Rent brake (Mietpreisbremse): the 10% cap on new rents

What the rule says

When a residential lease is signed for a home in a designated area, the rent at the start of the tenancy may not exceed the local comparative rent (ortsübliche Vergleichsmiete, defined in § 558 (2) BGB) by more than 10% (§ 556d (1)). The comparative rent is formed from the usual rents agreed or changed in the last six years for comparable homes in the same or a comparable municipality, taking into account type, size, equipment, condition, location and energy quality. Most towns publish it in a rent index (see local rent index).

So, as a formula: maximum starting rent = comparative rent x 1.10. A worked calculation, not a quote of any real flat: if the comparative rent for a home is €900 a month, the starting rent could be at most €990 in a designated area, unless an exception applies.

Who decides where it applies

The Civil Code does not list any towns. Under § 556d (2) the state governments are authorised to designate, by ordinance, areas with a tight housing market. Such an area exists where the adequate supply of rental homes at reasonable terms is particularly at risk in a municipality or part of one. The Code gives examples: rents rising markedly faster than the national average, rent burdens clearly above the national average, population growth without enough new building, or low vacancy with high demand. The ordinance must contain reasons, show the facts, and state what measures the state will take to remedy the shortage.

Each ordinance must expire by the end of 31 December 2029 at the latest. According to the Federal Government, the extension law that came into force on 23 July 2025 pushed back the earlier end of 2025 by four years. Because the list of municipalities differs from state to state and can change, check the current ordinance of your state; a rule in one state’s capital says nothing about a town in another. Payotte’s state overview does not substitute for the ordinance text.

Exceptions

Four situations let the landlord charge more than the 10% limit:

1. Previous rent. If the previous tenant’s last rent was higher than the permitted rent, a rent up to the previous rent may be agreed (§ 556e (1)). Rent reductions and rises agreed with the previous tenant in the last year before the tenancy ended are ignored when working out that previous rent.
2. Recent modernisation. If the landlord carried out modernisation in the three years before the tenancy began, the permitted rent may be exceeded by the amount a modernisation rise under § 559 would allow (§ 556e (2)).
3. New build. The brake does not apply to a home first used and let after 1 October 2014 (§ 556f sentence 1).
4. First letting after comprehensive modernisation (§ 556f sentence 2).

What the landlord must tell you

If the landlord relies on the previous-rent exception or another exception, § 556g (1a) obliges the landlord to inform you without being asked, before you make your declaration to enter the lease, of: the amount of the previous rent; that modernisation took place in the last three years, that the home was first used and let after 1 October 2014, or that it is the first letting after comprehensive modernisation. If the landlord does not do so, the landlord cannot rely on the exception. If the information is given late in the required text form, the landlord can rely on it only two years after providing it. All statements under this part must be in text form (§ 556g (4)).

You can also ask the landlord for information on the facts that decide whether the agreed rent is allowed, as far as they are not generally accessible and the landlord can give them without difficulty (§ 556g (3)).

Getting money back

A rent clause above the permitted rent is void only for the excess; the rest of the lease stands (§ 556g (1)). Overpaid rent is returned under the rules on unjust enrichment. But you may reclaim it only if you have objected (gerügt) to the breach (§ 556g (2)). If you object more than 30 months after the tenancy began, or after it already ended, you can only reclaim rent that falls due after the objection arrives. In practice, objecting early matters more than anything else.

Staggered and index rents

For a graduated rent each step is tested separately, with the date the first rent of that step falls due as the reference (§ 557a (4)); for an index rent the brake applies only to the starting rent (§ 557b (4)). See index and graduated rents.

Proposals, not law

A bill from the federal government of April 2026 (“Mietrecht II”) would, among other things, limit pass-on of index rises in tight markets and regulate furnished-flat surcharges. The Federal Ministry of Justice’s page describes it as a draft adopted by the cabinet on 29 April 2026. It is proposed, not in force, and should not be treated as law.

Which professional to consult

For a dispute about the comparative rent, a property valuer or a tenants’ association can help; a lawyer specialised in tenancy law can send the objection. Payotte does not rank or recommend individuals.