A Guide to Buying Property in Switzerland

Switzerland, as a country, has a lot to offer when it comes to the purchase of a property. It so turns out that this is the ideal and primary location for anyone’s dreamy getaway, which gives all the more reason to one for buying property in this country. However, to anyone fresh to the concept of how property procurement works in Switzerland, the process can prove to be a little complex, as it houses a highly regulated property market. The following passage talks about a breakdown of this process to make it easier to grasp.

Switzerland is considered one of the hottest destinations for foreigners because of its infrastructure, health care services and tax friendly environment. Switzerland even covers the basics really well like offering health insurance comparison, comfortable mortgage options and more. 

Foreigners Buying Property in Switzerland

A brief and easy answer to the question, “Can foreigners buy property in Switzerland?” will be yes. However, that is not as easy as it gets. The Swiss Government has placed several restrictions on property buying by foreigners on national, regional, and local levels.

If the person is an EU National with a Swiss Residence Permit, residing in the country, or having a “Swiss C Permit,” then the rights to purchase property are the same as a Swiss citizen.

A person holding a “Swiss B Permit” can solely buy a property in which they plan on living. There is minimal scope if a person belongs to none of these categories. However, a license before the purchase is applied, the flexibility of which varies from canton to canton. It does help to have stayed in your preferred canton for five years or more.

Foreign companies get barred from acquiring property in Switzerland.

What Can You Buy?

Foreigners can only buy property in touristy areas instead of big cities. Foreigners can purchase ski resorts. The Lex Koller Law established a permit system that allowed only up to 250 m2 of living space. Additionally, a child or sibling over the age of 20 and an income stream allows purchasing larger property together. There are the occasional exceptions. However, this gives a good idea of the working of the rule.

While you contemplate the decision of buying property in Switzerland, it is extremely important to cover yourself as per Swizz health care policies. Hence, if you are in Switzerland and considering all good things about the country, ensure to go through health insurance comparison sites as well to be compliant and make wise contributions, if needed. 

The Process of Buying the Property

However, the process can continue for three months and remains the same in any location. Consulting an agent makes the process smoother.

Signing a Reservation Contract

As a gesture of goodwill, the usual process of signing a reservation contract wherein submission of a tiny deposit and the required documents are signed. The buyer also agrees not to show the property to other potential buyers while completing the process.

Mortgage Application

With the help of an agent, submission of an application for a mortgage to a Swiss Bank. Which usually offers money up to 70% of the price. It is best to work with local mortgage providers familiar with the area.

Notary Appointed

A Swiss notary oversees the process on behalf of both the seller and the purchaser. The notary is usually appointed by the agent agreeing on the sale. They will act on behalf of both the parties, thus, cutting out the need for a solicitor.

Application for a Foreign Purchase Permit

The first step will be the notary collecting all the required information; this will include the seller’s statement, the buyer’s information, and essential details regarding the sold property. 

All this is in preparation for a Foreigner Purchase Permit and the sale deed.

Afterward, the notary sends all this information to the Cantonal Authorities for processing and ratifying. This process takes up a duration of approximately two to four weeks. On the off chance that the request gets rejected, the reasons are usually that the person already owns a property in Switzerland or the purchased property doesn’t comply with the guidelines and imposed restrictions.

Signing the Deed of Sale

After the application is approved and the permit secured, there is a thirty-day window to sign the sale deed. You can do this on your own or in the presence of a notary. Being in contact with the bank, the notary can make sure.

Registration & Handover

Last but not least, the sale and purchase of property get documented in the Land Registrar; this is the final step in the process and usually takes a few weeks to complete. Most sellers will agree to hand over the property’s keys, making you in charge and responsible for the property.

Purchase Costs

The property itself, in Switzerland, tends to cost on the higher side. The total purchase of property in cantons mostly ranges from 2.5-3.8% of the property value; this includes the purchase tax, land registry fees, and notary fees. Mortgage registration fees vary from canton to canton.

What Taxes To Paid?

The central taxes to be paid include income tax, property tax, wealth tax, capital gains tax, and inheritance tax.

With the above-gathered information, we can conclude that the property buying procedure in Switzerland, while not entirely impossible, is complex and lengthy, each posing its own set of restrictions.

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