Guide
Your landlord may offset a reference rate cut against certain cost increases – but only within legal limits: at most 40 % of inflation, documented or flat-rate general costs, and proven value-adding investments. A landlord who claims an insufficient return or local market rents must prove it.
Swiss rent law works with the so-called relative method: a rent change is justified by what has changed since the rent was last set. When the reference rate falls, the landlord's financing costs fall, and the rent must be reduced accordingly. But the ordinance also says the savings may be "offset against cost increases that have occurred in the meantime" (Art. 13 para. 1 VMWG). That is the legal basis for most landlord objections.
The key point for you: each offset has a legal limit, and the landlord must justify it. A reply such as "costs have risen, so no reduction" is not sufficient. The table below summarises the common objections.
| Objection | Legal basis | Limit / what must be shown |
|---|---|---|
| Inflation | Art. 269a let. e OR, Art. 16 VMWG | Max. 40 % of the CPI rise since the last rent setting |
| General cost increases | Art. 269a let. b OR, Art. 12 VMWG | Actual costs, or a flat rate (often 0.5–1 % p.a.) if accepted |
| Reservation | Art. 18 VMWG | Only if quantified in CHF or % in an earlier notice |
| Value-adding investments | Art. 269a let. b OR, Art. 14 VMWG | Only the value-adding share, work completed, receipts available |
| Local comparative rent | Art. 269a let. a OR, Art. 11 VMWG | At least five truly comparable flats (BGE 123 III 317) |
| Insufficient net return | Art. 269 OR | Full calculation; max. reference rate + 2 % (BGE 147 III 14) |
The landlord may compensate inflation only on the risk-bearing capital, not on the whole rent. The ordinance caps this at 40 % of the rise in the Swiss consumer price index (CPI/LIK) since the rent was last set (Art. 16 VMWG).
How to check: find the CPI value for the month of the last rent setting and the latest value (both on our reference rate and CPI page). Example: 106.2 (December 2023) to 108.6 (August 2026) is a rise of 2.26 %; 40 % of that is 0.90 %. If the landlord offsets 2 % or the "full inflation", the claim is too high. Also check the index base: leases before 2021 often quote the CPI on an older base (e.g. December 2015 = 100); values on different bases cannot be compared directly.
Higher maintenance costs, fees, property taxes, building-right interest and insurance premiums count as cost increases (Art. 12 VMWG). Costs from a change of ownership do not.
In practice, many conciliation authorities accept a flat rate of 0.5 % to 1 % per year since the last rent setting to avoid a detailed calculation. According to the Federal Supreme Court, however, cost increases must actually be demonstrated by a comparative calculation. You do not have to accept a flat rate; the Zurich tenants' association considers anything above 0.5 % per year excessive. Our calculator uses 0.5 % per year, so the result is realistic without being optimistic.
How to check: count the years since the last rent setting and multiply. For 2.8 years, 0.5 % gives 1.4 %; 1 % gives 2.8 %. If the landlord claims much more, ask for the comparative calculation with receipts, averaged over several years.
If a landlord did not fully pass on an increase they were entitled to in the past, they may reserve it – but only if the reservation is quantified in francs or as a percentage of the rent (Art. 18 VMWG). Such a reservation can later be offset against a reduction.
How to check: look at the last official rent notice or your lease. A sentence such as "reservation: 1.2 % inflation not yet passed on" is valid. General wording such as "all rights reserved" or "further adjustments reserved" is not a valid quantified reservation.
Investments that add value – a new kitchen with better fittings, an extension, additional services, energy-saving improvements – can justify a higher rent (Art. 14 VMWG). Pure repairs and maintenance do not: only the share exceeding the cost of restoring the original condition counts. For comprehensive renovations, 50–70 % of the costs are usually treated as value-adding. Subsidies received must be deducted.
How to check: was the work carried out after the last rent setting and not already charged through a rent increase? Is there proof of the costs? Was the investment really value-adding, or was it overdue maintenance?
A rent is generally not abusive if it is within the range of local rents (Art. 269a let. a OR). Some landlords reply to a reduction request that the rent is "still below market".
How to check: the landlord must prove this, concretely. According to the Federal Supreme Court, at least five comparable properties must be named (BGE 123 III 317) – comparable in location, size, fittings, condition and construction period (Art. 11 VMWG). Advertisements on property portals or general statistics alone are not enough. In practice this objection rarely succeeds against a reduction request.
The landlord may argue that even the current rent does not yield an excessive return (Art. 269 OR), so no reduction is due. This is the "absolute method". The landlord bears the burden of proof and must disclose the investment costs, financing and running costs.
Since the Federal Supreme Court's change of practice in October 2020 (4A_554/2019, published as BGE 147 III 14), the permitted net return may exceed the reference rate by 2 percentage points as long as the reference rate is 2 % or less – at today's 1.25 %, that is a maximum of 3.25 % on the equity, which is adjusted fully for inflation. For older buildings the calculation is often not possible because the original costs are no longer documented.
No. At most 40 % of the change in the Swiss consumer price index since the rent was last set may be offset (Art. 16 VMWG). If the CPI rose by 2 %, the landlord may offset no more than 0.8 %.
No. Many conciliation authorities accept 0.5 % to 1 % per year as a simplification, but legally general cost increases have to be substantiated. The Zurich tenants' association considers flat rates above 0.5 % per year excessive. You can ask for a comparative calculation with receipts.
If the landlord did not fully claim an earlier increase, they can record this as a reservation – but only quantified in CHF or percent (Art. 18 VMWG). Such a quantified reservation may be offset against your reduction; a general phrase such as 'all rights reserved' is not enough.
That is allowed, but the landlord bears the burden of proof and has to disclose the figures. Since BGE 147 III 14 (2020), the net return may exceed the reference rate by at most 2 points when the rate is 2 % or less – currently 3.25 %.
Ask for a written, quantified explanation. If the difference remains, you can apply to the conciliation authority within 30 days of the reply. The procedure is free and the authority reviews the calculation.
This guide explains the general legal position under Swiss tenancy law. It is not legal advice for your individual case. For disputes, contact your cantonal conciliation authority or a tenants' association.