BERLIN, March 20 (Reuters) - Germany’s new rental law, due to come into force in 2015, will cap rent increases when properties change hands at 10 percent above average local rates, according to a draft of the measures seen by Reuters.
The law, which is being prepared by Germany’s Justice Minister Heiko Maas, will only apply in areas where the property market is particularly tight although it will exempt newly built and renovated flats, the document showed.
Apart from rent controls, the law will also put limits on brokers’ commission.
The rental law was an election promise of Chancellor Angela Merkel’s conservatives, although it was originally put forward by the centre-left Social Democrats (SPD) before last September’s vote.
Some 40 million people rent property in Germany. Rents have been rising sharply in big cities such as Berlin, Hamburg, Munich, Cologne and Frankfurt, and some people are finding themselves priced out of the market.
Relatively low rental costs have helped to keep the home-ownership ratio low at 46 percent, leaving most people to rent. ($1 = 0.7189 Euros) (Reporting by Holger Hansen; Writing by Madeline Chambers; Editing by Raissa Kasolowsky)