Rent increase after modernisation: pass on 8 % (2026)

What is a rent increase after Modernisierung?

If you have carried out a Modernisierung (modernisation) on the flat, you may raise the annual rent by 8 % of the costs attributable to that dwelling (§ 559 para. 1 BGB). This increase is permanent and works independently of the Mietspiegel (local rent index) or the ortsübliche Vergleichsmiete (customary comparative rent) — it follows its own logic.

The crucial distinction: only genuine Modernisierungsmaßnahmen can be passed on — energetic improvements, lasting savings of energy or water, or a durable increase in the use value of the dwelling (Wohnwertverbesserung). Pure Instandhaltung (maintenance) is not passable.

How do I calculate the Modernisierungsumlage?

The formula is simple; the correct cost basis is the hard part.

1. Determine the modernisation costs — only the cost of the measure itself.
2. Deduct saved maintenance costs (§ 559 para. 2 BGB). If the measure replaces a due repair, that repair share must be subtracted.
3. Allocate to the dwelling — with several units, the share attributable to the individual flat (normally by living area).
4. Apply 8 % per year to those costs.
5. Divide by 12 for the monthly increase.

Example: modernisation costs for the flat 12,000 €, of which 2,000 € is saved maintenance. The passable amount is 10,000 €. Annual pass-through: 8 % of 10,000 € = 800 €. Monthly increase: around 66.67 €.

What Kappungsgrenze applies?

The Modernisierungsumlage is capped (§ 559 para. 3a BGB):

Starting rent (before increase)	Maximum increase over 6 years
7 €/m² or more	3 €/m²
below 7 €/m²	2 €/m²

The cap applies per square metre of living area over a six-year period. For a 60 m² flat with a starting rent above 7 €/m², the ceiling is therefore 180 € of increase over six years. If the 8 % formula yields more, you must reduce it to the Kappungsgrenze amount.

What must I announce beforehand?

Before the work begins, the Modernisierungsankündigung is mandatory (§ 555c BGB). It must reach the tenant in Textform at least three months before the start and must contain:

• the type and expected scope of the measure
• the expected start and expected duration
• the rent increase to be expected and the likely future Betriebskosten (operating costs)

Without a proper announcement, the later payment start can be pushed back by three months.

How do I declare the increase effectively?

After the work is finished you declare the increase with the Erhöhungserklärung in Textform (§ 559b para. 1 BGB). The declaration must calculate and explain the increase comprehensibly on the basis of the costs incurred.

The tenant owes the increased rent from the start of the third month after receipt of the declaration (§ 559b para. 2 BGB). If the measure was not announced or was announced faultily, or the announced costs were exceeded by more than 10 %, the period extends by a further three months.

Important: An Erhöhungserklärung that does not break down the costs comprehensibly, or fails to deduct saved maintenance, is formally invalid — and the tenant then need not pay. Separate Modernisierung and Instandhaltung cleanly and document every item.

Passable or not?

Passable (§ 559 BGB)	Not passable
Energetic refurbishment (insulation, new heating)	Repair of a broken heating system (Instandhaltung)
Installation of a heat pump	routine servicing
New, better-insulating windows (less the repair share)	mere window replacement without improvement
Adding a balcony (Wohnwertverbesserung)	Schönheitsreparaturen (cosmetic repairs)
First-time installation of modern sanitary fittings	remedying of defects

Common mistakes

• Not deducting the maintenance share — the most common reason for an invalid increase.
• Ignoring the Kappungsgrenze — the 8 % formula alone is not enough; the cap takes precedence.
• Announcement too late or informal — the three-month deadline and Textform are mandatory.
• An Erhöhungserklärung that is not comprehensible — a missing cost breakdown makes the declaration formally invalid.
• Calculating the payment start wrongly — the higher rent only runs from the third month after receipt.

With HausMaus it's simpler

HausMaus produces the Mieterhöhung after Modernisierung for you: you enter the costs, the app applies the 8 % rule and the Kappungsgrenze of § 559 BGB and generates the §-valid Erhöhungserklärung for you to review and send. Your calculation and form stay verifiable — without having to keep the deadline and cap rules in your head. HausMaus costs landlords 1 % of the rent collected.