- realtors commission get shared
- Berlin: rental freeze starts
- More rental subsidy
Property tax reform is coming
- Childrens subsidy runs out
- “Exchange bonus” for heating & more
- New EU money laundering directive
- Real estate transfer tax: no more tricks
- Housing property law is being reformed
- Law against usury rent
- Rental price brake extended
That will change in 2020 for tenants, property owners and landlords.
Shared realtors commission
So far, the market regulated who pays the realtor costs for selling a property. For example, buyers in Berlin, Brandenburg, Bremen, Hamburg, Hesse and Lower Saxony usually have paid the entire commission of 6% plus VAT. In other federal states, buyers and sellers each paid the half.
Now, the German Government wants to regulate this in a draft of the “Law on the Distribution of Brokerage Costs in the Mediation of Purchase Contracts for Apartments and Single-Family Houses”.
These are the most important regulations:
Realtor contracts for apartments and single-family houses need a text form, e.g. as email.
The buyer should only have to pay a maximum of 50 percent of the brokerage fee – even if he has ordered the broker.
If the buyer or seller engages a broker, the broker is obliged to charge a commission of 50 percent from both contracting parties.
This is a new example of symbolism – in the end it is always at the expense of the purchaser. For example in the higher purchase price with even more real estate transfer tax.
The new regulations are not expected to come into force until summer or autumn 2020.
In Berlin the ‘Rental Freeze Law’ starts
At the end of November 2019, the Berlin Senate passed a bill for a so called rental cover. This only applies in Berlin. The Red-Red-Green government (Socialists, Communists and Green Party) wants to freeze rents for about 1.5 million homes built before 2014 for five years from mid-March 2020.
On top of that: from December 2020, they will set limits of the rents at new rentals, depending on the location, age and facilities of the property. If these limits are exceeded by more than 20 percent, it should be possible to reduce existing rents.
More rental subsidy
The rental subsidy will be increased on January 1, 2020. Around 660,000 households are expected to benefit from this, especially families and pensioners.
On petition, rental subsidy is paid for needy tenants or for owners, who use the property by themself. The amount depends on the size of the household, income and rent or burden and must be reapplied annually.
Property tax reform is coming
The Bundestag and Bundesrat have agreed on a new calculation of property tax. Around 35 million properties and buildings now have to be re-evaluated. There are different ideas here. The Federal Minister of Finance would like to calculate the tax based on land value and rent. Bavaria has proposed in the Federal Council that the federal states may deviate from this and apply their own models; the federal states must change the existing rules by the end of 2024.
Childrens subsidy runs out
Until the end of 2020 families and single people with children can still apply for ‘construction childrens subsidy’. Until then, the construction permit or the concluded purchase contract must be signed. The current ‘construction childrens subsidy’ is a grant from the state in the amount of 1,200 euros per child and year with a maximum term of ten years, with a taxable annual household income of 90,000 euros for one child. For each additional child, the assessment limit increases by a further 15,000 euros.
Exchange bonus for energetic improvements
Real estate owners can benefit from the federal government’s 2030 climate protection program.
You can depreciate or deduct 20 percent of your energy-related renovation costs or 40,000 euros per property over three years, in the period from 2020 to 2029.
These energetic individual measures are, for example, the replacement of old windows with modern heat protection windows;
The exchange of old oil and gas heaters for renewable heat or hybrid gas heaters with a funding share of up to 40 percent;
As well as the insulation of roofs and external walls
New EU money laundering directive
As of January 10, 2020, Germany will have to implement the “Law Implementing the Amendment Directive to the Fourth EU Money Laundering Directive”. According to this, real estate agents must also check their customers when brokering real estate objects, but also when brokering rental or lease contracts from a monthly rent or lease of 10,000 euros.
Real estate transfer tax
When buying a property, 3.5 to 6.5 percent of the purchase price is due as real estate transfer tax, depending on the federal state.
With so-called share deals, companies try to avoid real estate transfer tax. The property is part of a company. The investor buys 95 percent of the company and the remaining 5 percent after a 5-year holding period. All without real estate transfer tax. The real estate transfer tax exemption limit is to be reduced from 95 to 90 percent and the holding period increased from 5 to 10 years.
Property Owners Communes (WEG)
The Federal Minister of Justice wants the Property Owners Act (WEG), which regulates the rights and obligations in a community of owners, so that residential property systems can be renovated more quickly. Particular attention is paid to the promotion of electromobility (charging sockets for electric cars) and barrier-free living.
Law against usury rents
The Federal Council has passed a bill to better deal with usury rents. If the agreed rent exceeds the local comparable rent by 20 percent and housing is scarce, landlords are threatened with a fine of between 50,000 euros to 100,000 euros. The draft law will now be submitted to the federal government, which will issue an opinion on it. The basis is Section 5 of the Economic Criminal Law (WiStG). Here the rent increase is regulated.
Rental price brake
In October the federal government decided to extend and tighten the so-called rent brake until 2025. This would have expired at the end of 2019. The same thing will happen with the rental cover in Berlin.
The rent brake limits (with a few exceptions) the rent in new or re-letting in the tight housing markets to the level of the local comparative rent plus ten percent.
There are two important changes here:
The period for determining the local comparison rent is extended from four to six years. This means that the comparative rent drops and the prices for new leases are slowed down even more.
In the event of violations of the rent brake, tenants can reclaim excess rent paid up to two and a half years after the contract was signed. It doesn’t matter whether the tenants have reprimanded the excess rent or not. So far, only the overpaid rent had to be repaid from the time of the complaint.