Everything you need to know about index-linked rents in Switzerland: how they work, CPI, calculation, advantages and disadvantages for commercial properties.
When determining the rent for office and commercial space in Switzerland, the parties are generally free to agree on the rent, but it is subject to judicial review for abuse (Art. 269 OR). In addition to the usual adjustments (relative method), there are special models such as the Swiss index-linked rent (Art. 269b OR) and the graduated rent (Art. 269c OR), which are largely independent of the ordinary grounds for adjustment. Index-linked rent is a particularly relevant mechanism for long-term commercial leases involving tenant investments.
Index-linked rent, regulated in Article 269b OR, links the rent to the development of the national consumer price index (CPI) published by the Federal Statistical Office (FSO).
Two mandatory requirements must be met:
Minimum contract term: The contract must be concluded for at least five years (non-terminable by the landlord).
Index basis: Only the CPI may be used as the index.
The tenant may be granted an earlier right of termination in the contract. The landlord's five-year commitment is the consideration for being allowed to pass on the full cost of inflation (100%) via the CPI, unCPIe with the relative method (max. 40%).
With index-linked rent, the net rent is adjusted by 100% in line with changes in the CPI. If the CPI rises by 2%, the rent can be increased by 2%; if it falls, the rent must be reduced accordingly (Art. 17 para. 2 VMWG). This differs from the relative method (Art. 269a OR), where only 40% of inflation is taken into account and the reference interest rate and cost increases also play a role. With index-linked rent, these other factors are irrelevant during the indexation period. The adjustment is based on the percentage change between the base index (at the time of the last determination) and the current index level.
The following conditions must be met for an indexation clause to be valid:
Minimum contract term of 5 years: Non-terminable by the landlord.
Reference index CPI: Exclusively the CPI of the FSO.
Written agreement: The clause must be included in the contract and clearly define the base index.
No combination with graduated rent: Index-linked rent and graduated rent may not be combined (BGE 124 III 57).
If these conditions are not met, the clause is void. An increase that has been formally communicated correctly (official form, justification) but is based on a void clause must still be contested within the specified period in order to become invalid.
The national consumer price index (CPI) is Switzerland's official instrument for measuring inflation. It is calculated and published monthly by the Federal Statistical Office (FSO). The CPI is based on a so-called basket of goods, which contains a representative selection of goods and services consumed by private households in Switzerland. These include expenditure on food, housing, energy, transport, health, leisure and much more.
The development of the CPI is expressed as an index figure. A specific point in time (month/year) is set as the base period and its index level is set at 100 points. If the index rises to 105 points, for example, this means inflation of 5% compared with the base period. The FSO publishes the CPI on various bases (e.g. December 2020 = 100, December 2015 = 100, etc.). When calculating rent adjustments, it is crucial that the same index base is used for both the base index (at the time the contract was concluded or the last adjustment was made) and the new index value.
The following table shows the development of the CPI on the current basis of December 2020 = 100 for the last months up to the most recent available status (March 2025 and basis December 2020 = 100):
| Month/Year | CPI Value |
|---|---|
Jan. 2024 | 106.4 |
Feb. 2024 | 107.1 |
March 2024 | 107.1 |
Apr. 2024 | 107.4 |
Mai 2024 | 107.7 |
June 2024 | 107.7 |
July 2024 | 107.5 |
Aug. 2024 | 107.5 |
Sept. 2024 | 107.2 |
Oct. 2024 | 107.1 |
Nov. 2024 | 106.9 |
Dec. 2024 | 106.9 |
Jan. 2025 | 106.8 |
Feb. 2025 | 107.4 |
March 2025 | 107.5 |
The exact definition of the base index in the rental agreement – i.e. the specific CPI value (e.g. 101.5 points as of December 2021 based on December 2020 = 100) and its base period (December 2020 = 100) – is of crucial importance. This value specified in the agreement serves as an unchangeable starting point for all future rent adjustment calculations. Inaccuracies in this specification can lead to disputes later on, as the entire development of the rent depends on it.
The calculation of a rent adjustment based on an index clause follows a clear formula. Let's assume that a commercial lease was concluded with a monthly net rent of CHF 5,000. The index clause refers to the CPI with a base value of December 2020 = 100. The relevant index level at the time the last rent was set (base index) was the level in March 2024, which was 107.1 points. The landlord now wants to adjust the rent based on the index level of March 2025 (new index), which is 107.5 points.
The calculation is done in two steps:
Calculation of the percentage change in the index: The formula is: ((New index − Base index) / Base index) × 100. Substitute the values: ((107.5 − 107.1) / 107.1) × 100 = (0.4/107.1) × 100 = 0.3735%
Calculate the new rent: The formula is: New rent = Previous rent × (New index/Base index). Insert the values: New rent = CHF 5,000 × (107.5/107.1) = CHF 5,018.67
The new monthly net rent would therefore be CHF 5,018.67. The increase amounts to CHF 18.67 per month.
Although the calculation is mathematically simple, the devil is often in the details. It is crucial to use the correct index values (same base period, correct month) and to correctly identify the base index specified in the contract or in the last adjustment. Errors here can invalidate the entire adjustment. The timing is also important: the landlord may only announce the increase after the new index level has been officially published by the FSO. Retroactive claims for missed increases are excluded; the adjustment only applies for the future. Careful documentation and observance of the FSO publication dates are therefore essential for landlords.
Agreement in the contract: The index clause must be in writing and specify the CPI and the exact base index (value, level, base period).
Notification of the adjustment: Any adjustment must be made using an officially approved form. The form must contain the old and new rent, the date of entry into force, a clear justification (index clause, base and new index) and a reference to the possibilities of appeal (Art. 19 para. 1 VMWG). The notification must be sent at least 30 days before the effective date at the end of a month and may only be sent after the new CPI has been published. Formal errors will render the adjustment null and void.
Advantages for landlords:
Inflation protection.
Objective basis for adjustment (CPI).
Long-term commitment (5 years).
Disadvantages for landlords:
Other costs (interest, etc.) cannot be passed on separately.
Minimum commitment of 5 years.
No increase in the event of CPI stagnation/decline.
No retroactive application.
Advantages for tenants:
Transparency through CPI.
Protection against other reasons for increases (interest, costs).
Long-term location/planning security (5 years).
Entitlement to a reduction if the CPI falls.
Disadvantages for tenants:
Full inflation risk (100% CPI).
No benefit from interest rate cuts.
Limited right of appeal (only calculation, Art. 270c OR).
Budget uncertainty in the event of volatile inflation.
Graduated rent (Art. 269c OR): Rent increases by fixed amounts at fixed times. Minimum term 3 years. Absolute predictability, independent of CPI/interest rates. Combination with index-linked rent not permitted.
Relative method (Art. 269a OR): Adjustment in the event of changes to the reference interest rate, costs; inflation (CPI) only up to a maximum of 40%. Applies to open-ended contracts or after the expiry of fixed terms. Reflects costs, but is more complex.
Index-linked rent is common for commercial premises (offices, shops, etc.) in Switzerland for the following reasons:
Usually long contract terms (≥ 5 years).
High tenant investments (renovation) require amortisation period and secure duration.
Perceived predictability due to CPI coupling.
Attractive for investors (inflation protection).
Index-linked rent is less common for residential properties.
Important points from case law:
Contestation during the term: Only possible due to incorrect calculation (Art. 270c OR).
Flexibility for tenants: Right of termination for tenants permissible before 5 years (BGE 112 II 69).
Prohibition of combination: Index-linked and graduated rent cannot be combined (BGE 124 III 57).
After expiry of the indexation period: transition to the relative method. Tenants can then no longer claim the absolute method (return test) (BGE 147 III 32). Requests for adjustment must be made in good time before the end of the indexation period in order to claim full interest rate changes since the beginning (BGer 4A_252/2023).
Index-linked rent in Switzerland (Art. 269b OR) is an important instrument for commercial leases. It requires a minimum term of five years (for landlords) and links the rent 100% to the CPI. Strict formal requirements for agreements and adjustments must be observed. It offers predictability and protection against inflation, but also entails risks in the event of high inflation. The distinction between the graduated and relative methods is clear. Due to the long-term nature and financial implications, care must be taken when drafting and adjusting contracts.
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