Airbnb in Switzerland: Home Sharing Mistakes to Avoid

The Internet has opened up numerous opportunities for enterprising individuals to earn supplementary income. A business model that started off with web auctions and online car-boot sales that let us sell goods to a broad audience has begun to encompass every aspect of our lives. Online services like HouseTrip, Wimdu and Airbnb now let us rent out rooms and holiday homes to people from all corners of the planet with minimal administration.

But although signing up with these portals may be easy, it is important to understand that all legal and financial responsibilities ultimately rest with you. Not following correct procedures can lead to your paying heavy fines or losing your home. To help you get around the lack of Swiss-relevant information provided by these typically foreign-based online services, moneyland.ch has listed the biggest mistakes to avoid when sharing your home for money in Switzerland.

1. Not meeting legal requirements

The simplicity of home-sharing portals tends to detract from the complex realities involved with what essentially amounts to operating a hospitality business. Depending on the municipality and canton you live in, sharing your home for a fee may come with various legal requirements. Some municipalities (like the city of Bern) require that you register as a hospitality service provider before renting out or subletting your home via home-sharing services.

If you plan to provide food or meals as part of the service, things can become more complicated. Depending on the canton you live in, the frequency with which you share your home, the number of guests you serve and whether or not you serve alcohol, you may need to obtain a gastronomic license. In some cantons, regular hygiene inspections by a recognized laboratory may be obligatory. In the canton of Zurich, for example, a hospitality license is compulsory for anyone who provides food or drinks for pay – but only if alcohol is served or if dining capacity exceeds 10 guests.

If your shared home qualifies as a guest house or dining establishment, you may be subject to laws regulating active and passive tobacco consumption. It is crucial that you research local regulations because failing to meet legal requirements can lead to hefty fines or even prosecution.

2. Not following subletting guidelines

If you rent your home and are considering sharing it for a fee via Airbnb or another home-sharing platform, you will have to make sure to follow the correct legal procedures for subletting your rental home in Switzerland. The process involves getting your landlord’s (written) approval to sublet and most importantly, not earning a profit (a 20% markup on the rent you pay is permissible if you have furnished your rented home).

Not following the correct procedure for subletting your home can serve as sufficient ground for an eviction. It is worth noting that some property management groups and housing cooperatives actively search home sharing platforms for unauthorized listings of properties they manage.

3. Charging inflated rents

Even if you own your own home, there are legal guidelines which affect Airbnb rentals. Article 269 of the Code of Obligations of the Federal Act on the Amendment of the Swiss Civil Code prohibits property rentals from which landlords derive excessive income.

As a general rule, income earned through renting out property must be in keeping with average rents in the municipality and with consumer price indexes. This limits the combined income which you can earn from short-term rentals to amounts similar to the average monthly rent which could be charged for the same property.

There are some exceptions to this rule. Properties designated as luxury housing – including single family homes with more than 6 bedrooms – do not fall under this rule. You can also charge above-average rents if you can justify the higher rent with higher costs (including the cost of extra services provided such as cooking, transportation or cleaning). High rents may also be permissible if they are required to balance investment risk, or if they fall in line with standards set by homeowners’ and renters’ associations.

4. Not being properly insured

Opening your home to strangers makes you vulnerable to numerous hazards. Some portals offer some form of deposit or guarantee to cover possible damages. For example, HouseTrip holds a deposit paid by the guest for 7 days after the rental ends, giving you time to claim if a guest damages your property. Airbnb offers a “guarantee” against damages.

If you sublet a rented home, liability for damages inflicted by guests ultimately falls on you. Make sure you have personal liability insurance which includes coverage for damages caused by guests. Most household insurance policies cover theft of guest property held in your house, but place limitations on coverage for cash, credit cards and other valuables. If you rent out rooms often, getting legal expenses insurance can protect your finances from the possibility of law suits being filed by disgruntled guests. You will also want to ensure that foreign guests have proper health insurance to avoid finding yourself in an awkward position if a medical emergency occurs.

5. Being ignorant of tax requirements

Getting your taxes wrong is one of the biggest risks involved with earning money through home sharing platforms. The tax information on local Swiss pages of portals like Airbnb is sketchy to say the least, and certainly does not provide tax information for all of Switzerland’s municipalities. That means it is mostly up to you to track down relevant tax information ahead of your home sharing endeavor.

Paying income tax on your home-sharing earnings goes without saying, but other applicable taxes are less obvious and vary between cantons and municipalities. When you share a home in the City of Bern, for example, you are required to pay 4.30 Swiss francs in hospitality taxes per home-sharing guest per night. Airbnb now has agreements with some municipalities by which it levies hospitality taxes along with payments when users make booking on the platform. If you plan to let or sublet your home or holiday home, make sure to look into possible hospitality taxes levied by the municipality or canton in which the property is located. Also note that supplemental income in excess of 2300 francs per year is subject to social security contributions.

6. Not accounting for all costs

Finding new markets for your services is a definite positive, and widely-used apps and websites offer huge value in this regard. The commissions you pay to home-sharing portals are relatively low (typically 3% of your rental income) considering the exposure you are getting.

However, on top of that commission, you will likely have other added expenses like insurance premiums and taxes as well as higher maintenance and utility costs. If you are renting out a holiday home, calculate the costs of traveling to receive and see off your guests (or to have someone else do so on your behalf). Also account for time spent cleaning or the cost of hiring cleaning services between guests. If you plan to share rooms in your rental home, consider the time and effort involved with following subletting procedures. Make sure to figure all possible costs into the equation before settling on a price that is worth your while.

More on this topic:
Guide to subletting rented homes in Switzerland
Interactive mortgage comparison