Contrary to their harsh criticism at a press conference, the Greens voted with the governing parties in the parliamentary Construction Committee for a law intended to curb rent increases. On Tuesday, the ÖVP, SPÖ, Neos, and Greens backed the “5th Rental Law Inflation Relief Act,” according to the Parliamentary Correspondence(Parlamentskorrespondenz). The government aims to provide greater legal certainty for value-protection clauses and to dampen inflation-driven rent hikes.
In the morning, however, the Greens had rejected the law as a “scam package” at the expense of tenants and presented their own five-point plan for “affordable housing.” At least their demand to extend the rent cap to free-market rents was met.
Minimum term of five years
The new law provides for an easier agreement on value-protection clauses and a cap on permissible index adjustments. Claims for refunds of rent payments due to invalid clauses will be restricted. In the future, rental contracts must run for at least five years, with few exceptions. Adjustments to benchmark rents, category rents, and other amounts under the Tenancy Act are to take place on April 1 each year, aligned with inflation. Index adjustments will be capped at 1% in 2026 and 2% in 2027. Beginning April 1, 2028, rent adjustments tied to inflation will be limited: any share of an increase exceeding 3% will be cut in half.
Criticism in the Construction Committee came from the Freedom Party. They saw no major breakthrough and missed accompanying measures such as incentives for construction activity.
