For many international professionals, a furnished flat on a temporary lease is their first step into Munich. This is exactly the segment the federal government wants to regulate anew. We show what is planned, how far the process has got and what landlords and companies can already prepare.
Anyone looking for a furnished flat in Munich usually pays considerably more than for an unfurnished one. For landlords the model is attractive; for tenants it is often the only quick solution, for example when moving for a new job. Lawmakers, however, also see it as a way of getting around the rent cap (Mietpreisbremse). The draft bill amending tenancy law, often called “Mietrecht II”, therefore aims to reform three points: the furnishing surcharge, temporary lettings and index-linked rents.
Important up front: the reform has not yet been passed. The federal cabinet adopted the draft in April, followed by the first reading in the Bundestag in July. In mid-October the legal affairs committee heard experts, whose assessments differed widely. There is still a need for talks within the coalition: the CDU/CSU wants changes in favour of landlords, while the Ministry of Justice is pressing for a swift conclusion.
Details may therefore still change. No date has yet been set for the vote in the Bundestag.
So far, the law does not specify how high a surcharge for furniture may be. In areas with a rent cap, which include Munich, this is set to change. Landlords would have to state the surcharge unprompted before the contract is signed. According to the draft, a monthly surcharge of at most 1 percent of the current value of the furnishings is considered reasonable. For fully furnished flats, there is to be a simplified presumption that up to 10 percent of the rent for the unfurnished flat is reasonable.
Anyone who fails to state the surcharge in time takes a considerable risk: for the purpose of determining the permissible rent, the flat is then treated as let unfurnished. This effect lasts until two years after the information has been provided.
Two worked examples show the order of magnitude. With furnishings worth 12,000 euros today, the surcharge would be at most 120 euros a month. For a fully furnished flat that could be let unfurnished for 1,500 euros net cold rent, up to 150 euros would be presumed reasonable under the flat rate.
Flats let only for temporary use are currently exempt from many protective rules, including the rent cap. What “temporary” means has not been precisely defined so far. The draft draws a clear line: the exemption is to apply only to a specific need of up to six months. If a longer need only arises after moving in, an extension to a total of eight months is possible.
If this limit is exceeded, the normal rules of tenancy law apply from that point on, including the rent cap and protection against termination. Chaining short-term contracts would thus no longer be a way out. Unlike the other points, this rule is to apply nationwide, not only in tight markets.
In practice this means: a three-month project or an internship remains a typical case for temporary housing. A two-year assignment, on the other hand, does not. Even under current case law, what matters is whether someone intends to make the flat the centre of their life.
With an index-linked rent, the rent follows the consumer price index. After the experience of high inflation in 2022 and 2023, a brake is to be introduced: if the index rises by more than 3 percent within a year, only half of the increase above that may be passed on to the rent. With 5 percent inflation, a rent increase of at most 4 percent would therefore be possible.
The cap is to apply only in areas designated by the respective state government by ordinance. Whether and when Bavaria will do so for Munich is open. Unlike the rules on furnishing and short-term lets, this rule is also to apply to existing index-linked tenancies.
Munich is particularly affected by the reform. According to ImmoScout24, almost one in three rental listings in Munich was furnished at the end of 2023, and the median asking rent was around 9 euros per square metre above a comparable unfurnished flat. At the same time, the demand is real: the German Economic Institute (IW) points out that international professionals and students often need an address quickly, not least for their visa.
The reform makes the furnished-flat segment more transparent, but not simpler. For reputable landlords who already calculate their surcharge properly, little changes, except that they will have to state it openly in future. Those who mainly use furniture or short-term contracts to get around the rent cap, on the other hand, will lose this model.
As the draft may still change during the parliamentary process, we recommend preparation rather than hasty action. As things stand, you do not need to amend existing contracts. We will report as soon as the Bundestag has decided.
Whether rent calculation for owners or a home search for international professionals: in a personal conversation we find the right solution.