Can a Property Owner Raise My Rent in Switzerland?

Rents for housing are one of the biggest expenses on Swiss household budgets, so rent increases are generally an unwelcome event for renters. Find out when your landlord is allowed to raise your rent, how you can dispute rent increases, and when you can demand rent reductions in this moneyland.ch guide.

When is my landlord allowed to raise my rent?

A property owner may change your rent at any time, in keeping with your contract’s required notice period. This must be done using a special form approved by your canton which must be sent to you as a renter at least ten days before the notice period begins. This gives you time to terminate your rental agreement if you are not willing to pay the new rent. In addition to informing you about the planned increase, the landlord is also required to include the reason for the rent increase in the form.

There are four occasions which legally merit an increase of the net rent (excluding supplementary rental charges):

• The reference rate goes up

Landlords are allowed to raise rents when the mortgage reference rate climbs. As long as the reference rate remains under 5 percent, landlords may increase rents by 3 percent for every 0.25 percentage point increase in the mortgage reference rate.

Table 1: Rising mortgage reference rate

If, for example, you signed your rental agreement in 2020 when the reference rate was 1.25 percent, and the rate increases by 0.25 points to 1.5 percent, then a rent increase of 3 percent is allowed. So if the rent you agreed to when you rented the home in 202 was 1500 francs, for example, your landlord could charge you 45 francs more – or 1545 francs in total.

• Investments which raise the property’s value

If a property owner makes investments in your rental home which increase its value, they have the right to raise the rent proportionately. That could happen, for example, after a renovation, or when your landlord has a dishwasher or air conditioning installed. But rent increases are only allowed if the changes made actually add new value above what was previously offered. The size of rent increases has to be proportionate to the size of the investment.

• Inflation

When consumer prices go up, landlords are allowed to pass on part of the costs of inflation by raising net rents. Your rent may be raised up to a maximum of 40 percent of the upward change in the inflation rate since your last rent adjustment. The Swiss consumer price index serves as the reference for inflation rates.

Example: If prices in Switzerland have climbed by 10 percent since your last rent adjustment, your landlord can raise your rent by 4 percent (40 percent of the 10 percent inflation). If you previously paid 1500 francs per month for rent, you would pay 1560 francs – 60 francs more – after the change.

There are also rental agreements in which the rent is linked to the consumer price index. These index-linked rents can be adjusted to match inflation at a 1:1 ratio, meaning the rent increases by 100 percent of total inflation, instead of 40 percent. The mortgage reference rate is irrelevant in this case. When the rent for a property is inflation-adjusted, this is stated in the rental agreement. This kind of contract must have a minimum rental term of five years, which means you cannot give notice or terminate your rental agreement for the first five years.

• General increases in running expenses

I your landlord’s costs (for property management, taxes, or insurance, for example) increase, they can pass these added costs on to you by raising your rent. They can raise the rent by a flat rate (0.5 percent per year, for example), but if you are not in agreement, you may request proof of the cost increases. What exactly falls under general costs can vary from one landlord and property to another. For example, some landlords bill property management costs as supplemental rental charges, rather than working them into the net rent.

When are rent increases not allowed?

If your landlord does not cite one of the four legitimate reasons explained above and the increase was not agreed on in advance (graduated lease), then the rent increase is not acceptable. For example, a landlord cannot charge you more rent just because they replace an old dishwasher which has passed its expected lifespan with a new machine. In that case, the investment does not add new value, but simply maintains the property’s existing value.

The rent increase is also invalid if the renter informs you about the change in rent without using the required form, or does not provide a legitimate reason for the rent increase, or threatens to terminate your rental agreement at the same time that they inform you about the rent increase.

How can I dispute a rent increase?

You can dispute rent increases at your municipal arbitration authority. You have 30 days to file an arbitration case, starting from the time you receive the form from your landlord explaining the rent increase. You can file the dispute by sending a registered letter to the arbitration authority. Some arbitration offices also let you submit disputes online.

The arbitration authority will invite you and your landlord to take part in spoken negotiations. If you are unable to come to an agreement, the arbitration authority either gives you as the renter a license to press charges, or makes a recommendation for judgement on the case. Both you and the landlord can reject this recommendation without providing reasons, in which case the arbitration office issues a license to press charges. Once you receive this license, you have 30 days to submit your request to open a court case. If you do not, the arbitration office’s recommendation for judgement on the case becomes the official ruling.

If you cannot come to an agreement, the arbitration office does not issue a recommendation, and neither you nor your landlord submit your request to open a court case within the limited period, then you can continue to pay the rent agreed on before the proposed increase.

Can renters demand rent reductions?

Landlords are not the only ones who can demand rent adjustments. As a tenant, you can request a lowering of your net rent (excluding supplementary rental charges) if the mortgage reference rate has gone down since the rent was agreed on (when the rental agreement was signed or the rent was last adjusted). Which mortgage reference rate applies to the contract is normally stated in the rental agreement. If it is not, you can find out which reference rate is relevant on the website of the Swiss federal housing authority.

The sizes of reductions vary depending on the state of the mortgage reference rate. The table below shows the rent adjustments you could request if your current rent was agreed on in 2020 when the reference rate sat at 1.25 percent:

Table 2: Sinking mortgage reference rate

If, for example, you agreed to pay a monthly rent of 1500 francs back in 2020 and the reference rate fell from 1.25 percent to 1 percent since then, you could ask to have your rent reduced to 1456 francs. Important: If inflation or general running expenses have increased over the period in question, these cost increases should also be considered when calculating possible rent reductions. You can find tools which let you calculate all relevant factors online – on the website of the Swiss renters’ association, for example.

You can also claim a rent reduction when breakdowns reduce the livability of your home, as long as the repair of the specific breakdown falls under the responsibilities of landlords. This kind of rent reduction is temporary. It can be requested for a limited amount of time – namely, from the time the landlord is informed about the problem until the time that they repair it.

How can I apply for a rent reduction?

If you have a right to a rent reduction, you can request an adjustment by submitting an application to your landlord. Here too, the adjustment will only take effect when the new contract term begins after the next available termination date. You have to make sure that your landlord receives the application ahead of the required notice period. Sending it by registered mail is a good move, because in the case of a dispute, you will have proof that you submitted the request on time.

You do not have to state the exact reduction you are entitled to in your application. It is enough to simply inform your landlord that the mortgage reference rate has changed in your favor and that you would like your rent to be adjusted accordingly. But providing a concrete figure for what you believe to be the correct rent is beneficial. You should also ask your landlord to send you a written confirmation if the application is accepted, or their reasons if the application is rejected or only fulfilled in part.

If you do not receive an answer from your landlord within 30 days, you can get help from your municipal arbitration authority. You have to file for an arbitration case within 60 days of sending your landlord the application for a rent reduction.

If your landlord replies, but their response is unsatisfactory (for example, if their reasons for denying you a rent reduction are unfounded), you can file a case with your municipality’s arbitration office. Important: You must submit your case to arbitration authority within 30 days of receiving your landlord’s rejection.

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