Saxony’s 2026 rent brake for Dresden and Leipzig: what applies, what’s exempt, and where §556d BGB does not bite

What is in force in Saxony since 1 January 2026

Saxony enacted the Sächsische Mietpreisbegrenzungsverordnung (SächsMPBVO) by ordinance dated 2 December 2025 (SächsGVBl. 2025, p. 454). It designates the City of Dresden and the City of Leipzig as areas with a strained housing market and brings the federal “rent brake” into effect there from 1 January 2026. The ordinance expires on 30 June 2027. For contracts concluded within this period, the rent at the start of a new tenancy may not exceed the local reference rent by more than 10%. This limit comes from §556d(1) BGB; the Saxon ordinance is the legal trigger that makes it bite in these two cities.

Scope: where and how to measure the cap

The rent brake applies to new tenancy agreements for residential units located in Dresden or Leipzig that are signed between 1 January 2026 and 30 June 2027. The reference metric is the local reference rent under §558(2) BGB, typically evidenced by the municipal Mietspiegel (rent index). Dresden has a qualified Mietspiegel 2025; Leipzig provides tables and a calculator for the Mietspiegel 2025–2027. Landlords re‑letting within the ordinance period should calculate the applicable band in the Mietspiegel and then add at most 10% to set the permissible initial rent, unless an exemption applies.

Statutory exemptions: when §556d BGB is switched off

Two federal exemptions in §556f BGB switch off the rent brake in Saxony as elsewhere:

- New builds first used and let after 1 October 2014. The cap does not apply to the initial letting of such units. - First letting after comprehensive modernisation. The statute does not define the threshold, but courts and commentary generally require a substantial construction effort roughly equal to at least one third of the cost of a comparable new build. Evidence of scope and cost is essential, and mere repairs do not qualify.

In addition, §556e BGB permits higher permissible rents in two situations even where the brake applies: (1) if the previous rent (Vormiete) was already above the cap, the landlord may agree a rent up to the previous level (subject to exclusions for increases agreed in the last 12 months before the prior tenancy ended); and (2) if the landlord carried out modernisation within the last three years, the cap may be exceeded by the amount that a statutory modernisation rent increase under §§559, 559a BGB would allow. Detailed calculation rules apply.

Where §556d BGB does not bite at all

Some tenancies fall outside the social tenancy rules entirely under §549(2) BGB. Most relevant for investors is rental “for temporary use.” If a lease is genuinely for temporary use within the meaning of §549(2) no. 1 BGB, key tenant‑protection provisions—including the rent brake—do not apply. This is a narrow and fact‑sensitive category. Courts look for a real, clearly defined temporary purpose agreed from the outset (for example, a time‑limited work secondment). Using a “temporary use” label to bypass the brake is risky; if the exemption does not hold, the agreed rent can be challengeable under the brake with repayment consequences. Publicly subsidised social housing follows its own rent rules; other BGB caps are not the relevant framework there.

Disclosure duties and tenant remedies

If a landlord relies on an exemption or tolerance (prior rent or modernisation), they must disclose the relevant facts before the tenant’s offer. §556g(1a) BGB requires written disclosure of, for example, first use after 1 October 2014, first letting after comprehensive modernisation, the amount of prior rent, or modernisation within three years. Without timely disclosure, the landlord cannot rely on the exemption, and a late cure only helps after two years. A tenant who suspects a breach must first lodge a formal objection (Rüge). Overpaid rent is reclaimable from the time of the objection; there are additional timing rules if the objection is made within 30 months of the tenancy start.

Index and stepped rents at reletting

If an index‑linked rent (§557b BGB) or a stepped rent (§557a BGB) is agreed at reletting, the rent brake constrains only the starting rent. Later increases follow the contract mechanism (index or steps) rather than the 10% cap, subject to separate statutory limits. This makes the initial benchmarking against the Mietspiegel critical for compliance.

Practical checklist for foreign buyers and landlords

- Check location and dates: only Dresden and Leipzig; leases signed from 1 January 2026 through 30 June 2027 are in scope. - Compute the permissible starting rent from the city’s Mietspiegel and add at most 10%. - Test exemptions: first use/letting after 1 October 2014, first letting after comprehensive modernisation (document scope and costs), higher prior rent, or modernisation within three years. - Issue mandatory disclosures in text form before the tenant signs, if you rely on any exemption. - Avoid “temporary use” classifications unless the purpose is clearly temporary and provable. Misuse is litigation‑prone. - When in doubt, ask a German landlord‑tenant lawyer to review your draft lease and your exemption evidence before marketing the unit.