Tightening of Rent Reduction Law in Germany: Key Changes from August 2025

From August 2025, important changes in German rental law come into effect, aimed at strengthening tenants’ rights and increasing transparency in the housing market. The new regulations are designed to prevent excessive rents and establish clear rules for both tenants and landlords.

Under the new rules, landlords are not allowed to charge rent more than 10% above the local average. Exceeding the local average by 20% is considered an administrative violation and may result in substantial fines. In cases where the rent exceeds 50% above the local standard, criminal liability may apply.

For tenants, the changes provide the possibility to claim overpaid amounts through the courts if the actual rent does not comply with the local rent index (Mietspiegel). These measures aim to ensure fair rental conditions and protect tenants’ financial interests.

For landlords and investors, the new rules mean that rental agreements must be carefully drafted and checked for compliance with the law. Proper legal documentation minimizes the risk of administrative or criminal liability.

Professional legal support is crucial to ensure that rental agreements are properly structured, comply with current regulations, and protect the interests of both parties.

The tightening of the rent reduction law from August 2025 highlights the importance of legal expertise in real estate. Competent legal advice ensures safe, transparent, and legally compliant rental arrangements for both tenants and landlords.