Setting the rent: local comparable rent, rent index, and legal limits

EverReal Editorial Team. The same letting technology chosen by 450+ real estate companies. Last updated: October 2026.

Problem: Real estate portals show what landlords are asking for, not what is permitted. Cause: Whether an upper limit applies to new leases at all depends on the location. Thesis: First clarify whether a limit applies, then determine the local reference rent, then set the rent.

The local reference rent (ortsübliche Vergleichsmiete) is the customary compensation for comparable residential space over the past six years. A rent increase under Section 558 of the German Civil Code (BGB) can only go up to this amount at most. For new leases, it only sets a limit in areas with a tight housing market; otherwise, only the prohibition of excessive rent sets a boundary. For rent increases, Section 558a BGB lists rent indexes (Mietspiegel), rent databases, expert opinions, or three comparable apartments as evidence.

Local reference rent, asking rent, market rent: three figures that do not mean the same thing

The asking rent is the price demanded in a listing. It does not indicate whether someone actually signs at this amount. In everyday practice, market rent refers to the rent that is actually agreed upon on the market.

The local reference rent, on the other hand, is a legal term. According to Section 558 (2) BGB, it is formed from the customary rents that have been agreed upon or modified over the last six years in the municipality or a comparable municipality for residential space of comparable type, size, furnishings, condition, and location, including energy characteristics and condition. Because six years are taken into account, the reference rent and the asking rent can diverge in a market with rising rents. An average calculated from portal listings therefore does not replace the reference rent.

How do you determine the reference rent? Four forms of evidence under the law

Section 558a (2) BGB specifies what can be used to prove the reference rent. The list begins with "in particular" and is not exhaustive. Four forms of evidence are listed:

1. A rent index (Mietspiegel) (Sections 558c, 558d BGB).

2. Information from a rent database (Section 558e BGB). This is a continuously maintained collection of rents jointly managed or recognized by the municipality or interest groups representing landlords and tenants.

3. A reasoned expert opinion by a publicly appointed and sworn expert.

4. Corresponding rents for individual comparable apartments. Under the law, naming three apartments is sufficient.

These forms of evidence are regulated for rent increase requests during an ongoing tenancy. For new leases, the law does not prescribe any of them. They serve as guidance for establishing your own figure. A listing is not suitable: it shows an asking rent, not an agreed rent.

Calculating rent: a calculation example and the three limits

The reference rent is not a general ceiling for new leases. Whether a limit applies and which one depends on the location. The following example calculates this using fictitious numbers without reflecting an actual rent level.

A two-room apartment with 64 square meters of living space is located in the fictional city of Musterstadt. The rent index specifies a net base rent (Kaltmiete) range of 8.60 to 10.80 euros per square meter for its category, and based on its guidance, you classify the apartment at 9.70 euros.

Case 1: Area with a tight housing market. If the apartment is located in an area with a tight housing market designated by the state government via statutory ordinance, the rent at the start of the tenancy may exceed the local reference rent by at most 10 percent (Section 556d BGB). Such ordinances must expire by December 31, 2029 at the latest. Exceptions are regulated in Sections 556e and 556f BGB: a higher previous rent, modernizations in the last three years before the start of the tenancy, initial use and lease after October 1, 2014, and the first lease following comprehensive modernization. Anyone relying on an exception must provide information to the tenant unprompted and in text form before the tenant enters into the contract; otherwise, they cannot initially invoke it (Section 556g BGB). The tenant can reclaim overpaid rent if they have reprimanded the violation. Which areas are affected is described in the article on the Rent Brake (Mietpreisbremse) 2026.

Case 2: Additionally, also outside such areas. This limit applies everywhere, is set higher, and has a second condition. According to Section 5 of the Economic Offenses Act (WiStG), rents that exceed the customary rents of the past six years by more than 20 percent as a result of exploiting a shortage of comparable space are unreasonably high. Both conditions must be met: 20 percent above is not enough if apartments in the area are not scarce. Anyone who intentionally or recklessly demands, accepts the promise of, or collects such rent commits an administrative offense; the fine can be up to 50,000 euros.

Case 3: The extreme case. Section 291 of the German Criminal Code (StGB) penalizes usury: Anyone who exploits the predicament, lack of experience, poor judgment, or substantial weakness of will of another person by having financial benefits promised or granted for the leasing of living space that are in striking disproportion to the service provided risks imprisonment for up to three years or a fine.

In the example, we equate customary rents with the reference rent. The 716.80 euros from the listing is then 33.92 euros above the limit in Case 1, but below the limit in Case 2. You opt for 680 euros and remain below both thresholds. In a dispute, a court might view your classification at 9.70 euros differently. For a rent increase under Section 558 BGB, on the other hand, the reference rent acts as a cap everywhere, alongside the statutory capping limit of 20 percent within three years (15 percent in certain areas).

Reading a rent index: simple or qualified

A rent index (Mietspiegel) is an overview of the local reference rent jointly created or recognized by the competent authority or interest groups representing landlords and tenants (Section 558c BGB). A qualified rent index is created and recognized according to recognized scientific principles, must be adjusted to market trends every two years, and recreated after four years (Section 558d BGB). If these deadlines are observed, it is presumed that its values reflect the local reference rent. This legal presumption does not apply to a simple rent index.

Surcharges: what the reference rent already includes and what can be added

Furnishings and location are already among the comparative criteria under Section 558 (2) BGB. If a feature is accounted for in the rent index and then added again as a surcharge, it is counted twice in the calculation. Furniture does not belong to the apartment itself and can justify a separate surcharge. How to determine it is detailed in Renting a furnished apartment: Surcharge, contract. The Tenancy Law Package II (Mietrechtspaket II) would change the rules regarding the furnishing surcharge. It is a government draft bill (BT-Drs. 21/6807) and not current law.

If the rent is to increase later: when the limit still applies

If you agree on a stepped rent (Staffelmiete), the limit of Section 556d BGB applies to each rent step (Section 557a BGB). For the second and each subsequent rent step, the reference rent at the time the respective first rent payment becomes due is decisive (Section 557a (4) sentence 2). For an indexed rent (Indexmiete), it only applies to the initial rent (Section 557b BGB). More on stepped rents and the difference to indexed rents can be found in Stepped rent: Rules and benefits for landlords. For indexed rent, the government draft for the Tenancy Law Package II plans to permit consumer price index increases above 3.0 percent per year only by half in areas designated by the states via statutory ordinance. This, too, is a draft and not current law.

Documenting and reusing the figure

Record the rent index including category, living area, classification, calculation method, and date on a single page. In an area with a tight housing market, you must, upon request, provide the tenant with the facts decisive for the permissible rent, insofar as they are not publicly accessible and you can easily provide them (Section 556g BGB). The exact same figure is then used in the listing (Writing an apartment listing: Structure, example), in the lease contract (Tenancy agreement template to copy: Mandatory contents), and for the security deposit. The deposit may not exceed three times the monthly rent excluding operating costs specified as a lump sum or prepayment (Section 551 BGB), which in this example of 680 euros amounts to 2,040 euros (more in Deposit account: Investing and returning the security deposit).

Conclusion

In the end, two figures matter: the price the market allows, and the price you are legally permitted to ask for. First, determine whether the apartment is located in an area with a tight housing market, because only there does the strict limit of 10 percent above the reference rent apply to new leases. Next, determine the reference rent using one of the four statutory forms of evidence and document which one was used. To see where this step fits into the process, see Renting out an apartment: The complete process.

Once the rent is established, listings, inquiries, and viewings follow. EverReal Go! is your digital letting assistant and keeps listings, inquiries, and viewings all in one place. What the packages contain and cost can be found in the EverReal Go! price overview.

Legal Notice We do not provide legal advice. For specific legal questions, a specialist lawyer for tenancy and residential property law or your local property owners' association (e.g., Haus & Grund) can assist you. Legal status of this article: October 14, 2026. The Tenancy Law Package II is a government draft bill and not current law.

Sources

• BGB, gesetze-im-internet.de, retrieved on October 14, 2026: Section 551, Section 556d, Section 556e, Section 556f, Section 556g, Section 557a, Section 557b, Section 558, Section 558a, Section 558c, Section 558d, Section 558e

• Economic Offenses Act 1954 (Wirtschaftsstrafgesetz 1954), gesetze-im-internet.de, retrieved on October 14, 2026: Section 5 Excessive rent

• Criminal Code (StGB), gesetze-im-internet.de, retrieved on October 14, 2026: Section 291 Usury

• Federal Government Draft Bill, Draft law amending the law on residential and commercial premises leases, BT-Drucksache 21/6807 of July 1, 2026 (government draft, not current law; details on index rent: p. 8, Art. 1 No. 9), retrieved on October 14, 2026

• BMJV, Press release No. 31/2026 of April 29, 2026 (Cabinet decision, supplementary to indexed rent), retrieved on October 14, 2026

• EverReal Go!, scope of services and prices: de.everreal.co/go/preise, retrieved on October 14, 2026

• 450+ real estate companies: EverReal self-declaration, as of September 2026

Frequently Asked Questions

What is the local reference rent?

The local reference rent (ortsübliche Vergleichsmiete) is a legally defined benchmark value. According to Section 558 (2) BGB, it is determined from the customary compensation agreed upon or altered over the past six years in the municipality or a comparable municipality for living space of comparable type, size, furnishings, condition, and location, including energy characteristics and condition. Living space where the rent level is set by statute or in connection with a public funding commitment is excluded. The asking rent from advertisements is a requested rent, not an agreed rent, and is therefore not factored in.

How high may the rent be for a new lease?

This depends on the location. In an area with a tight housing market designated by the state government via statutory ordinance, the rent at the start of the tenancy may exceed the local reference rent by at most 10 percent (Section 556d BGB), subject to the exceptions in Sections 556e and 556f BGB. Independently of this and also outside such areas, Section 5 of the Economic Offenses Act sets a threshold: rents that exceed customary rents by more than 20 percent as a result of exploiting a shortage of supply are unreasonably high. Furthermore, Section 291 StGB penalizes rent usury.

How do I calculate the rent per square meter?

You obtain the square-meter price (rent per sqm) by dividing the net base rent by the living area. The rent index specifies which type of rent it refers to (usually net base rent). To calculate the reference rent, you do the reverse: you locate the category in the rent index that matches your apartment and classify it within the given range based on the index's criteria. Multiply the rent per square meter by the living area; the result is the apartment's reference rent. Example using fictitious numbers: 64 square meters times 9.70 euros equals 620.80 euros. Always verify the living space first, as an error there shifts every subsequent calculation.

What applies if there is no rent index?

If a rent index is unavailable, Section 558a BGB specifies other forms of evidence for a rent increase request: information from a rent database, a reasoned expert opinion by a publicly appointed and sworn expert, or corresponding rents for individual comparable apartments (naming three apartments is sufficient). For new leases, the law does not prescribe any of these. Municipalities with more than 50,000 residents are required to compile rent indexes (Section 558c BGB); this is not mandatory for smaller municipalities. For a rent increase request in the absence of a current rent index, Section 558a BGB also permits using an older index or one from a comparable municipality. Online portal listings are not valid evidence because they show requested rather than agreed rents.

Can I charge more for furnishings?

Yes, in principle: the local reference rent applies to the apartment without furniture, meaning a furnishing surcharge can be added. There is currently no statutory formula specifying its amount. The government draft for Tenancy Law Package II (BT-Drs. 21/6807) would regulate the surcharge by law for the first time, including rules for its calculation and disclosure. However, it is not yet law (as of October 14, 2026). The calculation method is shown in Renting a furnished apartment: Surcharge, contract.