Mieterhöhung in Germany: The Kappungsgrenze, Comparable Rent, and the Modernisation Surcharge

A German landlord raising the rent on an existing tenancy has to work inside one of two separate legal frameworks, and confusing the two is one of the most common mistakes tenants and landlords both make. One framework moves the rent up toward what comparable local dwellings already cost. The other lets the landlord pass on part of the cost of a genuine improvement to the building. They have different timing rules, different ceilings, and different paperwork, and a demand that mixes them up is vulnerable to challenge.

This page works through both routes: the ortsübliche Vergleichsmiete increase under § 558 BGB, with its Kappungsgrenze ceiling, and the modernisation surcharge under § 559 BGB, with its own separate euro per square metre caps. It also covers the form a rent increase demand has to take, the tenant's response deadline, what happens if the tenant refuses, and the special termination right that follows a modernisation announcement.

Information last verified on 20 July 2026. This page provides general legal information and does not constitute legal advice in an individual case.

Two rules, two different ceilings

The comparable rent route under § 558 BGB answers one question: is the current rent below what similar dwellings in the same area already command. If so, the landlord can catch the rent up to that level, subject to the Kappungsgrenze.

The modernisation surcharge under § 559 BGB answers a different question entirely: has the landlord spent money genuinely improving the building, as opposed to just maintaining it. If so, part of that spending can be converted into a permanent rent increase, subject to its own separate euro per square metre caps.

The two can apply to the same building in the same year, and § 558 Abs. 2 expressly disregards § 559 increases when it calculates how long the rent has been unchanged. But they are assessed, evidenced, and capped completely separately, and a landlord cannot use one form of paperwork to justify the other.

The comparable rent route: § 558 BGB

A § 558 demand has a built in cooldown. The rent must have been unchanged for at least 15 months by the date the new rent is meant to take effect, and the demand itself cannot be made earlier than 12 months after the last increase took effect. In practice this means a landlord who raised the rent in January cannot serve a new § 558 demand before the following January, and the increase cannot bite before roughly three months after that.

The ortsübliche Vergleichsmiete itself, under § 558 Abs. 2, is built from what has actually been agreed or changed, in the past six years, for comparable dwellings in the same municipality or a comparable one, judged by type, size, fittings, condition, location and energy standard. Subsidised housing with a legally fixed rent is excluded from the comparison entirely.

The Kappungsgrenze

Even where the comparable rent is well above the current rent, § 558 Abs. 3 stops the increase from landing all at once. The Kappungsgrenze limits a § 558 increase to 20 percent over any three year period. In an area a Land government has designated, by Rechtsverordnung, as facing a particularly tight supply of affordable rental housing, that cap drops to 15 percent, and the designation itself is only valid for up to five years at a time before it has to be renewed or lapses.

This area designation is the one part of this topic that genuinely varies by location, and it is worth being honest about what that means for a page like this one. A static list of which cities currently sit inside a 15 percent zone would be out of date within months, since these ordinances are reissued, revised and occasionally allowed to expire. The reliable way to check a specific address is to look up whether the relevant Land ministry responsible for housing has an active Kappungsgrenzenverordnung in force for that municipality, or to ask a local Mieterverein, rather than relying on a list published anywhere else, including here.

Worked example

Take a 70 square metre apartment renting at 700 euro a month, and a landlord who can evidence, through a qualified Mietspiegel, that comparable local dwellings command 900 euro. The gap looks like 200 euro, but the Kappungsgrenze intervenes before the comparison does.

In a standard area, the 20 percent cap allows the rent to rise to at most 840 euro in this round, even though the comparable figure would support 900. The remaining gap can only be closed through a later increase, itself subject to the same 15 month and 12 month timing rules and the same three year cap window. In an area designated for the reduced cap, the ceiling for this round drops further, to 805 euro.

Form and evidence: § 558a BGB

The demand itself must be in Textform, meaning it can be a letter, an email or comparable durable text, without needing a handwritten signature. It must also be reasoned, and § 558a limits the acceptable forms of reasoning to four: a Mietspiegel, whether simple or qualified; data from a certified Mietdatenbank; a reasoned report from a publicly appointed and sworn expert (Sachverständigengutachten); or a reference to at least three comparable dwellings.

Where a qualified Mietspiegel exists and contains data for the specific dwelling, the landlord has to disclose that data even when relying on one of the other three methods instead. Where a rent index expresses the comparable rent as a range rather than a single figure, a demanded rent that falls anywhere inside that range is sufficient.

The tenant's response: § 558b BGB

Once a valid demand arrives, the tenant has two calendar months from receipt to consent. If the tenant consents, the increased rent becomes payable from the start of the third calendar month after the demand was received, not immediately.

If the tenant does not consent, whether through an outright refusal or through simply not responding, the burden shifts to the landlord. The landlord can sue for the tenant's consent (Zustimmungsklage), but only within three further months after the tenant's own two month window closes. Missing that litigation deadline means the landlord has to start the process again from a fresh demand rather than simply refiling the same claim.

A demand that did not meet the § 558a form and reasoning requirements can still be corrected once litigation is underway, but the tenant keeps the full, undiminished two month response window regardless of when the correction happens. § 558b's own protective clause makes any agreement that shortens these periods to the tenant's disadvantage void.

The modernisation surcharge: § 559 BGB

Where a landlord has carried out qualifying modernisation work, § 559 Abs. 1 allows an annual rent increase of 8 percent of the eligible cost attributed to that specific dwelling. Qualifying work under § 555b typically includes things like energy efficiency upgrades, water saving installations, alterations that durably increase the usable value of the dwelling, and changes required by public law, among the categories that statute lists.

Not every euro spent counts toward that 8 percent. § 559 Abs. 2 excludes whatever share of the cost would have been needed anyway for ordinary maintenance, and requires that share to be estimated with reference to how worn the relevant building components already were. Where the work covers multiple units in the same building, § 559 Abs. 3 requires the total cost to be apportioned reasonably across them.

The Abs. 3a caps

Whatever the 8 percent calculation produces, § 559 Abs. 3a puts a hard ceiling on the monthly result. The general cap is 3 euro per square metre of living space over six years. Where the rent before the increase was already below 7 euro per square metre, the cap drops to 2 euro per square metre over the same six years.

The statute adds one further, narrower limit worth knowing about specifically: where the modernisation is the installation of a new heating system that also meets the statutory efficiency conditions in § 555b Nr. 1 or Nr. 1a, that particular portion of the increase is capped more tightly still, at 0.50 euro per square metre over six years, layered inside the general caps above rather than replacing them.

Worked example: the cap trimming the calculation

Take a 50 square metre unit where the eligible modernisation cost, after the maintenance deduction, comes to 25,000 euro apportioned to that unit. Eight percent of that is 2,000 euro a year, or roughly 166.67 euro a month.

The general cap for 50 square metres, at 3 euro per square metre, is 150 euro a month. Since the raw 8 percent calculation produces more than the cap allows, the landlord is limited to the capped figure of 150 euro, not the higher amount the percentage formula alone would suggest.

When a modernisation increase can be excluded or reduced

§ 559 Abs. 4 excludes the increase, in whole or in part, where it would mean a hardship for the tenant even after weighing the landlord's legitimate interests, taking the likely future operating costs into account too. That hardship weighing does not apply at all where the work merely brought the dwelling up to a generally standard condition, or where the landlord was not responsible for the circumstances that made the work necessary.

A hardship objection only counts if it was raised in the form and within the timeframe set out in § 555d, which generally means responding to the modernisation announcement itself rather than waiting until the increase demand arrives.

The modernisation announcement and the tenant's special termination right

Before any modernisation work covered by § 559 begins, § 555c requires the landlord to announce it in text form at least three months in advance. The announcement has to describe the nature and expected scope of the work, its expected start and duration, and, where a § 559 or § 559c increase will be sought, the expected amount of that increase along with the expected future operating costs.

Receiving that announcement gives the tenant an independent way out. Under § 555e, the tenant may terminate the tenancy by the end of the calendar month following receipt of the announcement, with the tenancy ending at the close of the second month after that. This overrides the ordinary notice periods entirely and lets a tenant who does not want to live through a renovation, or absorb the resulting rent increase, leave on a fixed and comparatively short timetable. It does not apply where the announced work is so minor that it would only cause an immaterial disturbance and an immaterial rent increase.

For the general rules on ending a tenancy outside this special situation, see ending a tenancy. A separate cap applies specifically to the rent charged at the start of a new tenancy in some cities, covered at the rent cap, which is a different mechanism from either rent increase route described here. General background on German tenancy law is at German law explained.

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