Index and graduated rents in Germany (Indexmiete, Staffelmiete)

Why these two exist

Besides rises you agree on, the landlord may raise rent only under §§ 558 to 560 BGB, unless a rise is excluded by agreement (§ 557 (3)). Section 557 (2) adds that future changes in rent can be agreed as a graduated rent under § 557a or an index rent under § 557b. They replace the usual rise to the comparative rent: with either, the landlord cannot use that route.

Graduated rent (§ 557a)

Form. The rent for particular periods is agreed in writing, and the agreement must state each rent or each increase as an amount in euros (§ 557a (1)). A clause saying “the rent rises by a percentage” without an amount does not meet the wording.

Minimum step length. The rent must stay unchanged for at least one year at a time (§ 557a (2)).

Other rises excluded. During a graduated rent, increases under §§ 558 to 559b are excluded (§ 557a (2)). That means no rise to the comparative rent and no modernisation rise while the steps run. A change in service-charge prepayments under § 560 is not in that range of sections.

Termination. The tenant’s right to terminate can be excluded for at most four years from the agreement; termination is permitted at the earliest at the end of that period (§ 557a (3)).

Rent brake. The rent brake applies to every step, and for the second and later steps the reference date is the date the first rent of the step falls due, instead of the start of the tenancy. A rent validly established in an earlier step stays (§ 557a (4)). See rent brake.

A worked calculation (formula): with a starting rent of €800, a step of €30 after one year and another of €30 after two years, the rent becomes €830, then €860. The lease has to state the €830 and €860 or the €30 amounts in euros.

Index rent (§ 557b)

What it follows. The parties may agree in writing that the rent is determined by the consumer price index for all private households in Germany, calculated by the Federal Statistical Office (§ 557b (1)).

Minimum interval. During an index rent the rent must remain unchanged for at least one year at a time, apart from rises under §§ 559 to 560 (§ 557b (2)).

Other rises. A rise to the comparative rent under § 558 is excluded (§ 557b (2)). A modernisation rise under § 559 or § 559e can be demanded only to the extent the landlord carried out structural work because of circumstances beyond the landlord’s responsibility, unless the work was a modernisation under § 555b No. 1a.

How a change is made. The landlord must declare it in text form, stating the change in the index and the resulting rent or rise as an amount in euros (§ 557b (3)). The changed rent is due from the beginning of the second month after the declaration is received (a declaration received in March means the new rent from 1 May).

A worked calculation (a formula, not a prediction): new rent = old rent x (current index / index at the last rent level). With a rent of €1,000 and an index that has risen 2.0% since the last change, the rent can rise to €1,020, provided the declaration states the index change and the amounts.

Rent brake. For an index rent the rent brake applies only to the starting rent (§ 557b (4)).

Which should you accept?

The Code does not say that one is better. A graduated rent gives a known path; an index rent depends on inflation, which can be higher or lower than the market. Before you sign, ask whether your lease states the euro amounts, how many years it fixes, and whether it contains a clause that excludes your right to terminate for the four-year maximum.

An agreement to the tenant’s disadvantage departing from these two sections is void (§ 557a (5), § 557b (5)).

What is proposed, not law

The cabinet adopted a draft law (“Miete II”) on 29 April 2026. According to the Federal Ministry of Justice, in tight housing markets only half of any price-index rise above 3.0% a year could be passed on to the tenant. The page does not give an entry-into-force date. Until a law is passed and promulgated, § 557b applies as described above. Treat the draft as an intention, not a rule.

What differs by state

Nothing in §§ 557 to 557b varies by state. The only state element is the rent brake: whether your municipality is in a designated area is set by state ordinance. If it is, the rent brake tests the starting rent (and each step of a graduated rent).

Which professional to consult

A tenants’ association or a lawyer specialised in tenancy law can read a rent clause before you sign. A property valuer can say what comparable rents are. Payotte does not recommend individuals.