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Renting For Members

Why rents in some parts of Switzerland are now set to increase sharply

Helena Bachmann
Helena Bachmann - [email protected]
Why rents in some parts of Switzerland are now set to increase sharply
Get ready for your rent to go up. Image by Peggy und Marco Lachmann-Anke from Pixabay

Bad news for many tenants: from Friday, their rents could go up by as much as 3 percent, as the Swiss government raises rates applicable to lease contracts.

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The reference mortgage rate valid for determining rents throughout Switzerland has increased by 0.25 percentage points and now stands at 1.5 percent, the Federal Housing Office (BWO) announced on Friday.  

This rate plays a role in determining rents in Switzerland, because when it climbs, mortgages become more expensive for landlords, who then can pass the additional cost on to their tenants.

“As a result, landlords have, in principle, under tenancy law, the right to increase the rent by around 3 percent, on the condition, however, that the current rent is based on the old reference rate of 1.25 percent that has been in effect since March 3rd, 2020,” the BWO said.

Does this mean your rent will now go up?

It depends on where you live and some other factors as well.

Currently, 54 percent of rental contracts in Switzerland are based on that rate.

Regionally, however, even a larger number of rentals are affected.

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.

In the Bern region, as well as in northwestern parts of the country, that proportion is just over 53 percent, while in the western and southern cantons (which include Geneva and Vaud), less than half of rental contracts are tied to the reference rate.

If, however, your rent is still based on the old reference interest rate of 1.5 percent, “a rent increase motivated by the rise in the reference interest rate is not admissible,” according to BWO.

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What will happen now?

If you fall under the category of tenants whose rent is based on the 1.25-percent rate (as explained above), expect to receive a letter from your landlord of management company acting on their behalf, informing you of the increase.

What if your rent goes up by more than 3 percent?

Your landlord will have to explain why this is so, but if the reason is not legitimate, you have the right  to challenge the decision.

You can do so by a registered letter to the BWO within 30 days of signing the lease or receiving the notice of the increase. 

Their address is: Hallwylstrasse 4, 3003 Bern

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

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