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From City Lights to Country Chateau: Buying Property in Switzerland
At a Glance:
- When it comes to buying property, EU or EFTA nationals living in Switzerland with a valid residence permit and C Permit holders have the same rights as Swiss citizens.
- It’s usually only worth investing in property if you plan on staying in Switzerland for more than six years.
- Swiss mortgages are split into two: one which covers the majority of the cost and has an indefinite repayment period, and a second mortgage with a fixed repayment period and higher interest rates.
- You’ll need to earn three times your monthly mortgage payment to be accepted as a buyer. Fees can also add between three and nine percent to the purchase price.
- Notaries handle all legal and financial aspects of a purchase, including holding your deposit until the sale is complete, and registering you as the new owner.
A Changing Market
Switzerland has been a renter’s market for many years. Only 30-40% of the population owns their own home, though ownership rates are higher in rural areas. In the past, that meant limited choice when looking to buy in Switzerland. However, low interest rates over the past few years have led to a boom in housing developments and created more choice for buyers.
As well as looking for the perfect place, keep an eye on the economy: some analysts believe that the combination of low interest rates, high borrowing, and stagnating wages have created a property bubble. They point to decreasing prices in French-speaking areas as a sign that the bubble may be about to burst.
Can I Buy Property in Switzerland?
For Swiss residents, restrictions or permit requirements depend on the type of visa you hold:
- EU or EFTA nationals living in Switzerland with a valid residence permit and C Permit holders have the same rights as Swiss citizens when it comes to buying property.
- B Permit holders can buy property, but only if they intend to use it as their main residence.
- G Permit holders (cross-border commuters) can buy a secondary residence near to their place of work without authorization.
You can find out more about the different visas and permits in our Visa & Administration section.
If you’re not a resident and are looking to buy property in Switzerland as an investment or holiday home, please be aware that there are many restrictions: non-resident purchases are restricted to tourist areas, and there’s an annual quota of permits. Some Cantons also impose re-sale conditions and restrictions on the property size.
You can find additional information on buying property in Switzerland, including sale statistics, on the Federal Office of Justice website.
Should I Invest in Property in Switzerland?
Though you may be eligible to buy property, it’s important to weigh up whether buying or renting is the right choice for you. The Swiss government provides a useful online calculator to help you figure out when buying makes more financial sense than renting, and what your budget should be based on your income. Our article on renting in Switzerland will help you weigh up the pros and cons of renting.
As a general rule, buying will only make more sense than renting if you plan on staying in Switzerland for more than six years. It’s also worth keeping in mind that both buying and selling property is a long process, so make sure to factor that in to your plans.
Getting Your Home Search Started
Flick through any Swiss newspaper and you’ll find plenty of property listings. At estate agents and in shopping malls you’ll also find dedicated, free property papers. Looking online is also a great way to get a feel for the Swiss property market. The main online portals to start with are:
As well as the restrictions for foreign buyers outlined above, be sure to check for any zoning regulations when apartment hunting outside the city center. Swiss zoning laws were tightened in 2013, and the changes particularly impact properties on agricultural land and limit who can purchase them.
Remember: Land is scarce so properties tend to be smaller in Switzerland. In cities, you’ll often find families of four living in an 100 m2 apartment as detached homes are usually only available in the suburbs. Even in houses, having more than four bedrooms is unusual.
Money, Money, Money: Mortgages and Other Fees
As in many other countries, there are many different financing options available for buying a home. Most people in Switzerland head to their bank rather than a mortgage lender. The different mortgage products available vary by provider, and according to whether the borrower wants a variable or fixed interest rate.
One quirk of the Swiss system is that mortgages are split into two: the first part covers the majority of the purchase price and has an indefinite repayment period, and the second mortgage (usually ca. 15% of the purchase price) has a fixed repayment period and higher interest rate.
Mortgage providers will usually require that your gross monthly income is more than three times the repayment. This calculation includes any additional service charges. Hausinfo (website in German) has a useful page that helps you calculate your maximum purchase price. Please note, your mortgage cannot be used to cover any of the purchasing fees (usually 5%).
The size of the mortgage you can get will be based not only on your income, but the value of the property you’re purchasing. Banks will usually lend up to 80% of the property’s value. The remaining 20% must be paid as a deposit. While you’ll have to find 10% in cash, it’s possible to fund the rest through your Swiss pension fund if you have one and certain conditions are met.
All property sales are handled by notaries, and there are a number of additional fees and charges to bear in mind when buying in Switzerland. These can add between three and nine percent to the purchase cost. The buyer is responsible for:
- notary’s fees (0.1–1%)
- registration fee, Land Registry Office (c.a. 0.25%, depends on property value)
- estate agent’s fee, 3–5% (+ 7.6% VAT)
There is also a property transfer tax of between 0.2 and 3.3% which is payable at the time of purchase, except for those buying in Zurich where this tax was abolished in 2005.
Taxation and Ongoing Costs
The governmental structure in Switzerland means you will pay taxes to the commune, canton, and federal government. Exact figures vary substantially between the different areas, so be sure to check before purchasing. You'll find detailed articles on topics such as income tax in our Social Security & Taxation section.
As well as varying levels of taxation, 19 of the cantons levy an additional land or real estate tax. Cantons with this tax use a variety of systems to calculate the exact charge. Find out if it applies to your prospective new home using the search function on the Swiss government’s website.
As renting is so common, all homeowners have to pay income tax. This is based on what the rental value of your property would be, even if you’re not renting it out. The good news, however, is that you can offset some maintenance costs and your mortgage interest rates against this tax.
When completing your tax return, you’ll need to declare any property or land you own as it’s also subject to wealth tax. If you’re one of the lucky few that own a second home in Switzerland, there are annual taxes — tourist tax, land tax, and wealth tax — that amount to around 1.3% of the purchase price. The previously mentioned income tax also applies.
Once you’re in your new home, there are likely to be ongoing maintenance costs for shared areas. Ask for details before purchasing, but as a general rule ongoing costs each year for an apartment come to around 1% of the sale price.
The tax burdens don’t stop when you come to sell your home: you’re also liable for property gains tax if you decide to move on.
Deposits, Notaries, and Patience: The Buying Process
With many stages and approval processes to go through, buying can take three or more months. After you’ve found your dream home, there are five main stages to complete the purchase:
- Contact your bank or mortgage provider and make an application; the amount they’re willing to lend will determine the offer you can make. You’ll also need to find a notary — the Swiss government website provides a search function.
- Communicate your offer. This can be done either directly to the seller or through an estate agent. The sale itself is handled by a notary, so making a direct offer will save paying agent’s fees.
- Once your offer has been accepted, a Promesse de Vente (agreement to buy) is drawn up by the notary, and you’ll need to pay a deposit — usually 10% of the purchase price. All funds are held by the notary while the sale progresses.
- The Commission Foncière now has to review the sale, and issue a permit giving you permission to buy. This can take two to three months, particularly if you’re applying near the end of the year when permits are running out. Once approved, you’ll need to notify your mortgage provider. They will then confirm to the notary that the funds are available.
- The notary then draws up a deed of sale. This will be read to you and the seller at the same time before signing. It will then be filled with your canton’s land register, and you will become the legal owner. The notary will transfer the funds to the seller.
Checking the Fine Print
In Switzerland, the seller has no legal responsibility to inform you about ongoing structural issues with a property, so it pays to do your homework. If your bank is your mortgage provider, they may help arrange a property survey as part of the valuation process.
For new properties, don’t be afraid to ask to see all building plans and cost estimates. It’s also a good idea to check local land records for any further developments that are planned, as well as any potential headaches like access paths or rights of way.
The Alternative: A Frontalier Lifestyle
Bordered by five different countries, many expats choose to make the most of a Swiss pay check by living in a neighboring country. Many major cities like Geneva and Basel are just a short commute from the border where you’ll find cheaper property and a lower cost of living in general.
As well as more affordable house prices, countries like France also have smaller deposit requirements making it easier for buyers. If you’re planning to join the many frontaliers, remember to factor the exchange rate in to any budget calculations, and check whether the Canton you work in has a tax agreement with your country of residence.
We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete.