2026 is a landmark year for regulatory change in German residential real estate. Between the tenancy law reform, rising CO2 costs, new energy certificate requirements, the Grundsteuer overhaul, and municipal heat planning deadlines, private landlords face more simultaneous changes than at any point in the last decade.
This article covers every regulation that is already in force, taking effect during 2026, or currently in the legislative pipeline with realistic 2026 implementation.
1. Mietpreisbremse extended until 2029
Status: In force since June 2025.
The rent brake (Mietpreisbremse) has been extended until the end of 2029 in designated tight housing markets (angespannte Wohnungsmärkte). New rental contracts cannot exceed the local comparative rent (ortsübliche Vergleichsmiete) by more than 10%.
What this means for landlords:
- If your property is in a Mietpreisbremse area, you still cannot set initial rents more than 10% above the local Mietspiegel.
- New builds completed after October 2014 remain exempt from the rent brake.
- Comprehensive modernisations also remain exempt.
Action required: Check whether your municipality is designated as a tight housing market. If it is, verify your asking rent against the local Mietspiegel before advertising. Use our Mietpreisbremse calculator to check your maximum permissible rent.
2. Tenancy law reform (Mietrecht II)
Status: Draft bill published February 8, 2026. Expected to pass during 2026.
Federal Justice Minister Stefanie Hubig published the “Mietrecht II” reform bill on February 8, 2026, targeting four areas that directly affect private landlords.
Index rent cap (Indexmiete)
In tight housing markets, index-linked rent increases will be capped at 3.5% per year. Under the proposed new § 557b Abs. 4 BGB, any portion of an index increase exceeding 3.5% within a 12-month period is disregarded.
Impact: If you have an Indexmietvertrag in a tight market and inflation runs at 5%, you can only increase rent by 3.5%. The remaining 1.5% is lost permanently, not deferred.
Furnished rental transparency (Möblierungszuschlag)
Landlords renting furnished apartments must disclose:
- The calculation basis and current value of the furniture.
- The specific furnished supplement amount.
For fully furnished apartments, the supplement is capped at 5% of the net cold rent as a flat rate. If the landlord fails to disclose the supplement, the apartment is treated as unfurnished for purposes of the rent brake, meaning the supplement cannot be charged on top of the Mietspiegel rent.
Impact: This closes a widely used loophole where landlords charged high furniture surcharges to circumvent the Mietpreisbremse. If you rent furnished, you must now itemise and justify the supplement.
Short-term rental restrictions (Kurzzeitvermietung)
Letting apartments “for temporary use” will be limited to a maximum of six months. Successive short-term contracts will be aggregated, and the temporary-use exception will only apply if the tenant has a genuine temporary need (e.g., project work, medical treatment, study semester).
Impact: The practice of offering rolling 12-month “temporary” leases to avoid rent control is being shut down. If your tenant has lived in the unit for more than six cumulative months under short-term contracts, standard tenancy protections apply.
Grace period payment (Schonfristzahlung)
Tenants who receive a termination notice due to rent arrears can prevent the termination once by paying back the full outstanding amount within the grace period. Previously, this mechanism could be used repeatedly.
Impact: Modest change. Landlords can still terminate for arrears, but must expect that the first termination will likely be voided by a grace period payment.
3. CO2 cost increase and landlord share
Status: In force. CO2 price increase effective January 1, 2026.
The CO2 price for 2026 is set within a corridor of €55 to €65 per tonne, up from €50 in 2025. From 2027 onwards, CO2 certificates will be traded on the open market with no fixed price cap.
Under the CO2KostAufG (CO2 Cost Sharing Act), landlords share the CO2 costs with tenants based on a ten-stage model tied to the building’s energy efficiency:
| Building CO2 emissions (kg/m²/year) | Tenant share | Landlord share |
|---|---|---|
| < 12 (very efficient) | 100% | 0% |
| 12 - 17 | 90% | 10% |
| 17 - 22 | 80% | 20% |
| 22 - 27 | 70% | 30% |
| 27 - 32 | 60% | 40% |
| 32 - 37 | 50% | 50% |
| 37 - 42 | 40% | 60% |
| 42 - 47 | 30% | 70% |
| 47 - 52 | 20% | 80% |
| > 52 (very inefficient) | 5% | 95% |
Practical impact: For a typical older building with gas heating (class E/F), the landlord now bears 50-80% of CO2 costs. With the price at €55-65/tonne, this can mean €200-€600 per year per unit that the landlord cannot pass on.
Action required:
- The CO2 cost split must be transparently disclosed in the Heizkostenabrechnung (§ 6 CO2KostAufG).
- Calculate your building’s emissions class from the energy certificate.
- Budget for your share when planning your annual Nebenkosten. Use our rental yield calculator to model the impact on your net return.
4. New EU energy certificate (Energieausweis) from May 2026
Status: Takes effect May 2026.
This is one of the biggest changes of the year. From May 2026, the energy certificate system is overhauled:
New A-G scale
The previous German scale (A+ to H) is replaced with a Europe-wide uniform A to G scale. All new certificates must include CO2 emissions per m² and detailed renovation recommendations.
Extended obligation triggers
Previously, an Energieausweis was only required when selling or newly renting a property. From May 2026, a new certificate is also required:
- When renewing an existing lease (Mietverlängerung)
- After major renovations that affect the building’s energy performance
What landlords must do
- A demand-based certificate (Bedarfsausweis) costs €300-€500.
- If you have 10 apartments and renew all leases in 2026, you may need 10 new certificates.
- The certificate must be shown to prospective tenants proactively, not just on request.
Action required: Check the expiry date of your current Energieausweis. If it expires in 2026 or you plan to renew leases, budget for a new certificate in the A-G format. Order early to avoid bottlenecks with energy consultants.
5. Grundsteuer reform: first full year of new assessments
Status: In force since January 1, 2025. 2026 is the first full billing year for most landlords.
The property tax reform fundamentally changed how Grundsteuer is calculated. The standard assessment rate (Steuermesszahl) for residential property is now 0.031%. The assessed value is multiplied by this rate and then by the municipal multiplier (Hebesatz).
What’s changed for landlords:
- Some landlords saw their Grundsteuer decrease, while others (particularly in urban areas with high land values) experienced significant increases.
- The Bundesfinanzhof (Federal Fiscal Court) rejected legal challenges against the new assessment in late 2025, confirming the reform is constitutional.
- Grundsteuer remains fully passable to tenants as Nebenkosten under the Betriebskostenverordnung.
Practical impact: A typical apartment now carries Grundsteuer of roughly €300-€800 per year, depending on location and size. If your Grundsteuer has increased substantially, this directly increases your tenants’ Nebenkosten, which may affect competitiveness.
Action required: Verify your new Grundsteuerbescheid. If you haven’t received one, contact your Finanzamt. Update your Nebenkostenvorauszahlung if the new amount differs significantly from the old one.
6. Municipal heat planning deadline for large cities
Status: Deadline June 30, 2026 for cities over 100,000 residents.
Under the Wärmeplanungsgesetz, all municipalities must develop heat plans specifying the future heating infrastructure for each area: district heating, hydrogen networks, heat pumps, or biomass.
Key dates:
- June 30, 2026: Cities with over 100,000 residents must have their heat plan submitted.
- June 30, 2028: Smaller municipalities must follow.
Why this matters for landlords:
Once a municipality adopts its heat plan, the 65% renewable energy rule is triggered for that area. This means that any new heating system installed after the plan is adopted must operate on at least 65% renewable energy. Pure gas or oil heating is no longer permitted (unless using biogas or green hydrogen).
Action required: Check whether your city has published its heat plan or a draft. This determines your future heating replacement options. If your current boiler is nearing end of life (15-20+ years), start planning now.
7. Gebäudemodernisierungsgesetz: the new GEG
Status: Framework agreed February 2026. No draft law submitted yet as of April 2026.
The CDU/CSU-SPD coalition agreed on the framework for a new building modernisation law (Gebäudemodernisierungsgesetz) that will replace the controversial GEG (Gebäudeenergiegesetz) by July 1, 2026.
The key change: The controversial 65% renewable energy requirement for new heating systems will be abolished. Owners can again freely choose between heat pumps, gas heating, oil heating, district heating, hybrid systems, or biomass when replacing a heating system.
But: This freedom may only last until 2029, when restrictions on fossil fuel heating are expected to return in some form. The details are still under negotiation.
Impact on landlords:
- If you need to replace a heating system in 2026/2027, you will likely have more flexibility than under the current GEG.
- However, investing in a new gas or oil boiler now carries long-term regulatory risk.
- Modernisation cost pass-through to tenants remains at 10% of costs (minus subsidies), capped at €0.50/m²/month for six years.
Action required: Wait for the final law before making major heating investment decisions. If your boiler fails before then, the current GEG rules still apply.
8. Smart meter rollout
Status: Mandatory by end of 2026 for specific use cases.
Digital electricity meters (Smart Meters) must be installed by the end of 2026 for:
- Households consuming more than 6,000 kWh per year
- Properties with photovoltaic systems, heat pumps, or wallboxes installed after 2024
Additionally, all non-remote-readable heating and water meters in centrally heated buildings with at least two units must be replaced or retrofitted by end of 2026. From January 1, 2027, only remote-readable meters are permitted.
Cost implications:
- If meters are purchased, the cost is borne by the landlord and cannot be passed on.
- If meters are rented (Mietmodell), the rental costs are passable as Betriebskosten.
- Smart meter gateway operation costs are capped at €20/year for standard consumers.
Action required: Check your current metering setup. If you have old non-remote-readable heating meters, contact your Messdienstleister to arrange replacement before the deadline.
9. Heating cost billing: consumption-based requirement
Status: In force from the 2025/2026 billing period.
Landlords must charge heating costs based on actual consumption (verbrauchsabhängig), not flat rates. If a landlord fails to provide consumption-based billing, tenants are entitled to reduce their share of heating costs by up to 15%.
This is not new in principle, but enforcement is tightening and the penalties for non-compliance are becoming more tangible.
Action required: Ensure your Heizkostenabrechnung breaks down costs by consumption. If you’re using a Messdienstleister (e.g., Techem, ista), this should already be handled. If you’re doing Nebenkosten manually, double-check your methodology.
10. Umwandlungsverbot extended until 2030
Status: In force.
The conversion prohibition (Umwandlungsverbot), which requires official approval to convert rental apartments into condominiums (Eigentumswohnungen) in tight housing markets, has been extended until at least 2030.
Impact: If you own a rental building in a tight market and planned to split it into individual condos for sale, you need municipal approval. In most tight markets, this approval is difficult to obtain.
Summary: what to do now
| Rule | When | Priority action |
|---|---|---|
| Mietpreisbremse extension | In force | Verify asking rent vs Mietspiegel |
| Mietrecht II reform | Expected 2026 | Review index rent and furnished rental contracts |
| CO2 price increase | Jan 1, 2026 | Calculate landlord CO2 share, budget accordingly |
| New Energieausweis (A-G) | May 2026 | Order new certificate if expiring or renewing leases |
| Grundsteuer reform | In force (2025+) | Verify new assessment, update Vorauszahlung |
| Municipal heat planning | Jun 30, 2026 (large cities) | Check your city’s heat plan status |
| Gebäudemodernisierungsgesetz | Framework agreed, law pending | Wait for final text before heating decisions |
| Smart meter rollout | End of 2026 | Replace non-remote-readable meters |
| Consumption-based billing | 2025/2026 period | Verify Heizkostenabrechnung methodology |
| Umwandlungsverbot | Extended to 2030 | Factor into exit strategy if applicable |
The common thread across all these changes is higher compliance costs and more documentation. Private landlords who track their properties systematically will handle 2026 smoothly. Those still managing with spreadsheets and paper folders will find the administrative burden increasingly difficult to sustain.