Housing · Jurisdiction DE

Types of rent increase

Comparative rent, an index-linked rent and a stepped rent are three ways to change the rent. They generally do not apply side by side.

In more detail

A stepped rent under section 557a states future rent amounts, or increases in money, at least one year apart. An index-linked rent under section 557b ties the rent in writing to the consumer price index for Germany published by the Federal Statistical Office. While that clause runs, an increase under section 558 is excluded. An increase up to the local comparative rent under section 558 needs a statement of reasons in text form. The tenant does not start paying more merely because the letter arrived.

Background

As of the text of Civil Code section 558 (3): within three years the rent, apart from increases under sections 559 to 560, may not rise by more than 20 percent. State governments may set a limit of 15 percent for municipalities where the supply of housing is at risk. Which limit applies at an address is not in Finmon. A tenants' association can read an increase letter. Finmon does not say whether to agree.

An example

The contract contains an index clause. A later letter that only cites the local comparative rent does not sit beside that clause. A different contract, with neither an index nor steps, can use the path in section 558. Two contracts, two mechanics.

A common misconception

Every rent increase follows the same percent cap, whatever the contract says.

Index and steps have their own rules and block the comparative-rent path while they run. The cap belongs to the path in section 558.

Source: BGB §§ 557a, 557b, 558. Last reviewed: 2026-10-31. Editorially reviewed on 2026-10-31. Next review 2027-10-31. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.