Reference interest rate increases: Landlords allowed to raise rents further

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The Federal Housing Office (BWO) announced the new reference interest rate. As generally expected, this rate rises to 1.75 percent.

This means that all rents currently set at 1.5 percent can be increased by 3 percent. This generally applies on the next termination date, i.e. April 1, 2024.

Important: Any rent adjustments can only be calculated on a case-by-case basis for the individual contractual relationship. Due to the development of the reference interest rate, only the net rent can be adjusted but the additional costs cannot be adjusted.

The reference interest rate is the average mortgage interest rate at which Swiss banks issue mortgages.

Second increase in a year

The reference interest rate increased from 1.25 percent to 1.50 percent on June 1, 2023. After no further increase in interest rates in September, there will be another increase in interest rates at the end of the year.

The reference interest rate is not the only important factor in determining rent. Other cost factors include inflation as measured by changes in the national consumer price index, as well as changes in maintenance and operating costs.

Source :Blick