Swiss Property For Sale In Switzerland

This buying guide has been designed to give you a general overview to purchasing and owning your own property in the Swiss Alps.

It is meant to provide you with an insight into the steps you will take as well as answer some of the questions you may have. It is not meant to be the definitive guide to purchasing Swiss Property, but to assist you with some of the knowledge you will need.

The information provided on this page details some of the extensive knowledge we have accumulated during the purchase of our Swiss property as well as working with Notaries for clients purchasing Swiss chalets and ski apartments.

We hope it assists you with your decision to purchase one of the many ski chalets or ski apartments for sale we are marketing on behalf of the developers and constructors we work with.

Conditions of Property Purchases in Switzerland

The sale of property to those living outside of Switzerland is subject to various laws outlined in the following sections.

The federal law for the acquisition of property for sale in Switzerland by non residents which came into effect in 1985 is commonly known as the Lex Furgler-Koller-Friedrich law.

This law defines the annual quota’s of permits available for sales to foreigners in each of the tourist resorts and regions.

Permits

Switzerland currently restricts the sale of second homes to foreigners by imposing an annual quota of 1440 permits available to buy property. This figure is subsequently subdivided amongst the Cantons and further subdivided among the communes.

For example, Canton Valais that includes the very popular 4 Valleys resorts of Haute Nendaz, Verbier, Veysonnaz, Les Collons and La Tzoumaz, there are just 330 foreigner permits per year while Canton Vaud (Villars, Barboleuse, Gryon, Leysin, Les Diablerets) only 180.

Under the Law, it is only possible for foreigners to buy in certain Cantons and in certain tourist resorts. In some areas buyers are also restricted on what type of property and size they can purchase.

For this reason, we have recently seen a big increase in the number of clients applying for Swiss Residency to allow them to purchase in resorts that they are currently prohibited from buying in. Please refer to the Residency Section for more information on this process.

The Swiss Government are currently reviewing the system of foreigner permits as part of their further integration with the EU and it is currently believed that each Commune will eventually control their own development through their own imposed planning regulations which is already happening in some tourist resorts.

Looking at each Canton:

Swiss Residents holding Permits

If you live in Switzerland or have the relevant B, C or L Permit it is possible to buy properties in locations that foreigners cannot and we have a wide range of properties available to choose from.

Obtaining Residency to purchase a property

The most common Resident Permit that allows you to buy a property in Switzerland is the Residents B Permit. These are quite easy to obtain, allow you to reside in Switzerland for more than 6 months of the year (up to 6 months for a non resident) and therefore take advantage of the high standard of living, the healthy lifestyle, low crime rates and taxation advantages if you plan to live there for tax purposes.

Thanks to the closer ties between Switzerland and the EU, there is also a permit for working and residing in Switzerland that allows you to purchase property. For this you are required to meet one of the following criteria:

• Have a contract of employment with a Swiss company
• Set up your own company
• Self Employed

For the latter two criteria you are required usually to show you are creating an income of above 50’000 CHF per year or providing employment for Swiss nationals
Obtaining one of these permits also has the added advantage of removing restrictions on:

• the size of property you can buy (above 200m2 net habitable and plots greater than 1000m2),
• the number of properties you can own,
• where you can buy
• How quickly you can sell
• allowing you to buy as soon as your Permit is processed.

As Switzerland integrates itself further into the EU, it is now becoming easier for EU passport holders to live and work in Switzerland. For those over 50 who don’t need to work and have the financial means, this is an easy process and B Permit applications are processed within a couple of months.

It is also possible for younger people to obtain residency, with a range of different options to explore without necessarily any negative tax issues, though these applications tend to take longer.

For more detailed information on working and living in Switzerland both EU and Non EU citizens, please visit the Swiss Emigration website or pick up a copy of the paperback Living and Working in Switzerland by David Hampshire.

Property Size Restrictions

The Federal Government of Switzerland currently restrict the size of apartments and chalets that foreigners can buy to around 200m2 net habitable living space (garages, cellars, technical, laundry rooms, etc are in addition) and to plots of 1000m2 (some leeway is given for plots that are have a steep slope).

Purchase Costs

Purchase costs vary from Canton to Canton and between 2.5-5% of the total purchase price. This includes all taxes, notary and land registration fees. In Canton Valais this is approximately 2.5%, Canton Berne approximately 3% and Canton Vaud 5%. No notary fees are paid when you sell.

In Canton Vaud, when signing the Deed of Sale of an off plan property which has not yet begun construction, purchase fees are only paid on the land cost (total if a detached chalet or part of, if an apartment).

Mortgages & Fees

Interest rates have historically been lower in Switzerland than the UK. Having gone through this process ourselves we are happy to recommend the Bank we used, who will be able to arrange your mortgage for you.

Owing to our working relationship, mortgages with a LTV of up to 70% are available to clients, depending on your financial circumstances.

Loans of 100% are also possible using other securities such as cash put into the banks investment portfolio and this can be discussed with the Bank directly where applicable.

A Swiss Mortgage (both variable and fixed options available) is effectively an overdraft secured against the property with the borrower paying interest on the capital every 3-6 months (depending on bank). Capital repayments on loans can be taken for up to 50 years. You are however required by Swiss Banks to pay off a minimum of 20% of the mortgage within 25 years.

In Switzerland there is also a Mortgage Registration Fee you have to pay and this varies by Canton.

In Canton Valais (4 Valleys, Crans Montana, Champery) the fee is 1.6%, while in Canton Vaud it’s based on a sliding scale ranging from 0.6% for a loan of 100,000 to 0.44% for loans up to 500,000.

Legal Restrictions on Purchase

There are a number of additional legal restrictions that have to be considered when looking to buy property for sale in Switzerland.

• Only one property per family (husband and wife) may be purchased in Switzerland by non Swiss residents. Children over 20 who can prove their own financial independence may also purchase one property in their own name.
• An owner or his family may occupy their property for up to six months per year without requiring a residency permit.
• Your property cannot be rented on a full annual basis the maximum being 11 months and 1 week, as you, your family or friends are supposed to use the property for at least 3 weeks of the year.
• In some Cantons there are restrictions on re-selling your property until after a certain period. In Valais this is 5 years on purchases pre November 2007 and 10 years thereafter, while in Vaud the period is after 5 years.
• It is not possible for a Foreigner to purchase a property in the name of a Company.
  

Annual Running Costs

Varying from Canton to Canton, these include all taxes:

• Government
• Canton
• Commune
• National Defence
• Land
• Tourist (2.10 CHF per adult/night)

As well as service charges:

• Buildings / contents insurance,
• TV / Broadband
• Private utility usage (water, electricity, heating),
• Communal charges (heating, service, administration, renovation fund, gardening, snow clearing).

Communal charges in apartment buildings are calculated based upon the size of the apartment (PPE) as a proportion of the total cost. The local administrator (appointed yearly at the annual meeting) for the building will handle all of your communal payments, arrange snow clearing, grass cutting and maintenance as part of their service. These costs will be collected from the owners quarterly, 6 monthly or yearly.

For personal service charge invoice payments, your Swiss bank will be pleased to pay these bills for you.

Taxation of rental income obtained from a Swiss property owned by a non Swiss Resident, is not payable in Switzerland, unless you are a resident. You may however be liable to pay tax in your country of residence and should check this before making any purchase.

 

Payment Terms and Construction Guarantees

For new build off plan constructions you will be required to pay at key stages which vary slightly between apartments and chalets as well as developers. The basic rule of thumb applies:

Apartment

• 5% reservation deposit
• 5% signature of the contract at the Notary.
• 20% break ground
• 30% completion of the roof
• 30% kitchen installed or plastering begins
• 10% within 10 days prior to completion

Chalet

• 100% cost of plot within 30 days on signature of the Deed of Sale at the Notary.
• 30% chalet cost on breaking ground
• 30% chalet cost on completion of the roof.
• 30% chalet cost kitchen installed or plastering
• 10% chalet cost within 10 days prior to completion

For those buying a new build off plan construction, there are federal construction guarantees which protect you. These take the form of 5 years for construction defects and 10 years for any hidden defects.

For those buying a resale property there are no guarantees. As in France the property is sold as seen. For those re-sale properties clients purchase with us, we work with a local architect who is happy to give an examination of the building for a small fee should they wish.

Tax on Profit from Sale of your property

Property in Switzerland is subject to an appreciation tax where the taxable profit is the difference between sale price (after deduction of sales commission) and total purchase price (includes fees and any renovations and improvements made).

Capital Gains Tax is banded and decreases each year of ownership (30% year one down to 7% if owned for 24 years).

Rental of your property

If arranging a Proxy in the UK, you will need to go to your local Notary Public with the relevant documents (these will be sent to you) and sign in their presence as well as providing copies of passport(s). In the UK, the Foreign Office is legally required to counter stamp these documents, validating the Notary Public.

If creating a proxy in Switzerland this can either be the notary handling your purchase or as in most circumstances by our partner in Switzerland who you meet to view properties during your visit.

Inheritance

This is a relatively straightforward process. As each property is Freehold, unless the purchaser is a Swiss Resident, the property passes directly to his or her heir in accordance with English or other European Country Laws.

It is advised to have a will specific to your Swiss property registered with one of the local Swiss Notaries such as the Notary that handled your purchase and who is familiar with your circumstances.

Owing to the dual taxation treaty, while In Canton Valais there is 0% inheritance tax, you will be expected to pay the relevant UK or Country of residence amount.
In Canton Vaud the tax varies from 1.8% to 4.3% for property valued up to 500’000 and over 500’000 CHF respectively. Property valued over 1’000’000 CHF pay a tax currently just over 5%.

For property registered in multiple names, tax is paid on the share of the deceased only.

For more information on our properties for sale in the 4 Valleys (Les Collons, Veysonnaz, Haute Nendaz, La Tzoumaz & Verbier), Crans Montana, Anzere, Leukerbad, Ovronnaz, Champery, Morgins, Champey Lac, Chateau d’Oex, Leysin, Les Diablerets, Gryon, Villars, Barboleuse, Val d’Anniviers (Vercorin, St Luc, Grimentz, Zinal & Chandolin), Grindelwald, Wengen and Murren please visit our properties for sale.

[ Back to top ]

Back to main Advice page