A decrease in the reference mortgage rate gives Swiss tenants the right to request a corresponding rent reduction. This mechanism, provided by the Code of Obligations and the Ordinance on Residential and Commercial Leases (VMWG/OBLF), constitutes the symmetrical counterpart of the landlord's right to increase the rent in case of an increase in the same rate. PBM Avocats assists tenants in calculating, formulating and if necessary litigating their rent reduction requests in Geneva and Lausanne.
The Reference Mortgage Rate: Central Mechanism
The reference mortgage rate is published quarterly by the Federal Housing Office (FHO). It is calculated on the basis of average interest rates on all outstanding Swiss mortgage claims, weighted by volume. This rate constitutes the compass of Swiss tenancy law for any rent adjustment linked to real estate financing conditions.
Since its introduction in 2008, this rate has undergone significant evolution:
| Period | Reference Rate | Impact on Rents |
|---|---|---|
| 2008 (introduction) | 3.50% | Initial reference |
| 2015–2022 | 1.25% (floor) | Cumulative reductions possible |
| 2023 | 1.50% then 1.75% | Increases triggered |
| 2024 | 1.75% | Stable |
| 2025 | 1.50% | Decrease — right to reduction |
Calculation of the Rent Reduction
The calculation of the reduction to which the tenant is entitled is governed by Federal Supreme Court case law. The official method takes into account several factors:
1. The Reduction Linked to the Mortgage Rate
For each quarter-point (0.25%) decrease in the reference mortgage rate not yet passed on to the rent since its last fixing, the tenant is entitled to a 3% reduction in the net rent. It is essential to verify the history of past adjustments to avoid claiming a reduction already granted.
2. Partial Offset by Cost Increases
The landlord may oppose part of the reduction by invoking:
- The CPI increase since the last rent fixing (40% passable)
- Documented increase in operating costs (insurance, taxes, maintenance)
- Additional investments made on the building
| Reference Rate Decrease | Theoretical Rent Reduction | Example (rent CHF 2,000) |
|---|---|---|
| -0.25% (1 quarter-point) | -3% | -CHF 60/month |
| -0.50% (2 quarter-points) | -6% | -CHF 120/month |
| -0.75% (3 quarter-points) | -9% | -CHF 180/month |
| -1.00% (4 quarter-points) | -12% | -CHF 240/month |
The Rent Reduction Request Procedure
Step 1: Written Request to the Landlord
The tenant sends a written request for rent reduction to the landlord, indicating:
- The current reference mortgage rate and the rate applicable at the last rent fixing
- The calculation of the requested reduction
- The desired effective date (next contractual term, with 10 days' notice)
If the landlord agrees, a lease amendment or written confirmation suffices. If the landlord refuses or does not respond within a reasonable time, the tenant must apply to the conciliation authority.
Step 2: Application to the Conciliation Authority
In case of refusal, the tenant files a conciliation request before:
- The Conciliation Commission for Leases and Rents in Geneva
- The Justice of the Peace in the canton of Vaud
The 30-day deadline runs from the term for which the reduction was requested. The procedure is free of charge for residential leases in Geneva. If conciliation fails, authorisation to proceed is issued to apply to the court within 30 days.
Rights and Obligations of the Tenant
- The tenant has no obligation to request a rent reduction — but it is in their interest to do so
- The reduction request is subject to no specific limitation period during the lease
- The reduction granted takes effect from the term indicated in the request
- Rent overpaid since that date is reimbursable
- The tenant must continue to pay the current rent until a final decision
PBM Avocats helps you identify your rights to a rent reduction by analysing the history of rents in Switzerland and past adjustments to your lease. We perform the precise calculation of the reduction you are entitled to and represent you if necessary before the competent authorities in Geneva and Lausanne. To learn more about your rights regarding tenancy law, contact us.
Frequently Asked Questions About Rent Reduction Requests in Switzerland
When can I request a rent reduction in Switzerland?
You may request a rent reduction as soon as the reference mortgage rate has fallen since the last fixing of your rent and the landlord has not yet passed on this reduction. You may also request a reduction if you can demonstrate that the current rent generates an excessive yield for the landlord (art. 269 CO), or that operating costs have decreased. The request may be addressed to the landlord at any time, for the next contractual term, with 10 days' notice.
How do I calculate the rent reduction I am entitled to?
For each quarter-point decrease in the reference mortgage rate not yet passed on to the rent, you are entitled to a 3% reduction in the net rent. For example, if the rate has fallen from 3.25% to 1.25% (8 quarter-points) without any rent adjustment, the theoretical maximum reduction would be 24%. However, this reduction may be partially offset by increases in operating costs or the CPI since the last rent fixing. PBM Avocats performs this complex calculation for you.
Is the landlord obliged to accept my request for a rent reduction?
No, the landlord is not obliged to spontaneously accept the request. If they refuse or do not respond within a reasonable time, the tenant must apply to the competent conciliation authority (Conciliation Commission in Geneva, Justice of the Peace in Vaud) within 30 days of the next term for which the reduction was requested. If the landlord refuses without valid justification, the court may order the reduction and order the landlord to reimburse the overpayment.
Can I claim reimbursement of rent overpaid?
Yes. If the court recognises the right to a rent reduction, the reduction takes effect from the term for which it was requested in the legal forms. Rents received in excess from that date are reimbursable. However, the limitation period for claiming these amounts is 10 years (art. 127 CO). It is therefore important to act quickly and to comply with the legal forms of the request from the outset to maximise the potential reimbursement.
Is the reference mortgage rate the only criterion for a rent reduction?
No. Even if the reference mortgage rate has not fallen, the tenant may request a rent reduction if: (1) operating costs have decreased (reduced insurance premiums, energy savings); (2) the current rent provides an excessive net yield to the landlord relative to their invested equity (art. 269 CO); (3) the customary rents in the area are lower than the rent charged. These alternative criteria allow a challenge independent of the evolution of the reference rate.