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HOUSING

Swiss rental reference rate stays unchanged

The benchmark quarterly reference rate for residential rents in Switzerland remains at two percent, signalling that existing leases cannot be increased, the federal housing office (BWO) said on Monday.

Swiss rental reference rate stays unchanged
Photo: Theo Iff/FOH

The rate remains unchanged from September 3rd, the last time it was fixed.

Three months ago, the rate dropped by 0.25 percentage points to establish a record low level, marking the first change to the reference rate in 15 months, reflecting continued bargain mortgage rates for property owners.

The average mortgage rate for September 30th — upon which the latest reference rate is based — dipped to 2.06 percent from 2.09 percent three months earlier.

However, this was not enough to affect the reference rate, which will remain unchanged unless mortgage rates fall below 1.88 percent or rise above 2.12 percent, the housing office said.

Since September 2008 residential rents have been fixed according to the rates set nationally by the BWO four times a year.

Before that, rates were set individually by each of the country’s 26 cantons based on the average variable mortgage rates.

Landlords are still able to raise or lower their rents based on changes in maintenance costs.

And the reference rate does not stop them from boosting rents for new tenants.

SMV, the Swiss tenants’ association, last week noted that low interest rates have led to an “explosion” in real estate prices, which are in turn boosting housing costs.

But it also noted that generous tax benefits (against interest paid on mortgages) for apartment owners in many cantons means that they can pay less than renters for an equivalent residence.

The association called on the government to abolish the tax deductions and put a halt to new incentives.

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PROPERTY

Checklist: What documents do I need for an apartment in Switzerland?

Looking for a flat? You need to have your documents in order. Here’s what you need to know.

Checklist: What documents do I need for an apartment in Switzerland?

Finding a flat in Switzerland is incredibly competitive, even if you are not looking in the larger metropolises of Zurich and Geneva. 

Landlords will often get hundreds of applications for each flat offer. 

One way to get ahead is to make sure you have your documents in order early – in many cases even before you see the apartment in question. 

While this will sometimes lead to some unnecessary printing, you will ensure your completed documentation is on top of the landlord’s pile when the big decision has to be made. 

If you aren’t handing the documents in in person, put them all together in one PDF file when you send it over to make it easier for the landlord to read. 

Here are some of the important documents you will need to find a flat in Switzerland. 

Overview

There are two broad categories of documents you need to move into a flat in Switzerland: the need to haves and the nice to haves, although things are so competitive these days that many of the nice to haves are getting a little more essential. 

The need to haves include identification, application form and residence permit (if you don’t have a Swiss passport). 

The nice to haves are a cover letter, freedom from debt statement, employment information, references from employers and from previous landlords and additional information about the nature of your employment, i.e. a contract showing the duration of your employment. 

All of the documents should be provided in the language of the canton in which you apply. Often it will be no problem to apply in English, particularly in larger cities, however an application in the local language will always be looked upon positively. 

Finally, while the following is a guide as to the commonly requested and required documents in Switzerland, it does vary from place to place. 

Sometimes you will need to register with a particular property company, for instance, or provide other specifics related to the accommodation, i.e. student accommodation. 

Landlords are however restricted from asking certain questions, including those related to health. More info on this is available below. 

Renting in Switzerland: The questions your landlord can and cannot ask you

Identification

This one is relatively self-explanatory, as not even the most trusting landlord is likely to allow you to move in without proof of who you are. 

For foreigners, a passport is likely to be required, although your Swiss identity card will also suffice. 

Application form

The application form is the centrepiece of your request, so be sure to include it. 

It will guide you through the process, showing you which information you need to provide and generally what the landlord considers necessary. 

Generally speaking application forms will be available online, or at the very least will be available at the apartment viewing. 

If you can, fill it out online and hand it in at the viewing – it will put you ahead of the competition. 

Employment status 

Generally, your application will ask for your profession and for your employer. 

They will also ask for a salary estimate and sometimes proof of salary, or at least a ballpark figure of what you earn. 

Real estate agencies tend to run by the loose rule that your rent should not be more than a third of your wage, so keep that in mind when applying. 

Residence permit

As we outlined here, landlords cannot as you about your nationality or other potentially associated characteristics such as religion or race, but they are permitted to ask for proof of your residency status. 

Specifically, a landlord is allowed to ask whether you are Swiss or not and to provide details of your citizenship or residency details, i.e. which type of permit you have to live in Switzerland. 

Again, while this may appear to be a personal question and may result in discrimination, landlords will want to know you have a right to live in Switzerland and are therefore likely to stick around for the long(ish) term. 

Freedom from debt statement 

There are two statements here – a general certificate saying you are not in debt (from organisations like CRIF, ZEK, IKO or Bisnode) and one which highlights you are not in debt to your previous landlord. 

Generally speaking, neither of these are required in Switzerland, although you will be making your life more difficult if you don’t provide them. 

In Germany and Austria, landlords will often ask for a Mietschuldenfreiheitsbescheinigung (pronounced meat-shool-den-fry-height-bee-shine-ee-goong). 

Switzerland loves paperwork. Photo: Christa Dodoo on Unsplash.

Switzerland loves paperwork. Photo: Christa Dodoo on Unsplash.

Literally translating as rent-debt-freedom-certificate, the Mietschuldenfreiheitsbescheinigung is a document which confirms you are not in rental debt for your previous properties. 

Keep in mind that in Switzerland the previous landlord is under no obligation to provide this certificate – and a tenant is also under no obligation to show it. 

Tenant or landlord: Who pays which costs in Switzerland?

However, as with everything in this list, such a certificate is likely to help convince a landlord that a tenant is trustworthy. 

A landlord looking at two identical applications is likely to decide in favour of the tenant who has provided a Mietschuldenfreiheitsbescheinigung rather than the tenant who hasn’t. 

If your landlord will not provide you with one – or asks for a large sum of money to get it – you can provide this information to your prospective landlord. 

Generally speaking you should not be charged more than 20 francs for such a statement. 

Cover letter

A cover letter will usually not be a requirement, however it is perhaps the best chance you have to explain a little about yourself, why you want to live in the region (and in the specific flat) and what your long-term goals are. 

Generally speaking you will not get to meet the landlord personally (unless its a private rental), so the cover letter is your best chance to give an indication as to who you really are. 

When writing a cover letter, be sure not to simply repeat the information on your application form – use it to tell a story about yourself and why you are captivated by the flat (remember that landlords will be able to smell a generic cover letter a mile away). 

Like resumes, cover letters in Switzerland generally include photos. 

Recommendation letters

Recommend letter of recommendation from your former landlord or from your employer are definitely in the nice to have category and may not be looked at at all, however a landlord may be swayed by the positive opinion of a previous landlord. 

Renting in Switzerland: Can a landlord ask if I am vaccinated? 

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