Justice Minister Targets Loopholes in Furnished Rentals

Government Pushes Back Against Hidden Rent Increases

Federal Justice Minister Stefanie Hubig has announced plans to tighten regulations around furnished rental housing in Germany. The move comes in response to growing concerns that landlords are exploiting legal loopholes to bypass the Mietpreisbremse—the nationwide rent control mechanism in place to protect tenants in high-demand areas.

While the Bundestag recently extended the Mietpreisbremse until 2029, it has become clear that its effectiveness is being undermined by deceptive furnishing practices. Many landlords are marketing apartments as “furnished” to justify rent increases far beyond the legal limit. This has prompted calls for regulatory action from both policymakers and tenant advocacy groups.

Minimal Furnishings Used to Justify High Rents

Under current regulations, the Mietpreisbremse caps the starting rent of a new lease at no more than 10 percent above the local reference rent in designated housing shortage zones. Although the rules formally apply to both furnished and unfurnished units, landlords are allowed to charge an additional fee for furnishings. Crucially, they are not required to list this surcharge separately in the rental agreement, making it difficult for tenants to assess whether the extra cost is justified.

Minister Hubig has strongly criticized this loophole. “It is not acceptable for someone to place two chairs and a table in a room and claim the rent should be hundreds of euros higher,” she said in an interview. She emphasized that the difference between a fully equipped apartment and one with only minimal furniture must be made legally transparent.

The minister shared her own experience of being offered partially furnished or mixed-use units in Berlin at exorbitant prices. She concluded, “This is a systematic issue, not isolated misconduct.”

Demand for Clear Limits on Furniture Charges

Hubig now wants to introduce clearer criteria defining what constitutes appropriate furnishing and how much landlords are allowed to charge for it. Her ministry is currently drafting legislative proposals that would set strict conditions under which additional charges for furniture can be applied.

The goal is to ensure that only genuinely move-in ready apartments—such as those with a fully equipped kitchen, sleeping area, and living room—may qualify for higher rent due to furnishings. A basic setup with limited utility would no longer be grounds for excessive surcharges.

She clarified that not all furnished rentals are problematic. “If a landlord offers a well-furnished apartment at a fair price, that’s entirely acceptable. But we will not tolerate disguised rent hikes disguised as furnishing bonuses.”

Tenant Groups Welcome Reform Efforts

The announcement has been welcomed by the German Tenants’ Association (Deutscher Mieterbund, DMB), which had long criticized the exploitation of loopholes related to furniture. DMB president Lukas Siebenkotten called the current situation a “major problem” and expressed support for stricter rules to protect renters from unjustified costs.

The issue is especially urgent in cities with tight housing markets. Many tenants, particularly younger or mobile professionals, rely on furnished rentals for flexibility. This has created a profitable segment for landlords who are increasingly shifting toward semi-furnished models that allow them to raise prices while staying under the radar of current legislation.

Sharp Rent Increases Amplify Pressure

Data from the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) underscores the growing severity of the problem. Since 2015, rental asking prices in Germany’s 14 largest cities have surged by nearly 50 percent on average. Berlin saw the steepest increase, with average rents more than doubling (+107 percent). Leipzig (+67.7 percent) and Bremen (+57 percent) also recorded significant spikes.

Even cities with relatively moderate changes like Dresden (+28.4 percent) are feeling the strain of rising rents. The primary cause cited by housing analysts is the persistent shortage of residential units. The number of new constructions has fallen noticeably in recent years, according to the Federal Statistical Office. This decline, paired with high demand, continues to drive prices upward.

In response, the federal government’s coalition has introduced a “Bauturbo” initiative aimed at speeding up urban planning processes. The initiative seeks to accelerate housing development through simplified municipal procedures, although experts warn it may take years before any tangible relief reaches the market.

Extension of Rent Control Offers Limited Relief

While extending the Mietpreisbremse through 2029 provides a regulatory framework for controlling rent, its impact remains limited as long as exceptions and ambiguities persist. Properties that were first rented after October 1, 2014, and those that have undergone major renovations, remain exempt. These exemptions, alongside the unregulated furnishing surcharge, are undermining the original intent of the law.

Minister Hubig’s proposal signals a shift toward stricter enforcement and accountability. By eliminating exploitative practices and enhancing transparency in furnished rental pricing, the government hopes to restore trust in the Mietpreisbremse and offer real relief to tenants facing spiraling housing costs.