Temporary living

This page provides information on temporary living, the legal requirements and how to create a suitable rental agreement in Immodio.

1. What is temporary living?

Temporary living is a fixed-term letting in which the tenant moves the centre of their life to another place for a limited period, for professional or private reasons. These are usually furnished apartments that are fully equipped and can be moved into straight away. This form of letting falls under Section 549 (2) no. 1 of the German Civil Code (BGB). Under it, certain protective provisions of tenancy law do not apply where residential space is provided for temporary use only.

Short-term tourist letting does not count as temporary living and in many municipalities is only permitted with a licence.

2. Concluding a temporary living rental agreement in Immodio

In Immodio you can conclude a rental agreement for temporary living by selecting the fixed-term reason "Residential space for temporary use – temporary living" in the "Term" step when creating a new tenancy.

In the free text field that appears, it is advisable to explain briefly why the residential space is only being let for a temporary purpose. Typical reasons for temporary living are:

• A fixed-term period of study (for example a semester apartment)

• A work-related project assignment

• An internship or legal traineeship away from home

• An interim solution while moving home

3. What has to be considered regarding misuse of residential space?

Misuse of residential space (Zweckentfremdung) may exist if you use residential space not for living but for another purpose, for example as commercial space or for letting by the day as a holiday apartment or on Airbnb.

Whether misuse exists depends on the specific purpose of use and the duration of the letting. Many towns and municipalities have their own statutes or regulations setting out when residential space is misused and whether a licence is required for it. There is no nationally uniform rule on the misuse of residential space in Germany. An addition to Section 6 (1) of the Act on the Improvement of Tenancy Law allows the state governments to issue their own provisions on misuse.

Temporary living generally does not count as misuse if:

• the tenant uses the residential space for residential purposes for a limited period,

• moves the centre of their life there only temporarily

• and the letting covers a reasonable minimum rental period (often at least one month).

Check with your town or municipality about the applicable rules on misuse of residential space. The rules differ from region to region. Breaches can quickly result in a high fine.

4. Rent control and temporary living

For temporary living, rent control generally does not apply, since the residential space is provided to the tenant for temporary use only. The exemption under Section 549 (2) no. 1 BGB applies. It explicitly excludes rent control where a property is let for temporary use.

You can find more information on rent control here.

5. Tax particularities

Income from letting and leasing is generally exempt from VAT (Section 4 no. 12a of the German VAT Act).

An exception applies, however, to short-term lettings with a rental period of less than six months. In these cases the reduced tax rate of 7% usually applies for commercial landlords.

Small business rule:

• Anyone who qualifies as a small business under Section 19 of the German VAT Act is exempt from VAT.

• The condition is that total turnover did not exceed 22,000 euros in the previous year and is expected to remain below 50,000 euros in the current year.

• Classification as a small business is independent of the legal form and affects the VAT obligation only.

When do you count as a commercial landlord?

• You are generally regarded as a commercial landlord as soon as you carry out your letting activity systematically, on a lasting basis and with the intention of making a profit, for example through regular short-term lettings, several properties or additional services

• In this case you are usually required to register a business. You can find information on the necessary documents and fees on the website of your competent trade office.

Typical characteristics of a commercial letting

Case law names various criteria that can indicate a commercial letting:

• Frequently changing tenants, for example with letting by the day or week (for instance to fitters or short-stay guests).

• Short letting periods, usually under six months per tenancy.

• Offering additional services that go beyond simply providing living space, for example cleaning, a change of linen, breakfast or a reception desk.

• Several similar furnished apartments in the same building, comparable to an apartment house or boarding house.

• Commercial organisation, for example running an office, employing staff or actively advertising several properties.

• Managing third-party properties or trading in property in addition to your own letting.

• Selling several properties within a short period (note: with more than three sales within five years, what is known as commercial property trading may exist).

When does letting count as private?

• You let one or a few apartments on a long-term basis (usually more than six months).

• No services are offered that go beyond simply living there.

• You manage only your own property and do not engage in commercial trading.

• The letting serves to generate income in the long term and not to make short-term profits.

In these cases the income is usually income from letting and leasing and not commercial income.

The classification of whether a letting is private or commercial is made by the competent tax office. If you are unsure, you should consult your tax office or tax advisor before starting to let.