Bavaria Rent Increase Rules: Mietpreisbremse, Caps, and Modernization

Germany's rent increase regulations are among the most restrictive in Europe, and Bavaria applies additional caps in municipalities with tight housing markets. Understanding these rules is essential for landlords who want to optimize rental income while staying compliant.

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in Bavaria for advice specific to your situation. Information last verified: March 2026.

1. The Cap on Existing Tenancies (Kappungsgrenze, § 558 BGB)

When increasing rent during an ongoing tenancy to the "local reference rent" (based on the local Mietspiegel), landlords are subject to a maximum percentage increase:

• Federal default: Rent may not increase by more than 20% within any 3-year period
• Bavaria (203 municipalities): Reduced to 15% within any 3-year period under the Bavarian Tenant Protection Ordinance (MiSchuV)

Requirements for a Valid Rent Increase

A rent increase under § 558 BGB requires:

1. Written notice (Textform) to the tenant with justification (Mietspiegel reference, expert opinion, or comparable rents)
2. Tenant's written consent — If the tenant refuses, the landlord must sue for consent (Zustimmungsklage)
3. Minimum waiting period — At least 15 months since the start of the tenancy or the last rent increase
4. Cannot exceed the local reference rent — The increased rent must not go above what comparable properties charge

2. The Rent Cap for New Leases (Mietpreisbremse, § 556d BGB)

In the 203 Bavarian municipalities classified as tight housing markets, new lease rents are capped:

• Maximum rent: 10% above the local reference rent (ortsübliche Vergleichsmiete)

Exceptions to the Rent Cap

Important: Landlords must proactively disclose (in writing, before signing) any exception they rely on. Without this disclosure, the exception is ineffective for 2 years. See Required Disclosures.

3. Modernization Surcharge (§ 559 BGB)

When a landlord undertakes qualifying modernization work (beyond routine maintenance), they may increase rent regardless of the Mietspiegel or Kappungsgrenze:

• Annual surcharge: Up to 8% of the modernization costs attributable to each unit
• Absolute cap: The rent increase from modernization may not exceed €3 per m² per month within 6 years (or €2 per m² if the pre-modernization rent was below €7/m²)

Qualifying modernization includes energy efficiency improvements (insulation, new heating systems), elevator installation, or disability access improvements. Routine repairs do not qualify.

4. Graduated Rent (Staffelmiete, § 557a BGB)

Landlords and tenants may agree at the outset on predetermined, fixed rent increases at set intervals:

• Example: "Rent increases by €30 on January 1 each year for 5 years"
• During a graduated rent period, no other rent increase mechanism applies
• In regulated municipalities, the initial rent must still comply with the Mietpreisbremse

5. Index-Linked Rent (Indexmiete, § 557b BGB)

The rent may be tied to the Consumer Price Index (VPI) published by the Federal Statistical Office:

• Rent adjustments reflect changes in the CPI
• While an index rent is in effect, ordinary rent increases (Mietspiegel-based) are excluded
• The initial rent in regulated areas must still comply with the Mietpreisbremse

How Landager Helps

Calculating whether a rent increase complies with the 15% Kappungsgrenze, verifying Mietspiegel comparables, and tracking modernization surcharge formulas can be complex. Landager automates these calculations across your Bavarian portfolio, alerts you when windows for rent increases open, and generates compliant notice letters.

Back to Bavaria Landlord-Tenant Laws Overview.