New Conversion Ordinance 2025

What Owners and Investors Need to Know Now

The new Conversion Ordinance has been in force in Berlin since March 13, 2025, initially valid for five years. It applies to the 81 social conservation areas, where around 30% of Berlin’s population lives, with the aim of securing the existing rental housing stock and protecting the social structure of these neighborhoods.

Historical Context

First introduced in 2015, the ordinance was successively tightened and expanded in the following years. Originally, it applied exclusively to neighborhood conservation areas, with permit requirements for the conversion of rental apartments into condominiums. Permits were generally granted if the owner committed to selling the apartments exclusively to tenants for seven years – a mechanism that remains in place in the current version.

Expansion through the Building Land Mobilization Act

The Building Land Mobilization Act, introduced in 2021, created the legal framework to expand the scope of the Conversion Ordinance by designating new social conservation areas. In Berlin and other strained housing markets, the introduction of the law made it impossible to divide properties in the land register, except in a few exceptional cases.

Key provisions of the current regulation

Approval requirement

In social conservation areas, the conversion of rental apartments into condominiums remains subject to approval.

Building categories

Currently, the regulation applies to buildings with fewer than six residential units; for buildings with six or more residential units, the regulations under Section 250 of the Federal Building Code (BauGB) apply. From 2026, this distinction will no longer apply, and the approval requirement will apply uniformly to all buildings in social conservation areas, regardless of their size.

Exceptions

There are exceptions, for example, for owner-occupied buildings by family members.

Conditions

Approval may be subject to further conditions, such as the obligation to sell the apartments exclusively to tenants for a period of seven years after the conversion. Likewise, the active involvement of tenants in the conversion process, for example, through a required approval rate, can be set as a condition.

Other aspects such as luxury renovations and terminations for personal use are also taken into account – with the goal of preserving the social composition of the affected neighborhoods in the long term.

These developments underscore the importance of careful assessment and strategic planning for owners and investors in the Berlin real estate market.

Delano Kyles · CEO & Managing Partner