Renting For Members

How do you know if your Swiss rent is too high — and how can you challenge it?

Helena Bachmann
Helena Bachmann - [email protected]
How do you know if your Swiss rent is too high — and how can you challenge it?
They are not getting any cheaper — on the contrary. Image by F. Muhammad from Pixabay

Rents have been increasing in Switzerland throughout the past year, and are set to go up even more. But there is a way to ask for a reduction if you are paying too much.

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Over the span of 2022, tenants in Switzerland had to pay on average 4.3 percent more for their lodgings, though some parts of the country experienced hikes exceeding 8 percent.

The three regions with the highest price hikes in 2022 were:

  • Ticino, with an increase of 8.4 percent
  • Greater Zurich area, 6.1 percent
  • The Lake Geneva region (Geneva and Vaud), 3.8 percent

READ MORE: EXPLAINED: Where in Switzerland are property prices and rents rising the most?

This has happened for several reasons: more demand for housing due to higher immigration and less construction because of the scarcity (and cost) of building land. 

As 2023 is progressing, there is even more potentially bad news for Switzerland’s tenants: starting in March, the mortgage reference rate — a benchmark used to set other interest rates as well — is expected to go up.


It plays a role in determining rents in Switzerland, because when this rate is climbing, mortgages become more expensive for landlords, who then pass the additional cost on to their tenants.

Right now, the reference rate is 1.25 percent, and currently 54 percent of rental contracts in Switzerland are based on that rate. 

Regionally, however, even a larger number of rentals are based on that rate.

In the Zurich area, as well as in central Switzerland, for instance, more than 60 percent of rental contracts are based on a 1.25-percent reference rate, according to Moneyland consumer platform.

READ MORE: Why many Swiss tenants face higher rent costs from March

How can you know whether your landlord is charging you a rent that is too high?

In 2020, the Federal Court, Switzerland’s highest judicial authority, ruled that owners of rental accommodation can get returns of up to 2 percent higher than the reference interest rate.

So right now, when the reference rate is 1.25 percent, landlords are entitled to returns of 3.25 percent; anything higher than that is considered ‘abusive’ toward tenants.

If the reference rate goes up in March, then the calculation will have to be remade, but the same principle will still apply: the 2-percent limit on profit.

Unfortunately, some landlords don’t comply with this rule.

Raiffeisen bank found, for instance, that the overall return on apartment buildings  in Switzerland was around 6.5 percent in 2021.

Swiss Tenants Association told Watson news portal, that such "excessive rents deprive households of billions of francs each year.”

Many tenants overpay their rent. Photo: Pixabay


What are your options if you find that your rent is, in fact, ‘abusive’?

The most logical move is not to rent the apartment in the first place, if the math (as mentioned above) doesn’t add up.

If you are already a tenant, you have the right to challenge an abusive rent, by reporting it to the Federal Housing Office (BWO) by a registered letter, but you must do so within 30 days of signing the lease. 

You must explain why you signed the contract, knowing the rent was excessive.

If you can prove that you signed it because you didn’t know your rent is significantly higher than that paid by the previous tenant, that might work.

However, relatively few people file such complaints.

In 2021, according to Watson, the BWO “recorded just over 1,259 disputes. Compared to the 2.3 million people who live in rented accommodation in our country, this figure is very low.”

The reason, said ASLOCA’s lawyer Linda Rosenkranz, is that “a dispute requires an appearance in front of the authority of conciliation and, if necessary, even in front of the court. This can be time-consuming and expensive.”

Another reason lies in the non-confrontational mentality of the Swiss: “they are very polite and fear conflicts,” she added.

This is confirmed by a study by Sotomo research institute, which found that tenants attach great importance to a good relationship with the landlord and don’t want to jeopardise it.
READ MORE: Switzerland: Do I have to pay a penalty if I break my rental lease early? 


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