Earning Income With Airbnb Rentals and Home Sharing in Switzerland

Online platforms like Airbnb and Booking.com have made renting out a vacant spare room, apartment, house, or holiday home easier than ever. But there are many important things to consider before you begin earning money with home sharing in Switzerland. This guide answers the most important questions.

Which online home sharing platforms should I use?

There are many different platforms on which you can advertise accomodations in Switzerland. These differ in terms of reach, target audiences, and pricing models.

Table 1: Online platforms for home sharing and short-term rentals in Switzerland:

Am I allowed to offer short-term rentals in Switzerland?

There are no federal laws that prohibit you from renting out a property you own for short amounts of time. However, you are required by law to declare paying guests from outside of Switzerland to the cantonal authorities, in keeping with article 16 of the Federal Act on Foreign Nationals and Integration. How this is done varies between cantons.

Additionally some cantons and municipalities have special regulations governing short-term rentals and home sharing (see Tables 2 and 3).

Additionally, if you want to rent out an apartment in a condominium, you also have to adhere to the condominium’s rules governing home sharing.

There are also countrywide laws that can play a role in certain cases. The laws governing acceptable rents, such as those outlined in articles 269 and 270 of the Swiss Code of Obligations, are one example. Another example is the Swiss law governing spatial planning, which stipulates that a maximum of 20 percent of a municipality’s homes can be used as secondary residences.

Note: The requirements provided here should only be considered a basic overview, and not legal advice. Because there are many different legal aspects of home sharing, consulting a law firm that specializes in real estate and tenant law in the municipality where your property is located is recommended. 

Table 2: Cantons with special rules governing short-term rentals and home sharing

Note: This list is not comprehensive. Regulations are subject to change.

Table 3: Municipalities with special rules governing short-term rentals and home sharing

Note: This list is not comprehensive. Regulations are subject to change.

Many cantons and municipalities that levy tourist taxes give tourists a pass for public transportation and/or other services in exchange for the tax. When this is the case, the onus generally rests on you to ensure that your guests receive their passes.

Some platforms collect tourist taxes from guests for you when bookings are made, in some cases. For example, Airbnb automatically collects cantonal tourist taxes for Basel-Landschaft, Basel-Stadt, Geneva, Zug, Zurich, and some municipalities in Vaud.

Am I allowed to sublet rooms in a property that I rent?

Before you can sublet a Swiss property that you rent, including renting out individual rooms or similar arrangements, you have to get the owner’s permission first. You can find detailed information in the guide to subletting in Switzerland.

In addition to laws governing subletting, you must also observe laws on short-term rentals and home sharing.

Do I have to pay taxes and social security on my income?

Income earned from renting out a property you own counts towards your taxable income. If you sublet a property you rent, only rental income that exceeds the rent you pay for the property is taxable.

Income earned from renting out your private property is not subject to social security contributions unless your rental activities qualify as self-employment.

Should I get insurance before I begin sharing my home?

Having personal liability insurance is recommended, because dealing with guests exposes you to liability claims.

Property insurance is mandatory in most cantons, and having buildings liability insurance for properties you own is also recommended.

Getting household insurance for the property in question can be beneficial if the furnishings are costly. 

Some home sharing platforms provide liability insurance and insurance for your personal property as a complimentary service. However, the scope of these insurance is more limited than regular Swiss personal liability and household insurance because they only cover situations directly related to a booking.

Does renting out a property affect my Swiss mortgage?

Sharing your home on platforms like Airbnb is not normally forbidden in Swiss mortgage agreements. However, it is important that you review your mortgage contract carefully for any clauses or limitations related to rentals and short-term rentals. 

If your Airbnb activity expands to where you consider buying one or more holiday homes to rent out, then you should be aware of Swiss mortgage requirements for holiday homes.   

How can I calculate my potential returns?

There are many factors that affect the possible income you could earn with short-term rentals in Switzerland. These include:

• Occupancy rates: Demand for short-term accommodations varies broadly from one location to another. Depending on where a property is located, you may have guests most of the time, or almost none of the time. Statistics provided by municipal tourist offices can provide a good reference point. Another good resource is the data collected by market research firm Airdna, which collects data about rentals on Airbnb. The Free plan from Airbnb lets you see average occupancy rates in many locations in Switzerland.

• Pricing: As with occupancy rates, location is the most important factor in determining how much guests are willing to pay to stay in your property. Other factors that can play a role include the available amenities (parking, a pool, or a sauna, for example), and historical or cultural value. 

• Running expenses: Whether you share a guest room in your own home or rent out an entire property, you will have costs in the form of time and money. Make sure to account for the platform fees, the cost of receiving and seeing off guests, cleaning the room or property, and managing the administrative work. You should also account for the added wear and tear and maintenance costs. If you own a property primarily for short-term rentals, you should account for the mortgage costs as well.

As a general rule, you should use very conservative estimations when calculating possible returns. Even if your property is in a popular tourist destination, when calculating possible returns you would be wise to use an annual occupancy rate which is lower than the average for your area (30 percent lower, for example). You should also use conservative pricing for calculations. Look at the prices being charged for similar properties in the same location, and add a substantial margin below that (20 percent, for example) to account for price fluctuations.

The exact opposite applies to expenses. Once you have added up all of your expected costs, add a wide margin for unexpected costs when calculating potential returns.

What are the risks of home sharing?

Damage to your property is the biggest risk of sharing your home. This is a particular concern if you rent out entire houses, apartments, or holiday homes and do not supervise the guests personally. The risk is lower if you only rent out guest rooms in your own home.

In terms of investing in property specifically to rent out on short-term rental platforms, future changes to housing laws are the biggest risk (in addition to standard property investment risks). Laws restricting home sharing are still in development. When planning a property investment, make sure to account for the possibility that you may not be able to rent out the home to tourists if laws change in the future.

Are there ways to passively invest in home sharing?

Currently, there are no exchange-traded funds (ETFs) or similar instruments that let you participate in short-term rentals in a completely passive way. This means investing in short-term rentals is generally limited to either owning or co-owning a property.

But there are companies that specialize in managing short-term rentals for you. In Switzerland, these include Airhosted and Guestready. Using these services eliminates the need for much active involvement in your short-term rental investment. However, the cost of using these services is relatively high. It is important that you carefully compare the costs with the benefits for you in the form of time and money saved. 

Table 4: Home sharing management services in Switzerland

Alternatively, you can also invest in the short-term rental sector by buying shares in the stocks of companies that operate home sharing platforms, and in Swiss real estate funds and companies.

More on this topic:
Compare Swiss mortgages now
Compare Swiss stock brokers now
How to invest in Swiss real estate