Famous for its magnificent mountains, beautiful lakes, and breathtaking landscapes, Switzerland is the location of many people’s dream houses. From young entrepreneurs to retirees looking to enjoy their free time in a beautiful Swiss village, owning a property in Switzerland is an ambition many have. However, being an expensive country with a lot of bureaucracies, Switzerland may often make it difficult for many to own a property.
Renting or Buying?
If you’re planning on moving to Switzerland, you may find it more difficult to rent or buy property than in other European countries due to various laws and regulations that the Swiss government imposes.
Renting a property in Switzerland is free of restrictions for foreigners and doesn’t even have to be covered by a written contract, although it’s highly advisable. As far as prices are concerned, the average price for a one-bedroom apartment varies around CHF 2,000 per month.
These facts make renting seem like a better option compared to buying property in Switzerland. However, finding a property to rent in Switzerland may take a lot of time; that’s why real estate agencies advise you to start your search three to six months before moving. Moreover, the time you will need to find a property to rent in Switzerland also depends on your income, job, length of stay, and the type of property you are looking for. Unfortunately, students with low budgets will often find themselves compromising the living standards that they are used to in order to remain within their budget limits.
Compared to renting, buying property in Switzerland is more complex and financially challenging. This process is subject to many types of restrictions, taxes, and standards, which is why most people leave it in the hands of real estate agencies.
Can a Foreigner Buy Property in Switzerland?
Unlike renting, buying property in Switzerland is illegal for foreigners without a residence permit, unless they’re looking to buy a property in tourist areas. These touristic areas are located in the cantons of Vaud, Valais, Bern, Obwalden, Uri, and Graubünden. In these cantons, foreigners can buy apartments and houses in ski resorts. This is regulated by the Koller Law (Lex Koller), which determines the type and location of a property that foreigners can buy.
What can a foreigner buy?
Foreigners can buy holiday homes, but they can only buy them in areas designated as a holiday resort by the respective canton. However, only a limited number of previously named cantons allow foreigners to buy holiday homes.
These holiday homes are also subject to several restrictions. For example, the home area has to be less than 200m², whereas, if they’re looking to buy real estate, it has to be less than 1000 m². For larger properties, foreigners need special permission, which they can obtain by proving a need. Furthermore, holiday homes can not be rented out annually but only periodically, and it is generally prohibited for one family to own more than one holiday home.
How Hard Is It to Buy Property in Switzerland?
Just like every other country, Switzerland has also been affected by the global housing crisis; however, the situation is much better compared to other industrialized countries. Even though house ownership in Switzerland is significantly low due to housing prices, the costs of buying property are among the lowest in Europe, with the buyer paying between 0.25% to 3.55% of the total property cost.
Swiss property buying process
The process of buying property in Switzerland is rather similar to other countries. First, you have to make an offer, which is usually done through an agent, especially if you are a foreign national. After this initiative is taken and a deal has been reached, the process of authorization begins. This process involves two phases: notarizations and signatures.
The contract for buying a property in Switzerland must be certified by a notary. In cantons that have official notaries, this process has to be done in the official notaries, while in cantons that have private notaries, it can be done at a notary of your own choosing.
The purchase contract needs to be signed by three parties: the seller, the purchaser, and the notary. Next, the notary informs the Land Registry Office about the change in ownership of that property. That’s it! You’re now the official owner of the property.
Taxes that need to be paid upon buying a property
Besides notary costs and fees, which are shared by the buyer and the seller, the buyer of a property in Switzerland must also pay the property transfer tax. This tax is imposed at a cantonal level, and it usually amounts to 1% to 3% of the property’s total purchase price.
Swiss property prices
As we mentioned before, Switzerland is known to be an expensive country, which is noticeable in the real estate sector. The median prices for houses and apartments in Switzerland are CHF 1,100,00, respectively CHF 711,00. If you need a helping hand, financing is widely available for housing, with Swiss banks offering housing loans with low-interest rates, usually below 4%.
How to Find a Property to Buy in Switzerland?
The easiest way to find a property to buy in Switzerland is using a real estate agency. These agencies provide you with professional help to narrow down your property search based on the features you want your property to have. Real estate agents are great to have, but they do charge for their service. If you do not want to pay, a free-of-charge option is available in the shape of online property portals.
Real estate agencies in Switzerland
There are many real estate agencies in Switzerland that offer excellent services for both foreign and Swiss nationals. These agencies charge commissions for their services, with the commission price being anything between 1% to 5% percent of the purchased property’s values. However, real estate is not a licensed profession in Switzerland, so make sure you look for integrity and professionalism when choosing a real estate agent.
Online property portals
These are websites where real estate agents or property owners themselves advertise their properties in the hope of receiving better offers. Most people go through an online search themselves first when looking to buy real estate, but this process can also be risky as people can fall prey to scammers and white-collar crime.
Buying property in Switzerland can be complex and tricky. However, taking the right steps and getting professional guidance can make this process easier and allow you to buy your dream property anywhere from the heavenly Swiss alps to the serene surroundings of Lake Geneva.