A member of the governing centre-right Christian Democratic Union (CDU), Kai Wegner, had sought the opinion of the ministry and shared it in a statement emailed to dpa on Saturday.
In October, the city-state of Berlin announced plans to freeze rents for five years and cap new rents under new leases, depending on the property. In certain cases, the plans would allow for rent reductions.
The rent cap would be a nationwide first and the left-wing coalition that governs Berlin state hopes to put the plans in place by early next year.
However, the Interior Ministry said the state of Berlin did not have the jurisdiction to enact legislation to limit rents, arguing in its letter to Wegner, a member of the national Bundestag parliament, that this was the job of the federal government.
Rent prices have risen sharply in Berlin and other German cities over the past decade. While still cheaper than other European capitals, Berlin has relatively high unemployment and poverty levels that have left many struggling to find affordable housing.