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Old 26.12.2011, 08:54
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Housing Allowance down 13%

We're expats with a huge multinational. We've been here two years and our lease is up and we need to find another house because the landlords are returning to our home. I was hoping our housing allowance has gone up a bit in the two years that we've been here so we can get a house with enough bedrooms for our kids. At this point, two of them are sharing a bedroom and the older one is going to be eleven in the spring and maybe he deserves to have his own bedroom instead of sharing with the eight year old. To our surprise, we've been told that our housing allowance has gone down by 13 percent because of some sort of third-party analysis of the housing market. Our company contracts out to a third-party to do these analyses and the allowance is based upon what is happening with the rental market and not about saving money for the company by squeezing the benefits of the employees. The company is a fantastic employer but they do their due diligence. I thought it was near impossible for rent prices to change because of some restrictions in Swiss law. So, I think the rent prices are the same but our allowance has gone down. Have rent prices really moved down that much in two years? I'm rather skeptical about the findings of the third-party and I want to know whether I'm really the one off-base or maybe them.

I know there are lots of you out there that would be grateful to have any housing allowance but my question is not about that and I don't want to get any flames about that part of the issue. We were sent here by our company and if we didn't have a housing allowance, we would never have come. Such is the reason for housing allowances to begin with.

Have rent prices really moved down that much in two years? By the way, the company offices are Lausanne and so the allowance is for rental properties in and around the Lausanne area.

Thanks
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Old 26.12.2011, 09:01
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Re: Housing Allowance down 13%

Search the forum for Referenzzinssatz. It has gone down and you can ask the landlord for a reduction in rental.

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Old 26.12.2011, 10:17
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Re: Housing Allowance down 13%

Sorry to hear about this : remember that moving will come with significant costs ( house cleaning, repairs etc ..) : will the company cover these for a mid term move ?

Just as an example we moved here in April 2008( same rent all that time) : and this Autumn because of a change in my circumstances I asked our landlord to reconsider the rent. He did so and reduced it by 8% using the official formula ( with no change to the extra costs ): It did take me to ask for this to happen. It now is also linked to the formula but suspect I will have to ask again as only recently I saw the interest rate used was reduced by 0.25% and nothing has changed for me. However I must say our landlord has been very fair and honourable over repairs etc so I cannot be bothered to chase everything down.
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Old 26.12.2011, 10:24
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Re: Housing Allowance down 13%

Are you sure that you are still in the period where you are given your full housing allowance?

Many companies offer a housing allowance at 'X' for 2 (or 3) years based on family needs, then the percentage the company pays declines in the 3rd, 4th and 5th years. And after 5 years, one must switch to a local contract.

This is because an expat contract is by definition temporary - there is an incentive to finish the project and move on - or to localize.

Anyway, just something to check out.

If that's not the case, and if you are only staying because your employer needs you (and not because you want to be here), then play hardball.

Try to negotiate a more favorable housing allowance, based on your family needs and *your* research into housing prices - that is, real prices on Homegate, and the difficulty you've encountered in being considered for such places. Remind your employer that as a foreigner you are at a disadvantage in the local housing market, you are seen as an undesireable tenant and so usually have to pay up to find something suitable. And remind your employer that your definition of suitable might not be the same as the Swiss norm. (Which is why they gave you an expat housing allowance in the first place.)

Of course, playing hardball means that you need to be prepared to be told that your services are no longer required. Make sure you can live with that alternative before you head down that road.

Good luck.
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Old 26.12.2011, 11:46
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Re: Housing Allowance down 13%

Thank you to all for the helpful information and suggestions. I will check whether the company has a sliding scale for housing allowance. I don't think they do since they would have mentioned this as the reasoning if it was. The reasoning given was that the third-party analysis of the rental market requires this adjustment.

The company will cover the expenses for the mid-term move because we are forced to move because the landlord wants his house back. If it was our idea to move, then we would have to cover all the costs etc.
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Old 26.12.2011, 12:07
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Re: Housing Allowance down 13%

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Have rent prices really moved down that much in two years?
I cannot speak for the Lausanne area but I can say that there are certain areas where expats with generous housing budgets have definitely pushed up the rents. This has happened in the Baden area since ZIS Baden opened its doors a few years ago. If families have a budget of say 6,000 per month, they want to use it all. Whether the object they find is worth that seems to be irrelevant.

The "Referenzzinssatz" reduction will take effect on April 1, 2012. The rate has dropped from 2.75%. Many of my clients have already received notices from their property managers advising them of the new rental amount. This is only on the basic rent.

At least your company is paying for the mid term move. Also ask if they will pay for the required professional cleaning, another big cost, as well as someone to assist you with the end lease inspection. There are small costs associated with moving, but I would not push for these and just pay them.

Will they provide you with support for a new house search? That would be something I would ask for. I understand your need for more bedrooms. It sounds like you are in a house, you might want to consider an apartment, rather than a house.

I know of another situation where owners wanted their house back. I advised the tenants to fight it as it was not a fixed term lease and from the start it was made clear the tenants were staying for a minimum number of years. However, the tenants being friends with the owners complicated matters and they opted to move.

Just be sure your owners have given you the proper notice, legally, as per the terms of the contract.
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Old 27.12.2011, 11:02
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Re: Housing Allowance down 13%

Thanks for the tips Mrs. Doolittle. It's good to know about the drop in rates as when we look at prospective properties, we can make sure they've adjusted the prices. Our move is not until the end of June.

The company in the past has always looked after all the details, including the smaller ones when we've had to move mid-term. We had to break lease in Indonesia when there were termites in the ceilings and they paid for everything. I imagine they will pay for the end of lease cleaning and the end of lease inspection. This is a forced move and any costs that we incur that are not of our own volition will be looked after by them. That includes a hiring of an agent to find our new home. I'll make sure the owners give proper notice. They said they are putting in the notice in January.

I guess my next question is how exactly is the reference rate used to affect the rent price. What exactly is the formula? I would be surprised if such a small change in rate-- 0.25 percent works out to a 13 percent decrease in housing allowance. I wonder if the "powers that be" know there is going to be a slow down in the economy or in the real estate market in the next six months. I read about the Euro crisis and I watch North American news so I know tons about the crisis the States is having in their economy/real estate market. But, I confess I have no idea how things stand in Switzerland. I was reading a thread about the housing "bubble" in Switzerland in these forums and that was the first I knew that this is a bubble. I assumed these were just Swiss prices which are famous for being astronomically high.

If the third party analysis says that prices are going down because of a downturn in the economy, I don't think the landlords have caught up because as far as I can see, prices are still high, high, high.

Thanks for everybody's input.
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Old 27.12.2011, 11:13
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Re: Housing Allowance down 13%

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I guess my next question is how exactly is the reference rate used to affect the rent price. What exactly is the formula? I would be surprised if such a small change in rate-- 0.25 percent works out to a 13 percent decrease in housing allowance. I wonder if the "powers that be" know there is going to be a slow down in the economy or in the real estate market in the next six months. I read about the Euro crisis and I watch North American news so I know tons about the crisis the States is having in their economy/real estate market. But, I confess I have no idea how things stand in Switzerland. I was reading a thread about the housing "bubble" in Switzerland in these forums and that was the first I knew that this is a bubble. I assumed these were just Swiss prices which are famous for being astronomically high.
What is the Referenzzins on your rental agreement? The Referenzzins went down to 2.45% on 20th Sept 2011. Ours was 3.5% when we were renting, so that's 30% decrease.

http://www.gkuhn.ch/index.php/aktuel...mieten-gesenkt
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Old 27.12.2011, 19:30
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Re: Housing Allowance down 13%

I guess this is very good news for those of us who have to pay our rent out of our modest taxed salaries.
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Old 27.12.2011, 21:56
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Re: Housing Allowance down 13%

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I was hoping our housing allowance has gone up a bit... To our surprise, we've been told that our housing allowance has gone down by 13 percent because of some sort of third-party analysis of the housing market... The company is a fantastic employer but they do their due diligence.
...colour me jealous. I'd love a housing allowance. Is your employer hiring?
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Old 27.12.2011, 22:05
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Re: Housing Allowance down 13%

How about moving slightly further away from the Lake, towards the foot of the Jura or Yverdon, where your money will go much further and were much larger properties are available?
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Old 31.12.2011, 10:00
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Re: Housing Allowance down 13%

Thank you to everyone for your input. My last question was not really addressed so I wonder if no one really has a reply. Is the economy in Switzerland slated for a downturn and that's why the rent is predicted to go down.
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Old 31.12.2011, 10:02
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Re: Housing Allowance down 13%

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I guess this is very good news for those of us who have to pay our rent out of our modest taxed salaries.
Only if the economy in Switzerland is not taking a turn for the worse. I'm wondering if this may be part of the reason for the lowered housing allowance. No one seems to know. If the economy is taking a turn for the worse, your salaries will do down in commensurate.
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Old 31.12.2011, 10:05
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Re: Housing Allowance down 13%

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...colour me jealous. I'd love a housing allowance. Is your employer hiring?
They are a multinational company and very large so I assume they do hire continually. But, to get a housing allowance, you need to be hired from overseas and only if they think you have skills that are worth paying extra in a form of expat "perks" like housing allowance. As well, if they think your skills can not be duplicated by a local already living in the area. Good luck.
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Old 31.12.2011, 10:07
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Re: Housing Allowance down 13%

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What is the Referenzzins on your rental agreement? The Referenzzins went down to 2.45% on 20th Sept 2011. Ours was 3.5% when we were renting, so that's 30% decrease.

http://www.gkuhn.ch/index.php/aktuel...mieten-gesenkt
Thank you VERY much. I will check the referenzzins on our rental agreement. I had not even heard of "referenzzins" prior to this thread. This will help me with the math and help us understand what is really happening. Cheers.

Last edited by MusicalMommy; 31.12.2011 at 11:09.
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