Index-linked rent: when inflation sets the rent
An index-linked rent rises and falls with consumer prices, and in exchange rules out increases to the rent index level.
Checked by Radif Partners · Editorial policy · Method
Index rent: new rent since the last adjustment
New rent on the 2026-08 index
€874.33
| Change | 2.86 % |
| More per month | €24.33 |
With an index-linked rent (Indexmiete) under Section 557b of the German Civil Code (BGB), landlord and tenant agree in writing that the rent follows the consumer price index for Germany published by the Federal Statistical Office (Destatis). No other index is allowed. The rent must stay unchanged for at least one year between adjustments. Each change is claimed by a notice in text form stating the change in the index and the new amount in euros, and applies from the start of the month after next following receipt. Increases to the local reference rent are excluded, modernisation surcharges are possible only in narrow cases, and the rent brake applies only to the starting rent. There is no increase cap. In August 2026 the index stood at 125.8 points, 2.9 % above the same month a year earlier. A rent of €950 last adjusted on the August 2025 figure therefore rises to €977.19, €27.19 more a month. If the notice arrives on 15 October 2026, the new rent is due from 1 December 2026.
How an index-linked rent works
An index-linked rent sets no fixed amounts, only a yardstick: the price index for the cost of living of all private households in Germany, compiled by the Federal Statistical Office and known as the consumer price index (Verbraucherpreisindex, VPI). Section 557b BGB allows no other index, neither a regional one nor a construction cost index. The agreement must be made in writing. When the index rises, the landlord may raise the rent in the same proportion; when it falls, the tenant may ask for a reduction.
The arithmetic is simple: new rent equals current rent times the new index value divided by the index value at the last adjustment. Destatis publishes the figures every month on a 2020 = 100 basis (consumer price index). The index measures the prices of a basket of goods, not the housing market, so an index rent can rise faster than local rents, as in 2022 and 2023, or more slowly.
Four rules for every adjustment
- Interval. The rent must stay unchanged for at least one year at a time. Increases under Sections 559 to 560 BGB are disregarded and do not interrupt the period.
- Text form. The change is claimed by a notice in text form (Textform). An unsigned letter or an e-mail is enough; a verbal announcement is not.
- Content. The notice must state the change in the index and the new rent or the increase as a sum of money. “Plus inflation” on its own achieves nothing.
- When it is due. The new rent is payable from the start of the month after next following receipt of the notice. There is no backdating.
A worked example with current figures
The net cold rent is €950.00. It was last adjusted on the index for August 2025, 122.3 points, and has applied since 1 December 2025. The landlord bases his new notice on the figure for August 2026, 125.8 points. That is 2.86 % more, so the new rent is €977.19, €27.19 more per month. If the notice arrives on 15 October 2026, the new rent is due from 1 December 2026. The one-year rule is met, since a year after the last change is 1 December 2026.
What an index rent means when inflation is high shows if you run the same amount two years earlier. From August 2021 to August 2022 the index rose by 7.0 %, taking the rent to €1,016.09; a year later it rose another 6.1 %, to €1,078.51. That is €128.50 more a month within two years, an increase of 13.5 %. Under an ordinary increase to the reference rent, the increase cap would have limited the rise to at most 20 % in three years; an index rent has no such cap.
The last twelve months
| Month | CPI 2020 = 100 | Same month a year earlier | Change | €1,000 after one year |
|---|---|---|---|---|
| August 2026 | 125.8 | 122.3 | 2.9 % | €1,028.62 |
| July 2026 | 125.6 | 122.2 | 2.8 % | €1,027.82 |
| June 2026 | 124.6 | 121.8 | 2.3 % | €1,022.99 |
| May 2026 | 125.0 | 121.8 | 2.6 % | €1,026.27 |
| April 2026 | 125.2 | 121.7 | 2.9 % | €1,028.76 |
| March 2026 | 124.5 | 121.2 | 2.7 % | €1,027.23 |
| February 2026 | 123.1 | 120.8 | 1.9 % | €1,019.04 |
| January 2026 | 122.8 | 120.3 | 2.1 % | €1,020.78 |
| December 2025 | 122.7 | 120.5 | 1.8 % | €1,018.26 |
| November 2025 | 122.7 | 119.9 | 2.3 % | €1,023.35 |
| October 2025 | 123.0 | 120.2 | 2.3 % | €1,023.29 |
| September 2025 | 122.6 | 119.7 | 2.4 % | €1,024.23 |
Over these twelve months the annual change ranged from 1.8 % (December 2025) to 2.9 % (April 2026). The last column shows what €1,000 becomes if the rent is adjusted exactly one year after the previous adjustment, using that month’s figure. The index rent calculator does the sum for any pair of months; use it to check that the landlord started from the right month, which is the month of the last adjustment, not the start of the lease.
What an index-linked rent rules out
- No increase to the rent index. Section 557b(2) sentence 3 BGB excludes increases under Section 558 BGB. If your rent is below the local reference rent, it stays there for as long as the index clause applies.
- Modernisation only by way of exception. An increase under Section 559 BGB or Section 559e BGB is only possible for building work the landlord carried out because of circumstances he is not responsible for. The exception to that is modernisation under Section 555b no. 1a BGB, meaning the installation of a heating system, which he may pass on. How such work has to be announced is explained on the modernisation notice page.
- Rent brake only at the start. In a municipality covered by a state ordinance under Section 556d BGB, the starting rent may exceed the reference rent by no more than 10 per cent. Later adjustments are outside the rent brake (Section 557b(4) BGB).
Service charges are unaffected by all of this: advance payments are adjusted after each annual statement, whatever the index does.
Index-linked or graduated rent?
Both models replace increases to the rent index with a rule written into the lease. A graduated rent (Staffelmiete) sets fixed amounts, and in rent-brake municipalities every step is checked against the ceiling; an index rent follows prices and is only checked at the start. When inflation is low an index rent often works out cheaper for tenants, when it is high, dearer. Section 557b BGB contains no notice waiver like the one allowed for graduated rents; whether your lease has a separate one depends on its other clauses.