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Rent cap in Saxony: extension until 2027 – what does that mean for you?
Saxony is planning to extend the rent cap in Leipzig until 2027 in order to counteract the tight housing market.
Rent cap in Saxony: extension until 2027 – what does that mean for you?
In Saxony, the rent cap for the cities of Leipzig and Dresden is expected to be extended until mid-2027. The Saxon state government has released a corresponding draft for a new rent limitation ordinance for consultation. 1.5 years should be added to the current regulation, which expires at the end of 2025, so that the adjusted rules would apply until June 30, 2027. In Leipzig and Dresden it is currently permitted for rents in new rental agreements to be a maximum of 10% above the local reference rent, which makes the rent cap an important measure for tenant protection.
Infrastructure Minister Regina Kraushaar (CDU) described the situation on the housing market in both cities as “tense”. The rent cap is particularly important in order to ensure both tenant protection and the protection of owners. At the same time, Kraushaar emphasized that this regulation is “not a permanent solution” and emphasized the need for additional measures to promote housing construction in the region.
Promoting housing construction
In order to improve the tense market situation in the long term, the state government is planning to invest more in housing construction. This year, over 50 million euros have already been approved for new social housing. In addition, 140 million euros would flow into the renovation of existing apartments with affordable rents. Almost 90 million euros are planned for the construction or acquisition and renovation of owner-occupied residential property within the next two years. These investments are intended to help counteract the housing shortage and rising rents.
An external report on the situation of the housing market in Saxony is commissioned. The results, which are expected by late summer 2026, should serve as the basis for a decision as to whether and to what extent the rent cap is still necessary. In addition, the capping limit regulation, which regulates increases in current rental agreements, was recently extended until June 30, 2027. This regulation stipulates that rent increases have been reduced from the previous 20 to 15 percent, which is intended to reduce the burden on existing tenants.
Criticism of politics
However, the announcement of the extension of the rent cap has met with criticism from political circles. The Greens complain that Saxony is not fully exploiting the existing extension options, while the federal government is allowing an extension until 2029. The Left is even calling for sanctions against owners who do not adhere to the guidelines, as well as the introduction of a nationwide rent cap. These different viewpoints reflect the ongoing tensions and concerns about the housing situation in Saxony and especially in the affected cities.
The state government has already initiated the consultation of associations and responsible bodies on the draft regulation. Following this review, an amended draft could be brought to Cabinet for enactment and the resulting measures to be disseminated to a wider audience.
In summary, it can be said that the ongoing problems in the housing market in Saxony, especially in the cities of Leipzig and Dresden, must be addressed both through regulatory measures and through sustainable investments. The coming months will be crucial for the future housing situation in this region.