Rent reduction: This way you don’t pay more rent than you need to
A rent reduction is the reduction in rent that tenants can ask for – for example, in the event of a lower reference rate or a defect in the rental property. The mortgage reference interest rate has stood at 1.25 percent, the all-time low, since September 2025, and was reconfirmed by the Federal Housing Office (FHO) in September 2026.
For many tenants, this means that you should check whether you are entitled to a rent reduction. However, the rent reduction never comes of its own accord. You must actively demand a reduction from your landlord.
When are you entitled to a rent reduction?
You are entitled to a reduction in four cases:
- Lower reference rate on which your rent is based
- Defect in the rental property that restricts use
- Discontinuation of agreed services such as elevator, laundry room or cellar
- Wrongful initial rent
For the reference rate, the benchmark is the net rent. Under no circumstances does a rent reduction take effect automatically - you must submit a request for one.
Depending on the reason, different rules apply to the amount, deadlines, and procedure. The overview shows the most important differences:
Rent reduction: Reference rate vs. defects in rental property
| Criterion | Lower reference rate | Defect in rental property |
| Trigger | The reference rate on which the rent is based has decreased | Defect restricts use of the apartment |
| Amount | Fixed percentage, depending on the starting rate | Depending on impairment; no statutory table |
| Assert with | Written request for reduction | Written notice of defects |
| Effective date | On the next termination date in compliance with the notice period | From notification of defects to rectification |
| Retroactive effect | None | Retroactive from the date of notification of defects, subject to a 5-year limitation period |
| Involvement of mediation authority | 30 days after receipt of rejection; 60 days after dispatch of request if no reply | No fixed deadline; 30 days on deposit of rent |
How much rent reduction can you demand?
If the reference rate falls by 0.25%, entitlement to the reduction of 2.91% of the net rent arises. The value at the time the contract was signed or at the time of the most recent rent adjustment is used. This can be found in the rental agreement or in the last advertisement by the landlord.
The reference interest rate currently stands at 1.25%, which has been valid since September 2, 2025, and was confirmed on September 1, 2026. The BHO publishes the reference interest rate quarterly, in March, June, September and December. The next publication will follow on December 1, 2026.
In the event of a reduction in rent, entitlement to the reduction amounts to 2.91%, as long as the reference rate is below 5%. As a rule of thumb, there is an entitlement to a reduction as soon as the rent is still based on a reference rate of 1.5% or higher.
The amount of the rent reduction depends on the basis on which the current rent is calculated. In the event of a reduction based on the reference rate, 40% of inflation and general cost increases can be applied.
Rent reduction at reference rate 1.25%
| Your rent is based on | Entitlement to reduction |
| 1.50% | 2.91% |
| 1.75% | 5.66% |
| 2.00% | 8.26% |
How much is the rent reduction in the event of a defect?
The amount of rent reduction depends on the extent to which the defect impairs use of the apartment. There is no statutory table with fixed percentages. Court practice ranges from a few percent for a defective appliance to 100% if the apartment is no longer habitable.
In order for an entitlement to be granted, three conditions must be met:
- You did not cause the defect yourself
- The defect is not a minor maintenance issue that the tenant must pay for themselves
- The landlord has been informed of the defect and the claim for the reduction, preferably by registered letter
Entitlement begins on the date on which the defect is reported and lasts until the defect has been rectified.
Examples from Swiss court practice
| Defect | Reduction |
| Dishwasher not usable | 3% |
| Elevator failed, apartment on the 4th floor | 10% |
| Large construction site with significant noise emissions, location and condition of the apartment taken into account | 10-20% |
| Room temperature in the winter months permanently between 15 and 18 degrees Celsius | 20% |
| Renovation work in the apartment above | 25% |
| Water damage in all rooms | 40% |
| Apartment uninhabitable due to heating failure | 100% |
How do you submit a reduction request?
Submit a request for a reduction in your rent by asking your landlord in writing – ideally by registered mail and in good time before the notice period. The following procedure is recommended:
- Check the reference rate in your rental agreement: compare the value recorded there or in the last adjustment to the current level of 1.25%. If the previous value is higher, there is an entitlement to a reduction.
- Clarify entitlement in advance: the landlord can offset an amount for inflation as well as increased operating and maintenance costs. The actual entitlement to a reduction is therefore lower than the pure interest rate difference. A reservation for rent that is stipulated in the contract, also known as a rent reserve, can also be set off against the entitlement. This means that the landlord reserves the right to increase the rent at a later date. Depending on the level of the proviso, your reduction may therefore be lower or there may not be one at all. You should therefore calculate your entitlement before applying, for example using the tenants’ association’s rent calculator. If you’re unsure, it’s best to seek legal advice.
- Formulate request in writing: request a reduction in net rent due to the lower reference rate and request a response within 30 days. A sample letter or form for a rent reduction makes it easier to formulate, e.g. the MyRight template.
- Send by registered mail: send the letter so that it reaches the landlord before the end of the notice period.
- Await and check reaction: if the reduction is not achieved in full or in part, consider the next steps and seek advice in good time.
You can submit the request at any time, but it only takes effect from the next termination date in compliance with the notice period. The following applies to all other periods: the landlord has 30 days to submit a response. An unjustified rejection can be contested via the arbitration office within 30 days of receipt. In the absence of a reply, the period is a maximum of 60 days from dispatch of the request.
How does legal protection insurance support you?
In the event of a dispute about a rent reduction, your legal protection insurance will help you from the first check to the mediation process.
- Review your rental agreement and calculate entitlement to a reduction
- Formulate a request for a reduction
- Review the landlord’s response
- Assistance with mediation proceedings, including payment of attorney’s fees and court fees
Frequently asked questions about rent reductions
What should I do if the landlord refuses to accept a rent reduction?
If your application is rejected, you must ask for a written reason and have it checked. If the landlord still refuses, you can contact the arbitration office.
If the landlord does not respond to a request, this is also deemed to be a rejection. The conciliation procedure is free of charge in rental matters and aims to reach an agreement. If no agreement can be reached, the case can be taken to court. Legal support is recommended and costs are incurred.
Fixed procedural deadlines apply to the reference rate. After a refusal, you have 30 days to call the arbitration office. In the event of a defect, this period does not apply. The claim arises from the time when the landlord becomes aware of the defect until the defect has been rectified. A limitation period of five years applies.
Do you receive the rent reduction automatically?
No, the tenant must actively request a reduction in rent due to a decrease in a reference rate. The law stipulates that a written request for a reduction must be submitted to the landlord. Only a few landlords grant a corresponding rent reduction of their own accord.
If, on the other hand, the rental property is defective, a written notice of the defect is sufficient. For reasons of proof, this should preferably be sent by registered mail.
Can you ask for a rent reduction retroactively?
The reference rate does not apply retroactively; the rent reduction only applies from the next termination date. In the event of a defect, the claim shall run retroactively from the date of notification of the defect, subject to the limitation period of five years.
Can the rent increase if the reference rate goes up?
Yes, the reference rate works both ways: a higher rate may result in an increase in rent; a lower rate may result in a reduction.
In addition, landlords can also increase rent for other reasons, such as increased inflation, higher operating and maintenance costs, or renovations that increase the value of the apartment.
Written by:
Nadine Graf
Nadine Graf is a theme manager and writes texts for AXA on topics related to insurance and beyond.
