Ground Rent

In a leasehold agreement, ground rent is paid to a landowner for the use of their land. Typically, ground rent is calculated as a percentage of a plot’s value. This lease rate can either be fixed or variable.

A fixed rate remains the same throughout the duration of the lease, while variable rates can be adjusted to match increases in the plot’s value. In Switzerland, variable lease rates are normally based either on average mortgage rates or on the Consumer Price Index.

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Leasehold agreements explained