Rent Increase in Germany [Tenant Rights And Regulations]

Key takeaways

• Landlords must adhere to the “deadlines” and the “maximum rent increase limits” when increasing rent.
• Rent increase limits depend on the reason for the rent increase and your rental contract.
• You have two full months to consider the rent increase. During this period, you have the special right to terminate the contract.

This is how you do it

• Check if the rent increase is valid.
• Object in writing to the landlord if the rent increase is invalid or above the rent increase threshold.
• Get support from the tenant’s association or a lawyer if you have a conflict with the landlord.
• Legal protection insurance covers the lawyer’s cost and is one of the must-have insurance policies in Germany.

Table of Contents

Can landlords increase your rent in Germany?

Yes, the landlords have the right to increase your rent in Germany. However, there is a cap on how much rent the landlord can increase. This cap varies depending on your rental contract.

If your landlord increases the rent more than the allowed limit, you can object to it. You can even ask for reimbursement for the extra rent paid retroactively. 

How much rent can a landlord increase in Germany?

In the rental contract, you agree on one of the three options to increase the rent.

• Increase the rent as per Stafflemiete (Graduated rent)
• Increase the rent as per Indexmiete (Index-linked rent)
• Increase the rent as per local comparative rent (Ortsüblichen Vergleichsmiete)

How much rent the landlord can increase depends on the option you agreed to in your rental contract. 

Rent increase according to Stafflemiete

In Stafflemiete, you and the landlord agree on when and how much the rent will increase when signing the rental agreement. Here are its characteristics.

• The landlord does not have to justify the rent increase.
• There are no legal specifications on the maximum limits of the rent increase. However, if a “rent brake” (Mietpreisbremse) applies in your region, the landlord must adhere to it.
• The landlord can no longer increase the rent for other reasons, such as modernization, inflation, etc. Thus, when signing the rental contract, you (the tenant) know when and how much the rent will increase.

NOTE: Rent brake (Mietpreisbremse) only applies to new rental contracts, not existing ones. So, when signing the contract, you must check if the rent increases adhere to Mietpreisbremse.

A rent increase under Stafflemiete is permissible if the following requirements are met.

• The first rent increase may only occur 12 months after the signing of the rental agreement.
• There must be at least a 12-month gap between the current and the last rent increase.
• The rental agreement must specify the time of the rent increase(s).
• The new rent must be stated in the contract. Under tenant law, a percentage rent increase is not allowed.

Rent increase according to Indexmiete

In Indexmiete, the landlord and tenant agree on the rent increase when signing the rental contract.

Here are the characteristics of rent increase in Indexmiete.

• The rent increase is based on the consumer price index (Verbraucherpreisindex).  Federal Statistical Office calculates and publishes the consumer price index every year. 
• As the rent increase is based on inflation, you don’t know how much it’ll increase when signing the contract.
• The landlord can also increase the rent after carrying out modernization measures.
• A rent increase based on the local rent index (Örtlichen Mietspiegels) is not permitted.

A rent increase under Indexmiete is permissible if the following requirements are met.

• The landlord must inform the tenant about the rent increase in writing.
• The landlord must specify the new rent amount.
• The landlord must explain how the new rent is calculated.
• There must be at least 12 months gap between each rent increase.

Rent increase based on local comparative rent

As per Section 558 of the German Civil Code (BGB), the landlord can increase the rent up to the local comparative rent. However, this is possible if the rent increase per Stafflemiete or Indexmiete is not agreed on in the tenancy agreement.

Here are the characteristics of rent increase per local comparative rent.

• Your local municipality publishes the rent index (Mietspiegel) every two years. It consists of the rents of comparable properties over the last four years.
• The landlord can increase the rent every 12 months. However, after 12 months have passed, the landlord must give two full months’ notice to the tenant. Thus, a rent increase can only occur every 15 months. 

A rent increase per rent index is permissible if the following requirements are met.

• The landlord cannot increase the rent by more than 20% within three years. This is called the rental cap (Kappungsgrenze). The rental cap is even lower (15%) in some federal states.
• The landlord must inform the tenant about the rent increase in writing (letter, fax, or e-mail). The landlord’s signature is not required if informed via fax or email.
• The landlord must justify the rent increase based on the rent index or listing the rents of three comparable properties.
• The landlord must give the tenant two full months’ notice.

Rent increase due to modernization measures

Different rental caps apply to the properties that underwent modernization. These rent increase limits are set out in the law and apply nationwide (Section 559, Paragraph 3a BGB).

NOTE: Rent brake (Mietpreisbremse) doesn’t apply to the properties that underwent heavy modernization.

Here are the rent increase limits.

• The rents of modernized apartments may not increase by more than 3€ per m2 within six years.
• Properties with rents up to 7€ per m2 may not increase the rent by more than 2€.
• If the landlord replaced the heating system, a new rental cap applies since January 1, 2024. The landlord must not increase the rent by more than 50 cents per m2 of living space (Section 559e Paragraph 3 of BGB).
• The landlord doesn’t require the tenant’s consent to increase the rent after modernization.

The rent increase due to modernization is subject to the following conditions:

• Per “Section 559 of BGB”, landlords can increase the annual rent by up to 8% of the modernization costs. The costs include wages for tradesmen, construction costs, architects’ fees, etc.
• If several apartments in an apartment building have been renovated, the landlord must distribute the costs appropriately among all tenants.
• Suppose the landlord received government funding for modernization. This funding must be considered in favor of the tenants when calculating the rent increase.
• The landlord must inform the tenant 3 months before the modernization. The landlord must inform the tenant about all the modernization measures, such as start date, extent of rent increase, future operating costs, etc.
• You (the tenant) have the right to object to the rent increase in hardship cases. The landlord must also inform you about your right to object.
• The landlord can only increase the rent after 2 months of modernization completion. The tenant must be informed of this separately.

When is a rent increase invalid in Germany?

According to Section 558a of the German Civil Code (BGB), a rent increase is only valid if the landlord gives it in writing (letter, fax, or email). The landlord’s signature is not required if informed via fax or email.

The landlord didn’t adhere to the “rent increase” deadlines

The landlord must adhere to the “rent increase” deadlines. Otherwise, the rent increase is invalid.

• The landlord must not increase the rent until 12 months after moving into the rental property.
• There should be at least 12 months between the last and the new rent increase.
• The landlord must give two full months’ notice to the tenant about the rent increase.

Exception: No deadline applies if the rent increase is due to the modernization of the property.

The landlord didn’t justify the rent increase.

The landlord must justify any rent increase. Otherwise, it’s invalid. There can be one of four reasons for the rent increase.

• The rent increase was agreed upon when signing the rental contract, such as Staffelmiete or Indexmiete.
• Rent increase to match the local comparative rent
• Rent increase due to modernization
• Rent increase due to higher operating costs

Tenant’s consent for the rent increase

The landlord needs the tenant’s consent to increase the rent. The tenant may only refuse the increase if it is unlawful.

You (the tenant) have two full months to consider the rent increase. During this period, you have the special right to terminate the rental contract.

If you refuse the rent increase altogether, the landlord can enforce the rent increase by suing you.

Cancel the rental contract and offer a new one

​According to Section 573 Paragraph 1 of the German Civil Code (BGB), the landlord cannot terminate your existing rental contract and offer a new one with increased rent.

Sale of the rental property

If the property is sold, the new owner becomes the tenant’s new contractual partner. The new owner must comply with the terms mentioned in the old rental agreement. Thus, the sale itself is not a reason to increase the rent.

Death of the family member named as the tenant in the rental contract

If a family member who was the main tenant in the rental contract dies, their spouse, children, or relatives living in the same rental property take over the tenancy.

If the spouse or children living in the same rental property don’t take over the tenancy, heirs take over the rental agreement. In this case, heirs and landlords have a one-month right of termination.

What should you do if the rent increases?

You should check the following when you recieve the rent increase letter from your landlord.

• Is the rent increase within the allowed thresholds/limits?
• The rent increase occurs only after a two-full month notice period. During this period, you can use your special right of termination.
• The gap between the rent increase and the last increase is at least 12 months.
• If the rent increase is due to modernization, no deadline applies.

If the rent increase exceeds the limits, you should point it out to the landlord in writing. You should mention the maximum rent the landlord is permissible to increase in your letter.

NOTE: A violation of the “rent increase limit” doesn’t mean the entire rent increase is invalid. You can only reduce the rent to the permissible amount.

If you refuse to agree to the rent increase altogether, you risk being sued by the landlord. In such a case, the court will order you to agree to the rent increase up to the permissible amount – unless the increase is invalid for other reasons.

If your landlord disagrees with your calculations, you can get support from a tenant’s association or hire a lawyer. If you have legal insurance, hiring a lawyer is the quickest way to resolve the issue.

Rent brake (Mietpreisbremse) vs Rent cap (Kappungsgrenze)

Rent brake (Mietpreisbremse)	Rent cap (Kappungsgrenze)
As per Mietpreisbremse, the landlord can ask for rent up to 10% higher than the local comparative rent.	As per Kappungsgrenze, the landlord cannot increase the rent by more than 20% of the current rent within three years. In some federal states, the limit is 15%.
The Rent Brake (Mietpreisbremse) applies before the rental agreement is signed. This prevents landlords from demanding unreasonably high rents for new rentals.	The rent cap (Kappungsgrenze) applies when a rental agreement already exists. This prevents landlords from increasing the rent too quickly and too much.
Mietpreisbremse doesn’t apply nationwide. Federal states can decide whether a Mietpreisbremse makes sense or not.	Kappungsgrenze applies nationwide. Federal states can reduce it further at their discretion.
Mietpreisbremse applies to apartments that were built before October 1, 2014. It doesn’t apply to new or extensively renovated properties.	It applies to all rental properties regardless of the construction year or renovation status.

In which cases does the rent brake (Mietpreisbremse) not apply?

• If the rent has already reached the rent brake limit, it remains the same. For example, suppose the previous tenant’s rent was already more than ten percent above the local comparative rent. In this case, the landlord cannot increase the rent further for the new tenant.
• The landlord modernized the property in the last three years before the start of the tenancy. In this case, the rent brake doesn’t apply.
• Rent brakes don’t apply to new buildings first rented after October 1, 2014 (Section 556f, sentence 1 of the German Civil Code).

References

• https://www.services-hammer.de/blog2/was-ist-der-unterschied-zwischen-mietpreisbremse-und-der-kappungsgrenze-beim-vermieten
• https://www.mietrecht.com/staffelmiete/
• https://www.finanztip.de/mietwohnung-modernisierung/
• https://www.advocado.de/ratgeber/mietrecht/mieterhoehung/maximale-mieterhoehung.html
• https://www.klugo.de/rechtsgebiete/mietrecht/mieter/mieterhoehung
• https://www.finanztip.de/kappungsgrenze/