Real Estate Reference rate 1.75 % (NEW)

On December 1, 2023 the Federal Office for Housing confirmed following the decision of National Bank of Switzerland, that the reference interest rate for mortgages in Switzerland would be increasing from 1,50 to 1,75%.  Along with showcasing how much the cost of buying a house has increased in recent years, the rise will also allow landlords to increase rents, including on tenants who had already signed rental contracts.

Essential to know:

The rental cost increase can be applied to anyone who has in the rental agreement Reference rate of 1,50% and less. 

Higher rental costs can also be passed on to anyone who has successfully applied for a rent reduction in Switzerland - although it’s important to bear in mind that those who started renting before February 6, 2017, and have not applied for a rent reduction, are still able to do so (as back then the rate was 1,75 percent). 

The rise of 0,25 percentage points in the reference rate will allow landlords to raise rental costs by up to 3 percent. They are also able to top up this increase by compensating for up to 40 percent of the current inflation rate (around 1,04 percent, although this is subject to change). 

Important: The rise of the rental price must be communicated by the landlord on the official form approved by the canton. Mail, what´s up or phone call, are not approved communication channels to increase the monthly rent.

Your new monthly rent applies from the next termination period.

You need to check the termination conditions in your rental agreement.

Example: if you can terminate your contract by end of March, June and September, the landlord must inform you at least 10 days before the end of March, giving you 3-month notice. It means, that your new monthly rent applies as from 1 July same year.

Can I do something against this increase?

In short, yes - although it will only be approved in certain circumstances. We encourage tenants to analyze the rental cost rise as soon as it is received.

"If it turns out that the increase was not calculated correctly, you can challenge it within 30 days of receiving the official notification at the arbitration authority of your own local council,".

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