Rent increase cap: the second limit on every rent rise
Even where the reference rent would allow more, your rent may only rise by a fixed percentage within three years.
Checked by Radif Partners · Editorial policy · Method
Increase cap: your upper limit
Maximum after three years
€690
| At most more per month | €90 |
| At most more per year | €1,080 |
The reference rent may set a lower limit.
The cap on rent increases (Kappungsgrenze) in Section 558(3) of the German Civil Code (BGB) limits rises towards the local reference rent: within three years the rent may go up by no more than 20 per cent, or 15 per cent where the supply of rental housing is especially at risk. Each state government designates those areas by ordinance for at most five years. In October 2026, 14 of the 16 states have such an ordinance, covering 721 municipalities between them; Saarland and Saxony-Anhalt have none and stay at 20 per cent. The base is the rent owed three years before the date the increase is to take effect. Increases for modernisation and service charges under Sections 559 to 560 are left out. Example: €700 three years ago, later an increase to €735 plus a modernisation surcharge of €40. With a 15 per cent cap the rent can reach at most €845.00, €70.00 more than now; with 20 per cent it would be €877.50.
Two ceilings, and the lower one wins
A rent increase under Section 558 BGB has to clear two hurdles. The new rent may not exceed the local reference rent, usually taken from the qualified rent index. And it may not rise by more than the cap within three years. If your rent is far below the index, for instance because you have lived in the flat for many years, the cap is usually the tighter limit. It stops a long-standing tenant from being lifted to market level in one go.
The cap is 20 per cent. It falls to 15 per cent where an adequate supply of rental housing on reasonable terms is especially at risk in a municipality or part of one, and the state government has designated that area by ordinance (Verordnung). Each ordinance lasts at most five years; without a successor the federal figure applies again.
Which states have lowered the cap
In October 2026, 14 states have a cap ordinance. Berlin, Bremen and Hamburg are each covered as a whole, although in Bremen only the city of Bremen counts, not Bremerhaven. The longest list belongs to Bavaria, with 284 municipalities. Some states bundle the cap with the rent brake and the notice ban after conversion to condominiums in a single tenant protection ordinance; others use separate ordinances with their own dates. That is why a town can have the lower cap without the rent brake, as everywhere in Schleswig-Holstein.
| State | Municipalities at 15 % | In force since | Runs until |
|---|---|---|---|
| Baden-Württemberg | 130 | 1 January 2026 | 31 December 2026 |
| Bavaria | 284 | 1 January 2026 | 31 December 2029 |
| Berlin | 1 | 11 May 2023 | 10 May 2028 |
| Brandenburg | 36 | 1 January 2026 | 31 December 2030 |
| Bremen | 1 | 1 September 2024 | 31 August 2029 |
| Hamburg | 1 | 1 September 2023 | 31 August 2028 |
| Hesse | 49 | 26 November 2020 | 25 November 2026 |
| Mecklenburg-Western Pomerania | 10 | 1 October 2023 | 30 September 2028 / 18 March 2031 |
| Lower Saxony | 57 | 1 January 2025 | 31 December 2029 |
| North Rhine-Westphalia | 57 | 1 March 2025 | 28 February 2030 |
| Rhineland-Palatinate | 29 | 1 October 2024 | 30 September 2029 |
| Saxony | 2 | 1 July 2025 | 30 June 2027 |
| Schleswig-Holstein | 62 | 1 May 2024 | 30 April 2029 |
| Thuringia | 2 | 1 October 2019 | 30 September 2029 |
| Saarland | 0 | no ordinance | 20 % applies |
| Saxony-Anhalt | 0 | no ordinance | 20 % applies |
Mecklenburg-Western Pomerania has two ordinances with different end dates, hence two dates in its row. In Rhineland-Palatinate the ordinance names districts, so the number of municipalities comes from the official register of municipalities. Time is short in Hesse (25 November 2026), Baden-Württemberg (31 December 2026) and Saxony (30 June 2027): without a follow-up ordinance the cap there returns to 20 per cent. The rent increase calculator checks your municipality against the date of the increase letter, and state pages such as Schleswig-Holstein cite the ordinance and where it was published.
Which rent is the starting point
The cap looks backwards. Start from the date the new rent is meant to apply, which is the beginning of the third calendar month after the demand reaches you (Section 558b(1) BGB). Go back three years from there and take the net cold rent (rent without service charges) owed on that day. Every increase under Section 558 that has taken effect since then counts against the cap; whatever has been used up is no longer available for the next increase.
Increases under Sections 559 to 560 BGB do not count: the modernisation surcharge, the surcharge after a new heating system, and adjustments of service-charge advances or flat rates (Section 560 BGB). They do not eat into the cap, but they are not stripped out for the reference-rent test either: there, the whole rent of the modernised flat is compared with similar flats.
A worked example with modernisation
A flat of 65 m² in a municipality with the lower cap. The increase letter arrives on 20 October 2026, so the new rent would apply from 1 January 2027. On 1 January 2024 the net cold rent was €700. Since then there has been one increase under Section 558 to €735 and, after building work, a modernisation surcharge of €40, so the tenant now pays €775. We assume a reference rent of €13.50 per m².
| Step | 15 % | 20 % |
|---|---|---|
| Rent on the date three years earlier | €700.00 | €700.00 |
| plus the cap | €105.00 | €140.00 |
| of which already used by the earlier increase | €35.00 | €35.00 |
| plus modernisation surcharge (not counted) | €40.00 | €40.00 |
| Ceiling from the cap | €845.00 | €880.00 |
| Ceiling from the reference rent (65 m² times €13.50) | €877.50 | €877.50 |
| Lawful new rent | €845.00 | €877.50 |
| Rise compared with today | €70.00 | €102.50 |
At 15 per cent the cap is the tighter limit and the tenant pays no more than €845.00 from now on. At 20 per cent €877.50 would be possible, because the reference rent then takes over as the limit. The difference of €32.50 a month shows what the state ordinance is worth to a tenant. Had the modernisation taken place more than three years ago, the surcharge would already be part of the starting rent and would be capped along with it.
What else the landlord has to respect
- Waiting periods. The demand may come no earlier than 12 months after the last increase under Section 558, and the rent must have stayed unchanged for 15 months when the new one applies. Modernisation and service-charge increases do not restart this clock.
- Text form and reasons. The letter has to be justified under Section 558a BGB, by a rent index, a rent database, an expert report or three comparable flats. It need not work out the cap for you; checking that is up to you.
- Time to decide. You have until the end of the second calendar month after receipt. If only part of the increase is lawful, you can agree to that part and refuse the rest.
There is no cap for graduated or index-linked rents, because increases under Section 558 are excluded there; their limits are explained on the pages on graduated rent and index-linked rent. How to check an increase letter as a whole is covered on the rent increase page.