Germany confronts housing cost pressures with rent‑control extension, welfare reforms and tax assessments

The German federal government faces mounting pressure to address soaring housing costs. A draft law proposes extending the Mietpreisbremse (rent‑price brake) beyond the current 2025 deadline, a move backed by the governing coalition to protect roughly 26 million residents in tight rental markets. At the same time, a reform of the Grundsicherung (new basic security) will replace the Bürgergeld, with the latest figures showing about 5.1 million beneficiaries as of mid‑2026. Separate guidance on Wohngeld (housing allowance) outlines the minimum income required for eligibility, highlighting the financial strain on low‑income households. A recent study revealed that nearly half of German respondents lack any savings, attributing the shortfall largely to insufficient wages, as average full‑time earnings in April 2025 were €4,784 gross. Additionally, a legal review confirmed that a retroactive change to the Eigenmietwert (owner‑occupier rent valuation) system is unlawful, maintaining current assessment levels. Together, these developments underscore the challenges facing German renters and low‑income families amid rising rents and living costs.