Stepped vs index rent —which protects you better?
Don't want to write a rent increase every few years? A graduated-rent or index-rent clause in the tenancy agreement solves that — automatically and without the tenant's consent. We show the differences, pros/cons and how to word the clauses correctly.
What are stepped and index-linked rent?
Stepped rent (§557a BGB): The tenancy agreement specifies in advance on which dates and by which amounts the rent will rise. E.g.: from 01.01.2027 +€30, from 01.01.2028 +€50.
Index-linked rent (§557b BGB): The rent adjusts automatically to inflation — measured by the consumer price index (CPI) of the Federal Statistical Office.
Comparison at a glance
| Aspect | Staffelmiete (graduated rent) | Indexmiete (index-linked rent) |
|---|---|---|
| Predictability for landlords | VERY HIGH (fixed defined amounts) | HIGH (tracks inflation) |
| Inflation protection | LIMITED | FULL |
| Rent control (Mietpreisbremse) | Initial rent + first increase capped | Initial rent capped, index increase NOT |
| Kappungsgrenze (rent increase cap) | NOT applicable | NOT applicable |
| Modernisation surcharge | NOT permitted in parallel | NOT permitted in parallel |
| Deflation risk | NONE | Rent could theoretically decrease |
Example calculation: 5 years, one flat
Starting rent: 800 € kalt
Stepped rent:+€30 per year → after 5 years: €950 (plus 18.75%)
Index-linked rent at 2.5% annual inflation: 800 × 1,025⁵ = 905 € (Plus 13,1%)
Index-linked rent at 5% inflation: 800 × 1,05⁵ = 1.021 € (Plus 27,7%) — z.B. 2022 erlebt
Which option for whom?
Stepped rent is the better choice for you if:
- You let in an area covered by the rent cap (Mietpreisbremse) (protection under §557a(4) BGB)
- You expect rather conservative rent development (~2% per year)
- You want predictable, easily calculable rental income
- You want to minimise administrative effort (no index calculation needed)
Index-linked rent is the better choice for you if:
- You want inflation protection (see 2022 with 7.9% inflation!)
- You let in an area not covered by the rent cap (Mietpreisbremse)
- You want to conclude long-term tenancy agreements (>5 years)
- You don't want to spend energy on annual rent adjustments
Federal Court of Justice-compliant clause examples
Stepped-rent clause:
from 01.01.2027: 830.00 €
from 01.01.2028: 860.00 €
from 01.01.2029: 890.00 €
[...further increments]
During the term of the Staffelmiete, other rent increases are excluded.
How Rentprime helps you
Rentprime has a Index-linked rent module: the system retrieves the current CPI from the Federal Statistical Office each month, calculates the permitted adjustment per flat and generates the BGB-compliant adjustment letter with all mandatory details. Plus: a calendar reminder for every index increase. For stepped rent: automatic booking adjustment in the calendar + dunning update at each rent step.
Related topics: Rent-increase methods · Tenancy agreement generator