Tenant in Switzerland? Here's how to apply for a rent reduction

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Tenant in Switzerland? Here's how to apply for a rent reduction
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As of March 1st, more than 2.2 million Swiss households are now able to apply to have their rent lowered. Here’s what you need to know.

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Starting on March 1st, 2020, the benchmark interest rate applicable to lease contracts has been lowered by 0.25 percentage points to 1.25 percent, the Federal Housing Office announced on Monday. 

While that doesn't mean much for renters in many countries, in Switzerland it's a little different. 

Under certain conditions, tenants will be able to claim a reduction in rent when the reference interest rate - i.e. the interest rate an owner must pay to service a mortgage - declines.

Under the current increase, this means renters are entitled to a deduction of almost 3 percent

READ MORE: This is how much it costs you to change apartments in Switzerland’s cities

An estimated 2.2 million households in Switzerland are able to apply for a rent reduction - although only a fraction of those eligible are expected to apply for it.

Whether or not your property is subject to reductions in such instances will depend on the rental agreement.

Renters of properties which are financed by state subsidies or those in cooperatives which are subject to government rent controls cannot apply for a reduction. 

The savings across a year can be significant. For instance, renters who pay CHF2,500 per month will save CHF72 per month - or 870 per year. 

In the most cases, the changes however are not automatic. Renters will need to make an application (although some landlords will reduce the rent automatically). 

The Swiss Tenants Association (MV) has prepared a sample form which can be filled out to lodge a request. 

When an application is made, not all landlords will be immediately forced to reduce the rent. They can offset the amount saved by lower interest rates against improvements or maintenance made to the property. 

Finally, while renters are encouraged to make an application soon, rents can be adjusted retroactively. 


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