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'Furnished' apartment in Germany
Germany's rental housing system, long heralded for its stability and tenant protections, is now under renewed scrutiny as evidence mounts of widespread circumvention of rent control laws through the growing use of furnished, short-term rentals. In major urban centres such as Berlin, Cologne and Frankfurt, a legal loophole is being exploited at scale, enabling landlords to sidestep price caps by offering their properties as "temporary" and "furnished" – often with little more than a chair added to justify the classification.
At the heart of the issue is Section 549(2) of the German Civil Code (BGB), which exempts tenancies "for temporary use" from the rent cap (Mietpreisbremse). Landlords can also levy an undefined furniture surcharge on top of base rents, without the obligation to itemise costs. The results are stark. A recent Haufe analysis of ImmoScout24 listings showed that furnished apartments in Germany's five largest cities now command rents averaging €10 more per square metre than their unfurnished equivalents. In Berlin, that difference reaches €17.70, with furnished apartments averaging €36.82 per square metre.
Despite claims from the Federal Ministry of Justice that there's no systemic abuse, Berlin's governing mayor Kai Wegner (CDU) is promising a Bundesrat initiative to regulate furnished lettings more tightly. "You put a chair in there and, hey presto, the rent cap no longer applies," Wegner said in April. He has vowed to pursue the issue at federal level. The Bundesrat has already backed proposals from Hamburg and Bremen to regulate the furniture surcharge and restrict the use of temporary contracts in tight housing markets.
The scale of the phenomenon is not in doubt. The ImmoScout24 data cited by Haufe shows that, by Q4 2023, furnished flats made up 41% of listings in Frankfurt and 35% in Berlin. In the capital, small apartments under 50 square metres are now listed as furnished in two out of three cases. According to The Guardian, temporary furnished listings now account for over 50% of all flats offered in parts of Berlin such as Kreuzberg – triple the figure a decade ago.
Critics argue that the loophole is undermining both the rent cap and broader housing policy. Furnished temporary units are immune from misappropriation rules designed to deter Airbnb-style tourist lets. They also exert upward pressure on the Mietspiegel, the official rent index used to calculate legal rent increases. Because most tenants in this segment are international or unaware of their rights, the system is poorly enforced and rarely challenged.
A business model built on the loophole
A whole ecosystem has emerged to support the practice. Platforms such as Wunderflats and Housing Anywhere offer landlords turnkey solutions to furnish, market and manage short-term lets, often explicitly advertising the regulatory arbitrage on offer. "Many of our landlords find the complexity of laws and regulations in Berlin a nuisance," Housing Anywhere notes on its site. "We’re happy to guide you through the legal maze."
Some parts of the industry are pushing back. The Bundesverband Micro-Living (BML), which represents developers of business and student housing, warns that overregulation would stifle investment in new supply. "A regulation that extends the rent cap to business apartments and micro-apartments overlooks the fact that this will not create a single apartment for families," said BML chairman Michael Vogt. He argues that his members build specifically for distinct user groups and help relieve pressure on the traditional rental market.
Others disagree. Karin Pein, the SPD's former Hamburg senator for urban development, has described the exemption as a clear abuse. "We must not allow the rent cap to be circumvented through furnished rentals or short contract terms," she said in 2023. Pein co-authored the failed Bundesrat initiative that would have required furniture surcharges to be itemised and capped, and ended blanket exemptions for contracts over six months.
Whether legislative momentum builds this time remains uncertain. Former Justice Minister Marco Buschmann (FDP) managed to resist calls for tougher rules, pointing to a 2023 study by Oxford Economics that downplayed the scale of the problem. Yet that same study admitted that furnished lettings had become more common and that many landlords may be exploiting the exemption.
Meanwhile, districts such as Charlottenburg-Wilmersdorf in Berlin are moving ahead with local measures to restrict furnished temporary lets, including requiring change-of-use permits. Similar efforts are underway in Pankow and Neukölln. But the power to reform tenancy law lies with the Bundestag.
With Berlin’s housing affordability eroding and investor activity shifting toward high-yield furnished stock, calls for reform are likely to grow louder. For now, a modest piece of furniture remains one of the most effective tools in a landlord’s arsenal for bypassing some of Germany’s core housing protections.