One of the reasons I love Switzerland is that a lot of processes enforce people to be responsible.
For instance, when you move from one city to another, it’s up to you to declare yourself to the local authority else you get to pay some fees if they have to remind it to you.
The down side of this way of proceeding is that you may lose good opportunities to save money when you don’t know about every rule and law of Switzerland.
The good side of it is that you have to get involved and know the policies of the country you live in.
A rent decrease is one of the opportunity you could miss if you aren’t aware about specific Swiss policies. And you could lose a lot of money over the years!!!
The decrease has to be asked by the tenant to the owner. Meaning that the owner isn’t forced by any law to inform the tenant that a rent decrease is possible. Welcome in Switzerland!!!
Enters the Swiss reference mortgage rate
When you own a property, you are free to rent it, with some regulations about the price you set. One of these regulations is called the “reference mortgage rate”. Since 2008, this rate is unified at the country level. It is based on the average mortgage rate delivered by banks.
In order to follow the national financial situation, when the rate is going up, rent can be increased. When the rate is going down, rent can be decreased.
The Swiss Confederation revises the rate at the end of every quarter.
When we arrived in Switzerland some years ago, we didn’t know about this process and it is only one year and a half ago that we learnt that you had to ask for it to get it.
Unfortunately, you can’t ask to be reimbursed retroactively so we lost quite a bunch of cash due to our ignorance.
On the other hand, the surprise was bigger as we switched from a 3% reference rate to a 2% reference rate which means a rent decrease of CHF 152/month.
On a ten years scale, this invested amount will use the compounding effect to reach a saving amount of CHF 28'544!!!
How to increase your wealth with one single mail
The good part of this trick is that you don’t have to fill hundreds of administrative forms neither you have to wait two years to see the cash getting in.
You just need to write one mail to your property management and your rent will be decreased the month afterwards!!! That’s it!
One thing to take into account is that the owner can counter this decrease request by the raise of your rent charges if he can justify that he has more costs to support.
So far in my neighborhood, we all asked for decreases year after year and we only had once an increase in a five years period - which I think the owner would have asked for even if we wouldn’t have claimed our money.
BONUS #1: Your rent decrease template letter
You can use the template letter (French) from Comparis to ask for your own decrease (also available in German here).
An English version is available here.
BONUS #2: Rate change automatic notification
UPDATE 24.11.2023: the Comparis notification tool doesn’t seem to exist anymore… so I recommend that you set a calendar reminder by putting this URL in the event title: https://www.bwo.admin.ch/bwo/de/home/mietrecht/referenzzinssatz.html (German) or https://www.bwo.admin.ch/bwo/fr/home/mietrecht/referenzzinssatz.html (French) (official Confederation website).
What if you could receive an automatic email every time that the reference mortgage rate decrease (or increase…) so that you could ask your owner to lower your rent (or be prepared for the raise…).
This is possible thanks to the awesome Comparis automatic mailing tool. Simply enter your email address in their form and voilà!
Also, share with us your own experience of requesting a decrease - and if you got a rent raise afterwards or not.
