View over Murren to the Eiger. - (c) Jungfrau Tourism
Buying a property abroad, be it a holiday home, an investment to rent out, a place to retire to, or even a permanent residence, is something many people dream of, but few people do. For those people who are lovers of winter sports, the Alps, or just the mountains in general, owning their own property in an alpine country such as Switzerland is undoubtedly an idea that would appeal, but how would you go about it ? What are the restrictions ? And how much is it likely to cost ?
Buying your own property in Switzerland is certainly possible but admittedly it's harder than it's alpine neighbours and other European countries due to the country's various property laws and restrictions imposed on foreigners, many of which vary from canton to canton.
And Swiss properties don't come cheap. The last few decades in Switzerland has seen the classic property combination of a limited number of accommodation stock and an increase in the size of the population, resulting in a rise in property prices in a market that was already rather expensive. These high prices have given rise to a culture of renting properties, rather than owning, amongst many Swiss citizens, especially in the cities and urban areas, although as you move out of the cities and into the Swiss countryside and mountains property ownership increases.
If all this hasn't put you off, and you're still interested in looking to buy a property in Switzerland, as either your main residence or maybe a holiday home or an investment to rent out, then read on for further details on the main issues surrounding purchasing a property in Switzerland...
This is the key question that any non-Swiss citizen thinking of buying a property in Switzerland needs to look at in detail straight away.
The short answer is yes. And no !
Yes, in that if you follow the rules and regulations then you are allowed to purchase one Swiss property. And no, in that it depends on which canton of Switzerland you're looking at buying a property in.
There are a number rules and regulations regarding who can buy property, here are some of the basic guidelines that we've come across:
If you don't meet any of the above criteria, for example if you're a non-resident EU national, then purchasing a property in Switzerland is harder, and there are more restrictions. For instance, some cantons have now stopped foreigners from purchasing a property if they don't meet the above criteria. However, there are some cantons who still allow it, and you can apply for a purchasing licence once you've found a property you're interested in.
Lex Friedrich Law: Each canton has an annual number of properties it can sell each year to non-Swiss buyers. Notary will obtain authorisation through the relevant canton authorities (including the police).
See the canton map. Certain areas have decided not to let foreigners buy properties there. The Lex Friedrich law specifies what can be purchased.
The advent of the internet has made finding a property so much easier than it was a decade or ago. So as with most other western countries, you can now see the vast majority of Swiss properties that are for sale online.
If you are physically out in Switzerland then you will obviously come across plenty of estate agents to browse in, and also plenty of free property papers and magazines, usually given away for nothing outside the estate agents or in popular community areas such as supermarkets and shopping centres.
Most Swiss estate agents will let you register with them so that if any specific properties become available then you can be informed straight away. Luckily many estate agents, particularly the large ones, will let you do this online, selecting your property criteria such as area, price range, property size etc from pick-lists on a web page.
Popular Online Property Sites include:
Large online Estate Agencies:
In Switzerland you can make offer through estate agent or to seller directly. The sale is actually handled by a notary. When offer accepted a deposit may be needed. Notary organises this and if required will hold deposit in escrow account A notary serves both the buyer and the seller, they are public officers of the district the property is located in.
The notary looks after the following: Draws up deeds and legal contract documents. Holds buyers fund in escrow. Complete transfer of the property. Register change of ownership of property. Complete all legal formalities and requirements.
Notary fee is approximately 5% of sale price. This covers: Notary fees. Property transfer tax. Registering deed with land registry office. Government purchase tax. In some cantons notary fee is split between buyer and seller but more often than not buyer will be responsible for paying for it
Surveys: Unlike the UK, it isn't common practice to have a full survey done on a property that you are trying to buy. However, this doesn't mean you can't do one, and if you want to make sure of exactly what the condition is of the property then spending money on this may be a good idea.
How Long Does it Take to Complete a Property Purchase in Switzerland ? Obviously the longest amount of time can be finding a property. Once you've done that and made an offer you will need to find a Swiss mortgage company, agree the purchase terms, then sign the contract. As an approximate guideline, typical fees and charges would be between 3% and 5% of the property price. Expect this to be a minimum of three months, but possibly more.
Mortgages: In Switzerland if you are going to make an offer to buy a property they will often want you to confirm that you definitely be ok to get a mortgage, so it's best to make contact with mortgage providers beforehand to make sure that you will be able to get hold of the mortgage amount that you need. In Switzerland mortgages are mainly done directly with banks rather than through broker services. 20% deposits are typical. Have a look at UBS.
Remember, once you've actually signed on the dotted the line and agreed to purchase a property, the fees don't stop there. As with any other country, there are annual taxes and charges for properties, see our section below regarding this.
The mortgage, obviously. Local taxes - these include a Swiss government tax, a canton tax and a commune tax. These taxes can vary from canton to canton, as well as different communes. You can roughly expect these taxes to amount to an annual fee between 1 to 1.5% of the purchase price. Remember to make sure you find out what the annual tax charges are so you don't get a nasty surprise. annual Expenses Taxes - you are likely to be paying tax on the property each year of a figure in the region of 1.5% to 2% of the property price This figure is made up of a number of taxes paid to 3 bodies (change word here): Federal Tax - Government of Switzerland Canton Tax - The Canton the property is in Communal Tax - The commune the property is in These taxes are made up of a number of smaller figures, ranging from land tax, tourist tax, wealth tax etc. Co-ownership charges -listed these already Hidden Extras many properties will have annual maintenance and service charges to pay, especially apartments in shared blocks, or houses that have private roads, shared drives, parking etc. As an approximate rule of thumb, the annual service fee can expected to often be around 1% of the purchase price, but always be aware of this and get the exact figure from the seller or estate agent as they should be able to supply it. The cost is usually done in similar proportions to the size of the apartments. So if you have a 2 bedroom apartment in a large complex then you can expect to be paying much less than someone with the 5 bedroom penthouse suite ! The service charge often includes the following: (all these are in my own words, just change the order around and add some new ones) Caretaker fees General building maintenance and upkeep General gardening maintenance and upkeep General road/drives/path maintenance and upkeep Utilities (electricity, gas, water) Insurance Building renovation fund (long-term fund for possible future work)