What an index rent is
With an index rent (Indexmiete), the rent is linked to general price developments. If consumer prices rise, the rent may rise in the same proportion. If they fall, the rent can go down. The rules are in § 557b of the German Civil Code (BGB). Landlord and tenant can agree in writing that the rent is determined by the price index for the cost of living of all private households in Germany calculated by the Federal Statistical Office. Today this index is called the consumer price index for Germany (Verbraucherpreisindex, VPI or CPI).
Index rent agreements have become more common in large German cities in recent years. For landlords they are a hedge against inflation; for tenants they went largely unnoticed for years because inflation was low. That changed in 2022 and 2023, when the annual average CPI rose by 6.9% and 5.9%. Many households received noticeable rent increases within a short time. This guide explains how the new rent is calculated, when it applies and what to look out for. The index rent calculator gives you your personal result using the official monthly values.
The formula: rent and index change in the same proportion
The calculation itself is simple. The rent changes by the same percentage as the index:
New rent = current rent × new index value ÷ old index value
An example: your net rent (excluding service charges) is €800. At the last adjustment the index stood at 110.0; now it is 115.5. 115.5 ÷ 110.0 = 1.05, so the index has risen by 5%. The new rent is €800 × 1.05 = €840, which is €40 more per month and €480 more per year.
What matters is the percentage change, not the difference in index points. 5.5 points mean something different at an index level of 110 than at a level of 80. Anyone who treats the point difference as a percentage gets it wrong.
| Period (index months) | Old CPI | New CPI | Change | €800 becomes |
|---|---|---|---|---|
| January 2022 → January 2023 | 105.2 | 114.3 | +8.65% | €869.20 |
| August 2025 → August 2026 | 122.3 | 125.8 | +2.86% | €822.89 |
The values come from the monthly series of the Federal Statistical Office on the base 2020 = 100. The table shows how much the size of an adjustment depends on the inflation phase.
Which index months count?
The law does not prescribe specific months. In practice, the index level at the time of the last adjustment (for the first increase, the level at the start of the lease) is compared with the latest published value. Some leases fix specific months, for example the start of the lease as the base. So check your lease first.
Make sure both values come from the same series. The Federal Statistical Office moves the index to a new base year roughly every five years, most recently in early 2023 from 2015 = 100 to 2020 = 100. Values on different bases must never be compared with each other. Read more in our article The consumer price index explained.
When the new rent applies
An index rent does not change automatically. The landlord must claim the change by a declaration in text form (§ 557b(3) BGB). Two rules determine from when the new rent is payable:
- Month after next following receipt: the changed rent is payable from the start of the month after next following receipt of the declaration. If the letter arrives on 24 September, the new rent applies from 1 November. If it arrives on 1 October, only from 1 December.
- One-year rule: the rent must remain unchanged for at least one year each time (§ 557b(2) BGB). Increases for service charges or certain modernisations (§§ 559 to 560 BGB) do not count.
The later of the two dates applies. There is no retroactive increase. If a landlord has not adjusted the rent for years, they can only claim the increase for the future, but then the entire accumulated index rise in one go.
What the letter must contain
Text form means a legible declaration on a durable medium that names the person making it (§ 126b BGB). A letter is enough, and so is an email. A handwritten signature is not required. In terms of content, § 557b(3) BGB requires two details:
- the change in the price index that has occurred, usually the old and new index values,
- the new rent or the increase as an amount in euros.
If these details are missing, the declaration can be challenged. Our article Checking an index rent increase shows how to check a letter step by step. In the calculator, use the "Check landlord's letter" mode.
No cap, no comparative rent
Many tenants know the Kappungsgrenze: in a normal increase up to the local comparative rent, the rent may rise by at most 20% within three years, or 15% in areas with a tight housing market (§ 558(3) BGB). This cap does not apply to index rent.
The reason: during an index rent, an increase under § 558 BGB is expressly excluded (§ 557b(2) sentence 3 BGB). The cap belongs to exactly that type of increase. An index rent therefore follows the CPI alone, with no ceiling. Conversely, the landlord cannot raise the rent to the comparative rent even if market rents rise faster than inflation.
One outer limit remains: under § 5 of the Economic Offences Act (WiStG), it is an administrative offence to demand rents that exceed the usual rents by more than 20% by exploiting a low supply. For normal index adjustments this rarely matters.
Rent brake and modernisation
In areas with a rent brake (Mietpreisbremse), §§ 556d to 556g BGB only apply to the initial rent of an index rent (§ 557b(4) BGB). The rent at the start of the lease may therefore be at most 10% above the local comparative rent unless an exception applies. Later index increases are no longer measured against it. Details are in our article Index rent and the rent brake.
Modernisation surcharges are restricted under an index rent. The landlord can only demand an increase under § 559 or § 559e BGB insofar as the building work was carried out due to circumstances beyond their control. An exception applies to modernisations under § 555b no. 1a BGB, i.e. installing a heating system. Service charges are independent of all this and are adjusted under § 560 BGB.
Can the rent go down?
Yes. The rent is determined by the index, in both directions. If the CPI falls below the level at the last adjustment, you as a tenant can demand the reduction yourself in text form. The one-year rule and the "month after next following receipt" date apply here too. Based on annual averages, the CPI has risen every year since 2015, so a reduction is more likely in periods of falling prices, for example after an energy price shock.
Common mistakes in practice
- Points instead of percent: the point difference is treated as a percentage.
- Wrong starting value: the old index is not taken from the month of the last adjustment. If it lies before the last adjustment, the increase comes out too high because part of the rise is counted twice.
- Mixed base years: an old value on base 2015 is compared with a new value on base 2020.
- Date too early: the new rent is demanded from the following month or before the one-year period has passed.
- Increase without an amount: the letter only states a percentage but no euro amount.
Is an index rent worthwhile for tenants?
It depends on inflation. In calm times, index rents often rise more slowly than comparative rents in popular cities. In periods of high inflation, however, they rise quickly. A comparison with graduated rent is in our article Index rent or graduated rent?. How prices have developed overall is shown by the inflation calculator. If the rent becomes a burden, check with the housing benefit calculator whether you are entitled to a subsidy, and get an overview of your budget with the cost of living calculator.
This article is not legal advice. In disputes about the validity of the clause or the amount of the increase, tenants' associations, landlords' associations and tenancy lawyers can help.