Switzerland: A buyer’s guide

There are two main types of foreign buyers in Switzerland – those who are very rich and are looking for a low-tax haven, and those who are interested in winter sports and are looking for a property in a premier mountain location. The popularity of Switzerland means that property prices and the cost of living are high, however due to the high demand, it can be a good place for foreign property investors to buy.

If you are looking for a property in western Europe that offers spectacular scenery, tasty food and a diverse culture, Switzerland may just be the place to buy.

Legal
Switzerland is not a member of the EU however citizens of the EU do not need a visa to visit the country – all that is required is a valid passport. Non-residents are allowed to stay in the country for up to three months at a time. When this period is up, you must leave the country for a month before returning and you are not allowed to spend more than six months per year in the country.

The Buying Process
Property ownership rules are fairly complex and it is recommended that you get a good solicitor to help you out. If you are a permanent or short-term resident, you should have the same rights to buy as a Swiss citizen.

If you do not have residency, it get a little more complex – you first must apply for a permit, and these permits are controlled by the federal government through a strict quota scheme which sees just 1,400 permits issued per year – and the majority of these are allocated to the main tourist areas. Many areas such as Geneva and Zurich will not allow foreign investors to buy second homes.

If you are a non-resident, it is possible for you to move your main residence to Switzerland. If you wish to go down this route, you will need to apply for residency and establish that a permit is not required for the property purchase at the same time.

The actual buying process varies slightly from canton to canton so it is advisable to seek professional advice when buying in Switzerland. However, the basic process is that you agree terms with the vendor and arrange your property finance first. Then, you need to book an appointment with the local notary public who will check that the property transaction is legal – they will check that the vendor really does own the property and is free to sell it, that you have the right to buy the property, and that you fully understand what you are buying. The money is then transferred to the notary who will release it when the change of ownership process has been completed – this involved the property being registered with the land registry and then with the canton.

Fees and taxes will again vary from canton to canton. A good rule of thumb is to budget 4-5% of the property purchase price for fees and taxes.

Mortgages
Switzerland is famed for it’s banking establishments so it makes sense to get a mortgage in the country. Switzerland has a stable currency and a very low interest rate – it is possible to take out a mortgage in the country for as little as 2.5% so it often makes sense to take out a mortgage there than to get one in your home country. The minimum amount they will lend is normally around $300,000 with a maximum loan value of around 70% of the property value. Terms of up to 35 years are common.

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