"Let's not rush": Rental package likely not coming until 2026

Currently, the rental and housing package of the federal government is under review. Ideally by the end of the year, but possibly not until January, it should be presented in the plenary session of the National Council, says ÖVP finance spokesperson Andreas Ottenschläger. "The goal would be this year, but we are not rushing," he said on Monday evening to journalists. It is planned that the new regulations will already come into effect at the beginning of 2026.

"Very challenging negotiations" preceded, said Ottenschläger. Core elements of the package are the value protection of rental contracts and a brake on the increase of free rents. The planned Rental Value Protection Act provides for the first time a statutory value protection for residential rental contracts. This refers to the relationship between a service - such as the provision of an apartment - and the consideration - for example, in the form of rent. "This will restore legal certainty," agree Ottenschläger and ÖVP housing spokesperson Norbert Sieber.

Legal Certainty Through New Value Protection Act

Previously, two rulings by the Supreme Court (OGH) from 2023 caused irritation. They set guidelines on how value protection agreements for residential rental contracts must be formulated. If these requirements were not met, the possibility of value protection would have been eliminated. In the extreme case, all rental adjustments made could have been invalid, and the increases could have been reclaimed for up to 30 years and frozen at the original nominal value.

With the Value Protection Act, the negative consequences of this provision would now be "repaired," emphasize Ottenschläger and Sieber. The new law brings legal certainty and "a fair balance between tenants and landlords." The legal basis is a decision by the Constitutional Court (VfGH) from July 11, 2025. In it, the VfGH confirms that value protection per se is not unconstitutional, but serves the legitimate interest of an entrepreneur. In view of a lack of clear jurisprudence on the validity of overpaid value adjustments, the governing parties have agreed on a period of five years.

Limited Inflation Adjustment for Rents

Already now, the uncertainty in the market is great, emphasize the two ÖVP politicians. Because "undermining the value protection claim would have fatal economic consequences" for many landlords, investors including pension funds, the financial sector, as well as for construction activity in the rental housing sector. In addition, there would be impacts on necessary adjustments with regard to achieving climate goals.

It was very important to the ÖVP that the new regulation does not interfere with rent price formation, emphasizes ÖVP finance spokesperson Ottenschläger. He also welcomes the alleviation of the planned rent increases through a partial decoupling of the automatic adjustment to inflation. Accordingly, the rent increases - or decreases - on April 1st by the inflation rate of the previous year - but only up to a maximum of 3 percent. In the case of higher inflation, the portion over 3 percentage points is only considered half. For example, with a previous year's inflation of 4 percent, the rent would only increase by 3.5 percent. With a consumer price index increase of 5 percent, the rent increase would only be 4 percent.

Lower Limit for Fixed-Term Rental Contracts in the Future at Five Years

This regulation currently only affects free rents. The increase in regulated and so-called "reasonable" rents is limited to 1 percent for 2026 and a maximum of 2 percent for 2027. According to the Rent Value Protection Act, "reasonable" rent formation includes commercial rents, new buildings after May 8, 1945, listed buildings with the landlord's own investments, apartments over 130 square meters, as well as indefinite rental agreements with a written agreement after one year.

In addition, the draft law provides for longer minimum terms for fixed-term rental contracts. Instead of the previous three years, the shortest term of a rental contract should thus last five years. From the landlords' perspective, a longer rental period would also be desirable, says Sieber. Because "every landlord is happy about good tenants."

(APA/Red)

This article has been automatically translated, read the original article here.