Index-linked rent: the rent follows the consumer price index
With an index-linked rent (Indexmiete) landlord and tenant agree in writing that the rent is determined by the cost-of-living price index for all private households in Germany compiled by the Federal Statistical Office (Section 557b (1) German Civil Code). The benchmark is therefore the consumer price index for Germany – not a local rent index and not the local reference rent.
The maths is a simple ratio: new rent = current rent × index of the comparison month ÷ index of the base month. If the index rises by 10%, the rent rises by 10%. There is no capping limit here as there is under Section 558 – the index is the only ceiling. In exchange the clause works both ways: if the index falls, the rent falls too.
Index-linked rent at a glance
- Agreement in writing
- An index-rent clause must be agreed in writing under Section 557b (1)
- Unchanged for at least a year
- At least twelve months must pass between two adjustments (Section 557b (2))
- Notice in text form
- The change needs text form stating the index change and the new rent (subsection 3)
- No Section 558 alongside
- An increase up to the local reference rent is excluded