Advantages for Swiss tenants due to the recently decreased interest rates
Swiss Tenants, Brace for Lower Rents!
Good news, folks! The Swiss National Bank has slashed its key interest rate by a whopping 0.25 percent, bringing it down to a super-low 0.5 percent. But what does this mean for you, the tenants? Here's the lowdown on how this financial move could affect your monthly rental expenses.
Most rents in Switzerland are pegged to the reference interest rate, an average of all interest paid on Swiss mortgages. With the Swiss National Bank's key interest rate now at an all-time low, the reference interest rate has taken a tumble too, landing at 1.5 percent.
So, are you in for a rent reduction? In theory, yes! According to the BWO, "if your rent is based on a reference interest rate of 1.75 percent, tenants are entitled to demand a rent reduction of 2.91 percent." But remember, this is the best-case scenario, and actual rent reductions might vary for several reasons.
For instance, "other cost factors, such as the change in the consumer price index (inflation) can play a role in setting rents," the BWO cautioned. Inflation can be taken into account up to 40 percent, and changes in maintenance and operating costs can also lead to rent adjustments. Additionally, any added costs for property management, taxes, or insurance can be included in your rent, reducing the actual rent reduction you might receive.
While the new rent reductions won't happen immediately, the BWO hinted that we can expect them to kick in within the next few months. To help you navigate this process, the Swiss Tenants Association has prepared a helpful sample form for tenant-landlord negotiations.
In all, an estimated 2.2 million households in Switzerland can benefit from these rent reductions. So, get ready to demand your share! Just remember, a little proactive action can go a long way in ensuring you get the best possible deal.
Stay tuned for more updates on this developing situation. In the meantime, take a peek at our explainer on Switzerland's 'rent calculator' to understand how it could help you. Happy renting!
- Given the Swiss National Bank's reduction of the key interest rate, Swiss tenants might expect a decrease in their monthly rental expenses since most rents in Switzerland are linked to the reference interest rate.
- If the rent is based on a reference interest rate of 1.75 percent, Swiss tenants could potentially demand a rent reduction of 2.91 percent following the Swiss National Bank's rate cut.
- However, tenants should be aware that additional cost factors and adjustments like inflation, maintenance, and added property costs may influence the actual rent reductions received.
- In order to assist with tenant-landlord negotiations regarding the rent reductions, the Swiss Tenants Association has prepared a sample form for reference.
