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Renting in Switzerland: When can my landlord legally increase the rent?

Helena Bachmann
Helena Bachmann - [email protected]
Renting in Switzerland: When can my landlord legally increase the rent?
Notice of your rent increase should arrive by post. Photo: Pixabay

The reference mortgage rate valid for determining rents throughout Switzerland increased on June 1st, giving landlords the right to ask for higher rents from their tenants. But are there rules about this procedure?

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The Federal Housing Office (BWO) announced that key interest rates would rise from the previous 1.25 to 1.5 percent from June 1st.

As a result of this hike, "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 go up?

That depends.

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 the BWO.

However, the landlord can ask for higher rent for other reasons.

For instance, according to Moneyland consumer platform, "if a property owner makes investments in your rental home which increase its value, they have the right to raise the rent proportionately".

Another reason for the increase can be inflation. 

“When consumer prices go up, landlords are allowed to pass on part of the costs of inflation by raising net rents," said the consumer platform. 

Last but not least, if your landlord’s costs, such as for property management, taxes, or insurance, for example, increase, they can pass these added costs on to you by raising your rent, according to consumer experts. 

However, there are strict rules about how, and when, these hikes can be implemented.

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The timing

Just because the reference interest rate went up at the beginning of this month doesn’t mean your rent will be increased from one day to another — though if you fall under the category of tenants impacted by he hike (as explained above), you will have already received a notice to that effect.

In fact, the landlord  can only up the rent once a year — either on the specific date mentioned in the lease, or the next possible termination / notice date.

The notice period in Switzerland is typically three months, which means landlords will be able to charge the higher rate from October 2023.

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Notification

Landlords must only notify you of the rent increase using a form authorised by your canton.

In it, they must justify the raise, providing specific reasons, as outlined above.

Anything other than this official format  — word of mouth, SMS or WhatsUp message, for instance — is not valid.

If you are not sure whether your rent increase or the amount of the hike are justified, or if how you should dispute the raise, you can seek advice from your canton’s conciliation authority.

READ ALSO: How to solve a dispute with your Swiss landlord

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