Friday Aug 19, 2022

Guide to Buying Property In Switzerland

The Swiss real estate market is complex, especially for expats moving to Switzerland. The housing market is very competitive, and prices vary from canton to canton. There are many rules and legal boundaries when buying or selling property in Switzerland

Homeownership is not common in Switzerland. According to a report in 2016, only 36% of the Swiss population have their own house. The figure is one of the lowest in the world. Most Swiss residents prefer renting homes to buying. Some Swiss residents buy homes in rural areas as houses in urban cities are at a peak, especially in cities like Geneva and Basel. 

Renting or Buying: What’s better?

Switzerland is a hot property market in the world and very competitive. Expats prefer renting to buying like most swiss residents. Finding any property for rent is also quite a task here. However, renting is a better choice than buying even if you plan to settle here.

House Prices in Switzerland

The price of houses has been increasing every year by almost 80% between the years 2000-16. According to the recent update of 2020, the average price per square meter for buying an apartment in the city center is CHF 13,000 in Zurich, CHF 13,500 in Geneva, and CHF 14,000 in Lausanne. 

However, when it comes to transaction costs, Switzerland is one of the cheapest ones in Europe. It is only 0.25-3.55% of the final property cost for the buyer and 3.23-5.38% for the seller. Other costs of the buyer include-

  • Real estate tax- 0.2-3.3%
  • Registration fee- 0.15%
  • Notary fee- 0.1%

Legal Requirements 

The Lex Koller Law governs property buying and selling in Switzerland. According to non-residents can only buy property in the designated ‘holiday zones’ around Ski resorts and in Montreux and Lake Lugano. Also, you have to be either EU/EFTA nationals or residents with a C permit. The limit is only 200 sqm per person, excluding the balconies and basements. Tax laws differ between cantons and high for non-residents. Moreover, you should have a license to buy a property, and the criteria for this are different among cantons. 

Finding Property to Buy in Switzerland

Finding a property to buy in Switzerland is simple through various online portals and real estate agents available. You can also find many property portals in locals as well. Property online portals such as Homegate, ImmoScout24, Immostreet, and others are top places to look for property. If you are planning to buy through a real estate agency, you can buy from the Swiss real estate association and the Swiss union of real estate professionals. They are legal government agencies in Switzerland. You can also go for private agencies like Wincasa, Naef, Privera, SPG, etc. 

Buying a Property in Switzerland: Key Facts 

There are things one should know before buying property in Switzerland.

  • Purchase costs
  • Purchase process
  • Residency permits
  • Canton laws of the place you buy
  • Taxes to be paid before and after buy
  • Regional Restrictions 

Buying Process of Property In Switzerland

There is a process involved when trying to buy property in Switzerland.

  • Offering a purchase value or making an offer
  • Finalising it by a reservation contract
  • Applying for a mortgage
  • Appointment of a Notary
  • If you are a foreigner, you need to apply for the foreigner purchase limit
  • Signing the sale deed
  • Handover of the property after registration in Swiss court

Taxes To be Paid For Buying Property in Switzerland

There are taxes to be paid before and after buying a property in Switzerland. It is usually 0.6% of the purchase price per year. Foreigners have to pay taxes to three parties involving:

The Federal Government, The canton and the Commune.

The Taxes includes:

  • Income tax
  • Wealth tax
  • Property tax
  • Capital gains tax
  • Inheritance tax

Selling Property in Switzerland

Selling a property in Switzerland is easy by listing it on different websites and real estate portals. There are some stages involved in this process which are:

  • Making sure there are no building defects and getting a survey of the property
  • Setting a price of the property
  • Advertising it on different portals and websites
  • Analysing and accepting an offer to view the property
  • A notary has to be hired to build the sales contract
  • Exchanging deal contract and signing the sale deed
  • Paying the amount decided or any fees

Conclusion

Switzerland is famous for its exquisite locations and is an attractive place for real estate investors worldwide. Buying and selling property in Switzerland is pretty complex, but knowing all the required laws and facts will make it easier. The Lex Koller Law governs the legal requirements for property buying and selling.

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