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HOUSING

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

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.

Tenant in Switzerland? Here's how to apply for a rent reduction
Photo by Toa Heftiba on Unsplash

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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COST OF LIVING

Cost of living: How you can beat Switzerland’s inflation blues?

With inflation, and consequently the cost of living, continuing to rise, many consumers find it necessary to spend less than they used to. But is it possible to cut the cost of living in an expensive country like Switzerland?

Cost of living: How you can beat Switzerland's inflation blues?

In April, Switzerland’s inflation rate stood at about 2.6 percent, but it climbed to 3.4 percent in June.

That’s a significant increase, but the good news (at least for the Swiss) is that this rate is still lower than in many other countries in Europe, where it hovers around 8.6 percent.

Nevertheless, Swiss consumers have noticed that their already high cost of living is climbing upwards in line with increasing inflation, and many commonly used products and services have become even more expensive in the past months.

READ MORE: Seven products that are becoming more expensive in Switzerland

It is, however, possible to cut the cost of living somewhat and save money in the process.

Switzerland’s Blick newspaper asked a consumer expert to offer some common-sense tips to help households in Switzerland get more bang out of their franc in these inflationary times.

These are some areas where costs can be cut:

Insurance

According to Sara Stalder, director of the Foundation for Consumer Protection, “it is worth examining your insurance portfolio”, to see where savings could be made.

As health insurance premiums are among the highest expenditures of a typical household, switching to another carrier could cost you less.

You won’t be able to switch until January 2023 (notifying your insurance company of the change by November 30th), but if you do your research now, you’ll be able to save as much as several hundred francs in annual premiums per person in the new year.

READ MORE: Why Swiss patients pay too much for healthcare

Calling and internet

While the costs of telecommunications (internet, mobile phones) have not risen significantly in Switzerland, Stalder advises to seek out “interesting offers that are only available to new customers.”

Also, since streaming services could become more expensive in the near future in the aftermath of the May 15th referendum, this may be a good time to examine whether some platforms you subscribe to (Netflix, Apple TV, Amazon Prime, etc.) should be cancelled.

Weeding out your streaming platforms will cut costs. Photo by freestocks on Unsplash

Credit cards

As The Local reported on July 4th, there are significant differences in annual costs of credit cards, and you can save quite a bit by switching from one card to another.

A recent study by an independent online comparison service Moneyland showed that “occasional users could save 560 francs and frequent users could see savings of more than 830 francs in the first two years if they were to switch to cheapest cards”.

You can find out more about credit card savings here:

Huge differences’: How you can save money on Swiss credit cards

Buy seasonal products

We have gotten used to having a variety of fruits and vegetables available all year round, but this convenience comes at a price.

Fruits and vegetables that are not in season in Switzerland right now (for instance, strawberries and grapes) are imported and therefore more expensive than local produce.

However, many grocery shops have special promotions on fruits that are in season in Switzerland right now, so this staying away from imports could be another way to save money.

And while you are shopping… avoid prepared foods

Sure, it’s easier to pick up a bag of grated carrots than buying them in bulk and grating them yourself, but the price difference could add up if you are used to buying ready-to-eat ,pre-packaged food rather than preparing it yourself.

This may require a change in habits but could also save money in the long-term.

A money-saving move. Image by DaModernDaVinci from Pixabay 

This may be a no-brainer but we have to say it anyway: save on energy!

Energy prices have skyrocketed since Russia invaded Ukraine in February 2022 and are expected to soar further.

READ MORE: Switzerland faces 20 percent increase in electricity costs

As these costs constitute a major expenditure in a household budget, reducing your energy costs is essential, especially if you are a home or apartment owner and have to pay these charges yourself.

These are some ways to reduce your energy consumption, according to a consumer site bonus.ch:

  • Use heat in moderation, setting the temperature according to the size of the room and how often it is being used. Unoccupied rooms should not be heated at all.
  • Turn off the light when leaving a room (this advice is logical and reasonable, and yet many people neglect to do so).
  •  Shut down electrical appliances such as TV and computers completely when not in use, or even unplug them altogether.
  • Use appliances with the energy label “A”, LED lamps and energy-saving bulbs, avoiding devices with high energy consumption, such as aquariums and fans.

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