New regulations in tenancy law: National Council approves rent cap

ScherbaumSeebacher partner and tenancy law expert Sascha Verovnik informs about the latest changes to the rent cap passed in December and explains what this means for future rents:

On 30 December 2023, the new rent cap was announced. Specifically, the increase in benchmark rents, category rents and rents in public housing was limited to a maximum of 5 per cent per year from 2024 to 2026. From 2027, the rents in question will no longer be increased by the annual inflation rate, but will instead be based on the average inflation of the last three years. “Free” rents are excluded from the rent freeze.

This is the most extensive political intervention in the benchmark system to date. The basis for calculating inflation was already adjusted in 2008 in light of the economic crisis: While the previous year’s December inflation was used as the basis for calculation before 2008, the average annual inflation was used from 2008 onwards. In 2009, 2016 and 2021, rent increases were suspended for one year in each case, meaning that a rent cap has now been introduced