposing the plan, leaving its passage uncertain before the February elections.
Critics, including housing industry groups, argue the extended cap could deter new construction, while tenant advocates call it essential to prevent steep rent hikes.