German Federal Election 2021: What are the parties' positions on real estate? - Allen & Overy
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German Federal Election 2021:
What are the parties' positions on
real estate?
August 2021
Germany will be electing a new federal parliament on 26th September 2021. The
distribution of seats in the newly elected lower house (Bundestag) will be decisive in the
forming of the new government. And the composition of the new government will in
turn have a significant impact on the German real estate sector over the course of the
next parliamentary term, which is likely to span four years.
The so-called "grand coalition" has been ruling next government, while the left-wing socialist party
Germany since the last federal election in 2017. The (Die Linke) also cannot be ruled out.
grand coalition is an alliance between the
conservative Christian Democratic Union (CDU), Numerous issues relevant to the real estate sector
together with its Bavarian sister party the Christian are at the heart of the parties' election manifestos.
Social Union (CSU), and the Social Democratic The discussion across all parties focuses in
Party of Germany (SPD). The strongest opposition particular on climate protection programmes,
party is the right-wing populist Alternative for regulating rents and facing the challenge of creating
Germany (AfD), which, in terms of its politics, is new living space.
largely isolated from the other parties, however. At
Over recent months, numerous legislative proposals
present, it would appear that the liberal Free
have triggered heated political discussions. These
Democrats (FDP) and the "green" party (Bündnis
include in particular the "Berlin rent freeze", which
90/Die Grünen) could play a key role in forming the
has since been ruled unconstitutional, the reform of
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real estate transfer tax with the aim of rendering in particular in the large metropolitan areas, and the
share deals less attractive and the Building Land real estate sector occupies a prominent position in
Mobilisation Act, the proponents of which intend, Germany's ongoing nationwide drive to promote
among other things, to offer local authorities greater renewable energies (Energiewende), it may be
scope in exercising their right of first refusal. In view assumed that more draft legislation affecting real
of the fact that housing shortages remain a problem, estate will be floated in the coming parliamentary
term.
The following pages offer an overview of the parties'
key positions relating to the real estate sector.
Your contacts
Dr Christian Hilmes Dr Udo H. Olgemöller
Partner – Hamburg Partner – Frankfurt
Real Estate Public Law
Tel. +49 40 82221 2187 Tel. +49 69 2648 5690
christian.hilmes@allenovery.com udo.olgemoeller@allenovery.com
2 allenovery.de
Overview of the parties' positions:
1. Social policy – Reject the "legally – Rental price brake to – Allow rent caps on – Reject dispossession – Germany-wide rent – Reject rental price
questionable" rent apply indefinitely; in existing properties; measures, rental price freeze; rent freeze for brake and rent freeze
freeze critical residential rental price brake to brake and rent freeze; small businesses and
areas: temporary be made stricter and mobilise free areas to social and non-profit
moratorium on rents to apply indefinitely; quickly create new associations, among
whereby rents can – Regular rent increases housing others;
only be increased in to be limited to 2.5% – Rent block on existing
line with inflation; p.a. in line with index rental contracts in
– Introduce Germany- of rents; critical residential
wide, legally – Reinforce qualified areas; end rent
compliant, qualified index of rents; "explosion";
index of rents; reference to rental – Create contact points
reference to rental
contracts for at least contracts for at least to receive complaints
the past 8 years in the past 20 years in on rent sharks; punish
calculation calculation landlords who breach
rent freeze
– Creation of social – 100,000 new social – Significant increase in – Up to 250,000 social – State-owned property
housing is to be housing units required funds for creating housing units per companies to offer
subsidised and per year social housing; year; minimum tenants the option to
housing allowance increase the current percentage of social buy their homes
regularly adjusted portfolio of social housing in individual
from 2022 housing by one million neighbourhoods;
units in ten years – 50 percent of the
residential market to
be held by the public
and non-profit sector
– Guaranteed right of – Strengthen local – Bolster local – Housing associations
first refusal for local authorities' right of first authorities' right of first to be given priority
authorities at "fair refusal refusal when distributing
prices" building land
– No sale of residential – No sale of state- – Prohibit conversion of
building land owned owned residential rental property to
by local authorities property to private owner-occupied
investors; exclusive,
discounted sale to
local authorities with
permanent social
commitment
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– Curb speculation with – Where necessary, – Prohibit
residential property impose building misappropriation of
obligation on and confiscate vacant
landowners in areas residential and
with housing commercial property
shortages in case of for temporary use;
misuse and introduce a publicly
speculative vacancy available register of
real estate
2. Tax and fiscal – Put an end to the – Share deals as an – Put an end to the – Anti-speculation act to
policy practice of avoiding instrument for tax practice of avoiding outlaw share deals in
real estate transfer tax avoidance to be real estate transfer tax particular
by using share deals abolished; pro-rata tax by using share deals
on real property
ownership to be levied
instead on company
sales
– On creation of rental – Abolish current tax – Tax capital gains on – Avoid "cost-triggering – Put a cap on land
property: a further 5% exemption for capital private real estate standards", to be prices and rule out
of acquisition and gains on non-owner sales at a determined on the privatisation of state-
construction costs to occupied properties "reasonable" rate basis of a uniform owned land;
still be tax-deductible after ten-year holding inspection of building – Increase tax on and
after 2021 period; replace with costs ("Baukosten- skim off capital gains
levy on planning gains TÜV") from speculation and
real estate sales; real
estate funds to be
outlawed
– Reduce ancillary – Increase linear – Remove real estate
purchase costs by write-down from 2% to transfer tax for
introducing more 3% owner-occupied
flexible real estate homes; make it more
transfer tax: lower for difficult for buyers who
owner-occupiers, are not German
higher for large citizens and have their
housing companies primary residence
abroad to purchase
residential property by
increasing real estate
transfer tax to 20%
4 allenovery.de– Abolish surcharge – Review whether real – The ability to pass on – Gradual removal of – Carbon tax is not to be – Abolish real property
under Renewable property tax can be real property tax to surcharge under passed on to tenants tax and fees such as
Energy Sources Act passed on to tenants tenants to be outlawed Renewable Energy Renewable Energy
(Erneuerbare- with a view to Sources Act Sources Act
Energien-Gesetz); abandoning it surcharge and
energy-related completely in future TV/radio licence fees
surcharges and taxes
to focus more on
carbon emissions
3. Support for – 1.5 million new – Create new living – Increase number of – Work to alleviate – Make it easier to – Build needs-oriented
building projects residential units by space; federal, state building projects (esp. housing shortage by convert existing housing, e.g. by
2025; and local authorities to in towns/cities) and mobilising land and properties to create designating new
– Fast, modern and secure and increase simplify procedure for facilitating fast building new, affordable building land; reduce
affordable creation of public ownership of acquiring residential – Introduce a register of housing costs
new housing in areas real property property; strengthen vacant and potential
with housing existing housing sites
shortages; in associations and
particular faster and establish new ones
simpler realisation of – Improve use of
single-family housing existing residential
and greater emphasis space by promoting
on "modular space-saving housing
prefabricated
housing";
– Utilise existing
opportunities for filling
vacant plots (building
across boundaries,
increasing height)
– Simplify building – Accelerate building – Accelerate approval – Building law to be
regulations; automatic projects, in particular processes; harmonise harmonised and
approval if no decision by attracting skilled state-level building simplified at federal
on building application workers; regulations, in level, processes
has been passed – Participation particular introduce accelerated and
within two months of processes, where automatic approval if bureaucracy reduced
all documents being citizens or local no decision on
submitted authorities are building application
involved in particular has been passed
building projects, within a reasonable
should focus on "how" period
and not "whether" the
project should go
ahead
4. Environmental – Upgrade energy – Steer investments – Double – and further – Rate of renovation to – New Building Energy
and energy policy efficiency of old using carbon prices; increase – the rate of be tripled at least Act (Gebäude-
buildings to achieve motivate landlords to renovation; energiegesetz) to be
climate targets; modernise, with – Define higher building rejected. Ordinance
protect tenants carbon price to be and renovation on Energy Saving
against excessive borne by landlords standards; (Energieeinspar-
financial burdens and investments in – Present renovation verordnung) to be
while imposing heating network and strategy with every abandoned and fire
obligations on housing neighbourhood change in ownership protection, thermal
companies strategies being (subsidised as and noise insulation to
subsidised necessary); be reduced to
– Limit modernisation necessary minimum
surcharge to max.
€1.5/m2, to ensure
allenovery.com 5energy upgrades do
not affect gross rent;
– Fair distribution of
costs for climate-
friendly modernisation
work based on "3
thirds model"
(landlord, tenant,
state)
– Further technological – Efficient heating of – Climate-neutral – Establish hydrogen – Germany-wide climate
development and buildings using planning spanning the and synthetic fuels as check of all buildings
innovation to increase renewable energy entire lifetime of new second pillar of a by 2025;
efficiency; sources (innovative buildings and existing future energy system; – Guaranteed
– Increased use of heating and energy structures heat buildings using climate-neutral
environmentally systems for five million carbon-neutral building stock by 2035
friendly and local homes by 2030) hydrogen instead of
building materials fossil fuels
(e.g. sand, plaster,
wood);
– Transform building
sector to closed-loop
economy
– Increase tax relief for – Targeted support for – Link discount on – State subsidies for
energy upgrades, innovative forms of power prices for modernisation costs
particular subsidies for renewable energy companies in that landlords are
"tenant power" production international unable to cover; in
(Mieterstrom) (e.g. integrated competition to return, landlord's
– Create more attractive photovoltaic in implementation of commitment to
KfW programmes in building shell); measures to improve operate on non-profit
order to improve – Gradual expansion of energy efficiency; basis;
support for energy solar power units on – Build 1.5 million solar – Measures to
upgrades on all suitable roofs roofs in the next 4 guarantee increased
residential and years (solar roof as energy efficiency
commercial property; new standard); should include
increase tax relief for – Investment targeted subsidies for
modernisation of programme for two training schemes in
rental and commercial million highly efficient traditional professions
properties; heat pumps by 2025; and specialised study
– Accelerate write- – Subsidise courses in particular
downs on commercial climate-neutral energy
investments that systems
improve energy
efficiency or reduce
carbon emissions
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