Berlin’s Ban on Vacation Rentals, and how to keep profiting from Your Property

Berlin vacation rentals now illegalBack in 2014 the Senate of Berlin passed a new law that makes vacation rentals illegal. There was a two-year period of grace for registered rentals, but from April 1st 2016, this law, the so called “Zweckentfremdungsverbot” (literally a ban on misappropriation) bans all vacation homes that are rented out for a period of less than two months. The reasoning behind the law is, that Berlin has a shortage of rental homes as it is and the many vacation homes in the inner city are making that problem even worse.

Of course, a lot of those vacation rentals are owned by private individuals, many of them not from Germany. With Berlin’s buzzing real estate markets, plenty of investors have bought property in the city and are now renting it out. For these owners, the new law can bring a lot of challenges, if they are even aware of it. Our partner fine and mine GmbH supports real estate owners from outside of Germany and provides them with the necessary safety net for renting out their properties. That includes informing them about relevant legislation and recommending a course of action.

In the case of the misappropriation ban the appropriate step (no pun intended) is to start renting properties for longer terms and to a different target group. If the rental period is longer than two months, a furnished flat does not count as a vacation rental and is therefore legal. The only difference is that the property is not rented to tourists but professionals who are in town for few months, artists who visit for a season or grad students and scientists who spend a term at one of our many colleges.

Misappropriation ban for Berlin: vacation rentals or furnished flatsSo renting a property as a regular furnished flat instead of a vacation rental has the added bonus of a steady, well-to-do and comparatively quiet clientele. Temporary homes are less at risk to cause trouble with the neighbours. As tenants with longer periods of residence regard the property as their home, they treat it better and there is less damage to property and less hassle with insurances. And if you still need convincing, since the rental periods are longer, there is a steadier income to be had and less risk of a vacancy, especially off season.

It stands to hope that Berlin will deal with this particular piece of well-intended legislation the way it treats many outdated, pointless or counterproductive rules – by finding a way around it. After all, our city is becoming ever more popular among tourists, and one particular plus is usually that it’s affordable. In the meantime, property owners do not have to accept financial losses because of the new law. They simply have to adapt to new conditions. The reward could be a more regular, less troublesome income.