Buying & Selling Swiss Property Guide
This general guide gives an overview of the process for buying and selling property in Switzerland. However, in the event you want to proceed with a buy or sell transaction, legal advice is required as there are set processes that need to be followed.
Can non-Swiss residents buy Swiss property?
One common myth is that you need to be a Swiss resident to buy Swiss property. This is not true but there are certain restrictions depending upon your intended use of the property, and the Canton in which you are buying.
Restrictions on foreigners buying Swiss property were put in place in 1961, and were aimed at preventing overseas investors from distorting the domestic housing market through speculative buying, thereby creating a "bubble". The restrictions vary from Canton to Canton but cover, for example, time limits before being able to sell, number of properties you can buy (1 is the max), maximum months it can be rented out and plot size. The specific regulations for a particular Canton will be explained by your estate agent and / or Notary.
The acquisition of holiday homes by non-residents is regulated by Swiss Federal Law which requires "persons abroad" to obtain a permit from the appropriate Canton and Federal authorities before buying real estate in Switzerland.
However, in granting a permit to buy, some of the Cantons restrict the number of properties available to non-residents. The maximum number of non-residents living or owning a property in a specific Canton is governed by the Swiss Government and is incredibly low. Each Canton has a proportion of the total country permits allocated to it each year, with most being allocated to the Cantons of the Bernese Oberland, Valais and Vaud, all of which are home to the majority of ski resorts.
If you are buying a Swiss property to live in as your main residence then you don't have to acquire a permit. However, an important condition is that you are not allowed to rent it out. To buy a property as your permanent residence, you will need to apply for Swiss residency at the same time - if accepted, you are granted Permit B residency status.
What is the buying process?
A local Swiss Public Notary acts for the purchaser and seller to complete the transaction and is required by law to protect both their interests. The notary acquires the appropriate permit from the Canton authorities (if buying a holiday home) and completes the contracts (all settled in Swiss Francs) that get signed by the seller and buyer.
Notary fees, land registry fees and Government purchase taxes vary from Canton to Canton but it's wise to budget for 3%-5% of the purchase price.
It is not possible to cover all aspects of the taxation implications of buying and selling Swiss property in this guide due to the personal circumstances of each individual and their own domestic tax regulations and rules. However, we provide a general overview as to some of the areas which should be considered. In all cases, we strongly recommend seeking the expert advice of a professional. The various taxes are paid either to the Swiss Government, Canton or local Commune.
Tax to be paid by the buyer
There are various taxes to be paid by the new owner on completion of the purchase and on an ongoing basis.
Government purchase tax
Payable by the purchaser on completion
Holiday home tax
In Switzerland, the owners of holiday homes pay an annual tax equivalent to between 1%-1.5% of the purchase price which covers land tax, tourist tax, wealth taxes and tax on rental income even if you do not rent out your holiday home - there is a deemed level of rental income
On-Going Costs & Management Agencies
Larger chalets and apartment blocks can sometimes be owned by many individuals. In these cases, it makes sense to appoint a syndic. The professional syndic de copropriété manages the property on behalf of the owners and covers property maintenance, insurance and other matters such as cleaning of the ‘common parts’ such the lifts, entrances and corridors, outside grounds and sometimes a swimming pool, in which each owner has a share of the costs based on the size of their individual property.