Renting For Members

How does Swiss government plan to curb rent increases?

Helena Bachmann
Helena Bachmann - [email protected]
How does Swiss government plan to curb rent increases?
The government wants to keep rents reasonable. Photo by Patrick Perkins on Unsplash

This week Switzerland's Federal Council discussed the issue of rent hikes and its new plans to slow down the upward trend.

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Many tenants have been hit by rent increases this year, after the Federal Housing Office had raised the reference mortgage rate valid for determining rents by 0.25 percentage points in June, bringing it up to 1.5 percent.

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

On top of that, as the benchmark interest rate is due to increase again in December to 1.75 percent, authorising landlords to raise rents by 3 percent, Swiss tenants could be hit by another hike.

“If we add various cost factors such as generalised increases in prices, we could see rent hikes of around 15 percent in a relatively short period of time,” the Federal Council said in a press release on Wednesday.

This would put further pressure on the tenants already dealing will high costs amid a very tight housing market, especially in large cities.

That is why the Federal Council wants to intervene to slow down the process, mandating the Department of Economy to develop a new ordinance on rent hikes, as the current one was created 40 years ago and may no longer be relevant today.

What exactly is the government proposing?

The new measures “must have a moderating effect on rents and increase the transparency of prices on the rental market, without intervening excessively in contractual relations or even slowing down investments in the supply of housing,” the Federal Council said,

In concrete terms, this means that general cost increases can no longer be passed on to tenants. Instead, landlords would have to prove by how much their costs have gone up to justify the rent hikes.

It would also become easier for tenants to dispute increases they deem unjustified by showing, for example, that their rents are higher than those in similar housing in the area.


When will tenants see any results of this government intervention?

Any suggestions and proposals put forth by the Department of Economy will be debated by the Federal Council in summer of 2024.

Then it will likely take a while before any measures are actually implemented.

Is there anything you can do in the meantime to avoid your rent from going up?

Yes — don’t move.

Even if your apartment is no longer suitable in terms of size or location, tenants should stay put rather than move elsewhere and risk having to pay higher rents.

That’s because changing apartments incurs costs and often results in higher rents.

This is a finding of a new study by Zurich Cantonal Bank (ZKB).

The study showed, for instance, that existing tenants in Zurich saved an average of 16 percent compared to new tenants, which corresponds to 3,000 francs annually.

READ ALSO: Why sticking to one apartment will save you money


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