Rent increases: what your landlord may and may not do

What types of rent increase are there?

During an ongoing tenancy, the landlord cannot simply set the rent. They need either your consent, an agreement in the tenancy agreement or a statutory ground for an increase (Sec. 557 BGB). Which rules apply depends on what they rely on.

	Comparative rent (Sec. 558)	Modernisation (Sec. 559)	Graduated rent (Sec. 557a)	Index-linked rent (Sec. 557b)	Operating costs (Sec. 560)
When permitted	rent unchanged for 15 months, request one year after the last increase at the earliest	after a modernisation within the meaning of Sec. 555b BGB	if agreed in writing in the tenancy agreement	if agreed in writing in the tenancy agreement	with a flat rate subject to a right to increase, or advance payments after a statement
Upper limit	comparative rent, cap of 20% or 15% in 3 years	8% of the costs per year, no more than €3 per m² in 6 years (€2 if the rent is below €7 per m²)	the agreed graduated amounts	change in the consumer price index	actual costs, reasonable advance payment
How often	effective no more than every 15 months	after each measure, observe the cap	steps at least 1 year apart	after 1 year of unchanged rent at the earliest	after a change in costs or a statement
Form	text form with reasons	text form with calculation	no declaration needed	declaration in text form with index figures	declaration in text form
Consent needed	yes	no	no	no	no
Payable from	start of the 3rd calendar month after receipt	start of the 3rd month after receipt	on the agreed date	start of the month after next following receipt	flat rate: start of the month after next

Comparative rent: the most common case. The landlord asks for your consent to the rent that is customary for comparable flats. Without your consent, they have to go to court.

Modernisation: After insulation or new windows, the landlord can pass on part of the costs, without your consent, but with a correct announcement and calculation.

Graduated and index-linked rent: The development is already set out in the tenancy agreement, as fixed euro amounts or linked to the consumer price index. More on this in the guide Index-linked rent.

Operating costs: If service charges rise, the landlord can adjust the flat rate or the advance payments. The basic rent stays the same.

In addition, you can voluntarily agree at any time (Sec. 557 (1) BGB). The agreed rent then applies, even if the landlord could not have enforced it.

How often may the landlord increase the rent?

For an increase up to the comparative rent, two time limits apply (Sec. 558 (1) BGB):

• One-year waiting period: The request for an increase may reach you one year after the last increase at the earliest.
• 15 months: At the time the new rent is to apply, the previous rent must have been unchanged for 15 months.

Because the new rent only applies from the third month after receipt, the two time limits together mean at least 15 months between two increases. So one rent increase per year is not possible by this route.

Is a rent increase every 2 years allowed? Yes, if the time limits are observed, the rent does not exceed the comparative rent and the cap over 3 years is respected.

What does not count: Increases because of modernisation or higher operating costs do not restart the time limits and are not included in the cap (Sec. 558 (1) sentence 3, (3) BGB). They are permitted independently.

Graduated and index-linked rent: Here, the contract has its own intervals. The steps must be at least one year apart (Sec. 557a (2) BGB). An index-linked rent must remain unchanged for at least one year before it can be adjusted again (Sec. 557b (2) BGB).

Maximum rent increase: how much may the rent rise?

For the comparative rent, there are two limits. The rent may not exceed the local comparative rent, and it may not rise faster in 3 years than the cap allows. The lower value always applies.

The cap: 20 or 15 percent

Within 3 years, the rent may rise by no more than 20% (Sec. 558 (3) sentence 1 BGB). Where the supply of rented flats on reasonable terms is particularly at risk, the state government can lower the limit to 15% by ordinance for no more than 5 years (Sec. 558 (3) sentences 2 and 3 BGB). Whether 15% applies in your municipality follows from the ordinance of your federal state. Many states have issued such ordinances, but the areas and terms change.

The starting point is the rent 3 years before the date on which the new increase is to take effect. If the new rent is to apply from 1 June 2027, you compare it with the rent on 1 June 2024. You leave out increases because of modernisation and operating costs.

Local comparative rent as the upper limit

The local comparative rent is the rent agreed or changed in the last 6 years in your municipality or a comparable municipality for flats of a comparable type, size, fittings, condition and location, including energy features (Sec. 558 (2) BGB). It is not a fixed value but usually a range, for example in the rent index (Mietspiegel).

Worked example: how much may my rent rise?

The figures are an example. Your flat has 80 m².

Step	Amount
Net basic rent 3 years ago	€700
Net basic rent today	€750
Limit with a 20% cap: €700 × 1.20	€840
Limit with a 15% cap: €700 × 1.15	€805
Comparative rent according to the rent index: 80 m² × €10.25	€820
Permitted at 20% (lower of €840 and €820)	€820, i.e. €70 more
Permitted at 15% (lower of €805 and €820)	€805, i.e. €55 more

If your landlord demands €840, the request is only justified up to €820 with a 20% cap, and only up to €805 with a 15% cap. You do not have to agree to anything beyond the permitted part (Sec. 558 (1) and (3), Sec. 558b (1) BGB).

Is a rent increase of 100 euros permitted?

There is no fixed limit in euros. Whether €100 is permitted depends on your starting rent and the comparative rent. With a starting rent of €700, the cap allows no more than €140 (20%) or €105 (15%) more in 3 years. With a starting rent of €500, it is no more than €100 (20%) or €75 (15%). In both cases, the new rent may also not exceed the comparative rent.

Are 20 percent in 3 years allowed? Yes, if no 15 percent ordinance applies in your municipality and the new rent does not exceed the comparative rent.

Rent brake and excessive rent in brief

The rent brake (Mietpreisbremse, Sec. 556d et seq. BGB) limits the rent when a new tenancy agreement is concluded in designated areas, not the increase in an ongoing contract. The states' ordinances must expire at the end of 31 December 2029 at the latest (Sec. 556d (2) BGB). For graduated rent, however, it applies to each individual step (Sec. 557a (4) BGB), and for index-linked rent only to the starting rent (Sec. 557b (4) BGB). Irrespective of this, a rent that exceeds the usual charges by more than 20% by exploiting a low supply is an administrative offence (Sec. 5 WiStG 1954).

How must the rent increase be justified?

An increase up to the comparative rent must be requested and justified in text form (Sec. 558a (1) BGB). Text form means: legible, with the name of the person making the declaration, on a durable medium (Sec. 126b BGB). So a letter without a signature or an email is enough. The letter must come from all landlords and be addressed to all tenants named in the contract.

To justify the increase, the landlord can rely on (Sec. 558a (2) BGB):

1. a rent index,
2. information from a rent database,
3. a reasoned report by a publicly appointed and sworn expert,
4. the rents of at least three comparable flats.

Which rent index applies? If there is a qualified rent index for your municipality with information for your flat, the landlord must state this information in the letter, even if they rely on another means of justification (Sec. 558a (3) BGB). What matters is the rent index in force when the declaration is made. If there is no current one, an older one or that of a comparable municipality may also be used (Sec. 558a (4) BGB).

Property management: If a property management company or a lawyer sends the increase and no original power of attorney is enclosed, you can reject the letter without delay (Sec. 174 BGB).

Which deadlines apply to a rent increase?

Once the request for an increase has been received, fixed deadlines run (Sec. 558b BGB). What counts for the start is when the letter reached you, not the date on it.

The month of receipt, March, does not count. April is the first and May the second month after receipt. If you do not consent by 31 May, the landlord can sue for consent until 31 August (Sec. 558b (2) BGB). If they miss this deadline, they have to make a new request for an increase.

Special right of termination: If the landlord requests an increase up to the comparative rent or because of modernisation, you can give extraordinary notice until the end of the second month after receipt, with effect from the end of the month after next. The increase then does not take effect (Sec. 561 (1) BGB).

Rent increase after modernisation

After a modernisation, the landlord may increase the annual rent by 8% of the costs incurred for your flat (Sec. 559 (1) BGB). They must deduct the costs of mere maintenance, i.e. repairs (Sec. 559 (2) BGB). Only certain measures can be passed on, above all those that save final energy or water, increase the utility value or permanently improve living conditions (Sec. 559 (1), Sec. 555b BGB).

Cap: Within 6 years, the rent may rise by no more than €3 per m² of living space as a result of modernisations, and by no more than €2 if the rent is below €7 per m² (Sec. 559 (3a) BGB).

Example: Your 70 m² flat is allocated €20,000 of modernisation costs after deducting maintenance. 8% of this is €1,600 a year, i.e. €133.33 a month or around €1.90 per m². That is below the cap of €3 per m² and also below the cap of €2 per m², provided there has been no other modernisation increase in the last 6 years.

Announcement: The landlord must announce the modernisation in text form no later than 3 months before it starts (Sec. 555c (1) BGB). The increase applies from the third month after receipt of the declaration of increase. If the correct announcement is missing, or the increase is more than 10% above the announced amount, this is postponed by 6 months (Sec. 559b (2) BGB).

Hardship objection: If the increase would be unreasonable hardship for you, you can raise this objection. You must notify the objection in text form by the end of the month following receipt of the modernisation announcement (Sec. 555d (3), Sec. 559 (4) BGB).

Graduated rent and index-linked rent

With both, the tenancy agreement already sets out how the rent develops, so no consent is needed.

Graduated rent: The rent rises on fixed dates by euro amounts that must be stated in the contract. There must be at least one year between two steps, and increases up to the comparative rent or because of modernisation are excluded while the graduated rent applies (Sec. 557a (1) and (2) BGB). Your right to give notice can be excluded for no more than 4 years from the conclusion of the graduated rent agreement (Sec. 557a (3) BGB).

Index-linked rent: The rent follows the consumer price index. The landlord declares the change in text form with the index figures and the new rent, and it applies from the month after next following receipt (Sec. 557b (3) BGB). There is no cap. How to check the calculation is explained in the guide Index-linked rent, and background is provided in our article Inflation and index-linked rent.

Special cases

Rent increase for long-standing tenants

There is no special right for long-standing tenants. Long tenancies are often well below the comparative rent, which is why increases are common here. You are protected by the same limits as everyone else: the cap, the comparative rent and the waiting period. A hardship objection only exists for modernisation, not against the comparative rent.

Rent increase after a change of owner

If your flat is sold, the new owner takes over the tenancy agreement as soon as they are entered in the land register (Grundbuch) (Sec. 566 BGB). They may only increase the rent under the same conditions as the old owner, and the waiting period and cap continue to run. The sale is not a ground for an increase in itself. If a notice is threatened after the sale, the guide on the notice for own use will help.

Defects in the flat

Defects do not usually prevent an increase up to the comparative rent. However, you can reduce the rent for as long as the defect exists. Notify the landlord of defects in writing.

Social housing

The rules on the comparative rent do not apply to rent-controlled housing. Here, the rent is governed by the law on housing subsidies, often by what is known as the cost rent (Kostenmiete).

Received a rent increase: how to respond correctly

You have three options:

• Consent: if the increase is formally correct and the amount is right. The new rent applies from the third month after receipt.
• Partly consent: if only part is justified, for example up to the cap.
• Do not consent: if the request is invalid. The landlord then has to sue or make a new request.

Three common mistakes:

1. Simply carrying on paying or immediately transferring more, without having checked the letter. A payment can also count as consent.
2. Letting the deadline pass without responding. You then face a claim for consent.
3. Calculating the cap incorrectly, for example using the current rent instead of the rent 3 years ago.

What exactly you need to watch out for when consenting or refusing is clarified by a tenancy lawyer on the basis of your letter.