Am I allowed to increase the rent after the renovation?

The core of the problem: Preserving value or increasing value?

The most important step for a successful rent increase after renovations is analyzing the construction invoice. You must check every single item.

1. Value retention (No increase)

Measures that restore the original condition are considered maintenance.

• Example: You replace 20-year-old windows with new windows of the same quality.
• Consequence: This does not justify any Rent increase after renovation . The tenant already pays rent to ensure the apartment remains in a usable condition.

2. Increase in value (increase possible)

Measures that increase value, save energy, or improve comfort.

• Example: You replace the old windows with triple-glazed soundproof windows.
• Consequence: Here, a rent increase after renovation is permissible, but only for the part of the costs that constitutes the "added value".

3. The mixed calculation (The normal case)

It's usually a mix. If you're replacing a 30-year-old kitchen, part of the cost is for maintaining its value (because the old kitchen was broken) and part is for increasing its value (because the new kitchen is more modern).

To calculate the rent increase after renovations, you need to identify the portion that increased the property's value. In practice, conciliation boards often accept flat rates:

• In the case of comprehensive renovations, 50 to 70% of the costs are often considered to increase the value of the property and are therefore relevant for rent increases after renovation .

How do you calculate the rent increase after renovation?

Let's say you've determined the value-enhancing portion of your investment. How does that translate into a monthly rent increase after renovations ? You can't simply pass the costs on to the rent. The formula is based on the interest and amortization of the invested capital.

Step 1: Interest on the capital

The money you invested must earn interest. The permissible interest rate for rent increases after renovations is based on the current reference interest rate (plus a small surcharge, currently often around 2% total interest, depending on the practice).

Step 2: Amortization

The new building components won't last forever. You are allowed to factor in the wear and tear when calculating the rent increase after the renovation .

• Example: A kitchen lasts 25 years (4% depreciation per year).

Step 3: Maintenance allowance

Since new equipment also costs maintenance, you can often add approximately 1% of the investment sum to the rent increase after renovation to cover future maintenance costs .

A calculation example:

• Value-enhancing investment: CHF 20,000.
• Interest + amortization + maintenance = approx. 6–7% per year (depending on the reference interest rate).
• 20,000 CHF * 6% = 1,200 CHF per year.
• Rent increase after renovation = 100 CHF per month.

This is a simplified representation. A precise rent increase after renovation requires a detailed breakdown, as errors here can invalidate the entire increase.

The formal way: No increase without a form

You can't simply announce a rent increase after renovations via email. Rental law is strictly formalistic.

1. The official form

In almost all cantons, you must use the form approved by the canton for a rent increase after renovations . If this form is missing, the rent increase after renovations is invalid.

2. The justification

On the form, you must clearly enter "additional services provided by the landlord" or "comprehensive renovation" in the "Justification" field. A transparent explanation of the rent increase after renovation (including a calculation) increases acceptance by the tenant and protects against challenges.

3. The deadlines

A rent increase after renovation is a unilateral change to the contract.

• You must adhere to the notice periods and deadlines stipulated in the rental agreement.
• The form for the rent increase after renovation must be sent to the tenant at least 10 days before the start of the notice period.
• The increase will only take effect on the next termination date.
• Important: You can only announce the rent increase after renovation once the construction work is completed and the final costs are available.

Funding and energy

a special case when it comes to rent increases after renovations .

If you have received subsidies (e.g. for a heat pump or windows), you must deduct these from the investment costs.

• rent increase after renovation, you may only use the amount that you yourself paid net .
• If you attempt to implement a rent increase after renovation based on the gross costs (without deducting subsidies), this is abusive.

When is arguing worthwhile?

Tenants have 30 days to contest a rent increase after renovations at the conciliation board.

A common argument is that the renovation was not necessary at all or is pure luxury.

To successfully implement your rent increase after renovations , thorough documentation is crucial. Keep all invoices, take before-and-after photos, and meticulously separate maintenance costs from the added value in the construction invoice. The more transparently you present the rent increase after renovations , the lower the risk of a lengthy legal battle.

Also consider this: An excessive rent increase after renovations can drive good tenants to terminate their leases. Sometimes a moderate adjustment is wiser than the mathematically maximum possible rent increase after renovations .

Conclusion

The question "Can I raise the rent after renovations?" can be answered with a clear "Yes, but only for the added value." Raising the rent after renovations is your right as the owner to recoup investments. However, it is not a way to make up for neglected maintenance.

The key to success lies in distinguishing between maintaining and increasing the value of the property. Use the standard flat rates (50–70%) if a detailed breakdown is difficult, and pay meticulous attention to deadlines and the official form. A correctly calculated rent increase after renovations is accepted by most tenants, as they appreciate the increased living comfort. An excessive rent increase after renovations, however, almost certainly leads to a dispute with the conciliation board.

If you are unsure how high the value-enhancing portion of your renovation actually is, or need support with the complex calculation of the rent increase after renovation , Loft offers data-based analyses to enforce your claims legally.

Glossary

• Value enhancement: The part of an investment that increases comfort or saves energy (e.g., installing an elevator). Only this part justifies a rent increase after renovation .
• Value maintenance: Measures that restore the original condition (repairs). These costs are covered by the existing rent and do not permit a rent increase after renovation .
• Official form: A mandatory document required to inform the tenant of a rent increase following renovations . Without this form, the increase is invalid.
• Comprehensive renovation: A major refurbishment in which many building components are renewed simultaneously. Flat rates (50–70% increase in value) often apply here for calculating the rent increase after renovation .
• Reference interest rate: The relevant interest rate for calculating capital costs. It influences how high the rent increase can be after renovation .