- Briefly about the main thing
- The intricacies of buying real estate
- Existing restrictions for foreigners
- Swiss residence permit for foreign investors
- 1. Agreement with the canton authorities on fixed taxation
- 2. Investments in cantonal projects or facilities requiring financing
- 3. Setting up your own business in Switzerland
- An important point
- Five tips for real estate buyers and applicants for a Swiss residence permit
Briefly about the main thing
Buying a property in Switzerland is a dream for many foreigners. High standard of living, picturesque nature, excellent education, developed infrastructure, reliable banking system, famous mountain resorts are just a few reasons why Switzerland traditionally attracts wealthy citizens from all over the world who want to own private property here or obtain resident status.
There are a total of 26 cantons in Switzerland: and each of them has its own rules for both buying real estate and becoming an applicant for a residence permit. In general, this will require a high level of well-being and reliability of capital, as well as good knowledge of the country and, preferably, connections in order to correctly determine the region of residence and enlist support in the process of obtaining a residence permit.
The main recommendation that should be used by anyone who is thinking about buying a home in Switzerland and / or obtaining a residence permit in this beautiful Alpine country: be sure to seek professional advice and further support of the process from a reliable real estate agency specializing in the sale of Swiss real estate and will help you clearly determine the direction for investment.
The intricacies of buying real estate
The Swiss authorities clearly limit the possibilities of buying residential real estate for foreigners, and its purchase is not a basis for obtaining a residence permit in the country. However, the purchase of housing may be part of an "investment package", on the basis of which a foreigner can apply for a Swiss residence permit.
So, if in tourist regions the purchase of their own housing for citizens of other countries is possible within the existing quotas, then in a number of key Swiss destinations it is impossible to buy housing without a residence permit. These include Zurich, Geneva, Bern, Basel, Lausanne. On the contrary, quotas exist in most ski resorts, as well as in Montreux, Lugano, and Yverdon-les-Bains.
According to the Swiss Federal Law on the acquisition of real estate by non-residents, the latest version of which is also known as the Lex Koller Law, the sale of real estate to foreigners is carried out on the basis of annual quotas issued for each tourist region. (It is worth noting that restrictions do not apply to commercial facilities.) The law also introduces restrictions on the number and area of the purchased object. Non-residents who have received a quota can transfer it when reselling their property, which simplifies the procedure for a new buyer.
Experts note that to date, existing quotas, as a rule, are sufficient to meet foreign demand for housing in tourist regions, and they are not even always used to the fullest extent. But in the event that the quota was not enough for a foreigner, then he will have to wait for next year to buy the desired object. Over the past five to six years, when the Swiss franc exchange rate against European currencies has been high, customer demand has decreased. However, today the franc exchange rate has shown a downward trend and, according to forecasts of real estate market experts, in a year and a half the interest of buyers will begin to grow again.
It is also worth noting the law adopted as a result of the initiative of Franz Weber in 2012, which restricts the construction of new "second" residences in those communes where their number has already exceeded 20% of the total housing stock. This has a direct impact on foreign buyers, as they purchase a second residence for themselves. In resort areas, 40-50% of real estate is used for recreation, and the authorities impose property limits as a way to limit the number of empty houses - the so-called "cold beds". Also, the existing restrictions are aimed at combating real estate speculation in popular regions.
Existing restrictions for foreigners
- Non-Swiss citizens have the right to own only one unit of property for a family consisting of a husband, wife and minor child. Upon reaching the age of majority, the children of the owner have the right to acquire property in his/her name, provided that he/she does not already own real estate in the country.
- A foreign buyer has the right to purchase either an apartment or a detached house with a living area of no more than 200 sq. m. (in some cases up to 250 sq. m.), not including garages and technical premises; the land area should not exceed 1000 sq. m. (in some cases 1500 sq. m.).
- The owner or his family have the right to live in their "second home" for no more than six months a year (90 days in half a year), according to the law on the stay of foreigners in Switzerland. This property cannot be rented out for a permanent period exceeding 11 months. This is prohibited by law.
- The property is not subject to resale for five years. The exceptions are unforeseen cases: death, illness, etc., but then the object must be resold without profit: only the purchase price, repair costs, agency fees, notarial and other documented expenses are taken into account.
- Holiday or temporary residence property in Switzerland can only be purchased for an individual.
- In some cases, if the property has been empty for a long time, it can be resold after two years by the decision of the commune.
Swiss residence permit for foreign investors
Wealthy foreigners have several investment options available, which may be the basis for obtaining a residence permit in Switzerland:
1. Agreement with the canton authorities on fixed taxation
This method of investment is the most popular among foreigners applying for a Swiss residence permit. In this case, the applicant for a residence permit pays a fixed tax on the expenses that he bears in Switzerland. This tax replaces all other taxes: a foreigner can earn any amount outside the country, but does not have the right to work in Switzerland. At the same time, the cantons determine their own amount of fixed, or "accord" tax, the amount of which the applicant must pay annually.
The estimated base of the fixed tax is the average amount required for the applicant and his family to live in a particular canton. Let's give an example of the minimum amounts of such a tax in the popular cantons of Switzerland. So, in general, if the applicant is an EU citizen, the amount of tax will be from HF 150 00-180 000 per year. For citizens of non-EU countries, including Russians, this amount will increase to the minimum figure of 420,000 SHF. In the canton of Geneva, the tax rate for representatives of non-EU states is HF 500,000-550,000, in Valais - HF 180,000, in Ticino - HF 150,000-180,000. Thus, a foreign applicant can choose a canton based on the amount of the annual tax, but he must take into account the fact that he will have to live in the territory of this canton.
As soon as a foreigner begins to earn money in Switzerland, the tax amounts are recalculated according to the amounts of his income.
2. Investments in cantonal projects or facilities requiring financing
Such projects exist in most cantons and provide foreigners with the opportunity to invest in enterprises that require additional financing. Their choice should be approached with special care, having secured the recommendation of professionals. The most common type of investment is investing in the construction or repair of ski lifts in ski resorts.
But the cantons certainly provide other financing opportunities, such as the construction of factories, the organization of production, etc. It is worth taking into account that any type of investment involves risk, and the result cannot be guaranteed. The average deposit amount starts from CHF 2 million.
3. Setting up your own business in Switzerland
Creating your own business in Switzerland should first of all make a real contribution to the development of the country's economy. The new enterprise should be really interesting for the canton. A prerequisite is to guarantee the creation of at least two to four jobs for citizens of the country. Such an initiativeIt may well be the development of an existing investor's business in Russia, but it must necessarily undergo the procedure of consideration and approval by the canton's Department of Economic Development, in which a complete dossier is being prepared for the applicant. Each case is considered individually: the business sector, the volume of investments, the number of new jobs and the required number of residence permits provided in case of business opening play an important role.
A new company can act as an employer for an applicant applying for a Swiss residence permit. In this case, the applicant signs an employment contract and is subject to "standard" Swiss taxation, with the need to declare all income that he receives worldwide, all real estate, etc.
An important point
Experts note that when deciding on the intention to obtain a Swiss residence permit, it is worth very clearly defining a number of "introductory parameters". So, the choice of the region belongs to them: it is worth bearing in mind that, after obtaining a residence permit in a certain canton, the purchase of real estate must subsequently also be carried out on its territory. As for the consideration of applicants for a residence permit, it is carried out exclusively on an individual basis by the authorities of the canton: therefore, it is very important to have a reliable partner company that will help you choose the right investment package, collect all the documents and submit the candidacy to officials.
Five tips for real estate buyers and applicants for a Swiss residence permit
1.Keep in mind that the purchase of commercial real estate for foreigners in Switzerland has no legal restrictions, and the average return on investment is 4.5-6.5% on the total cost of the object, and when bank co-financing is connected, 8-11% on their own funds.
2. Buy resort real estate in Switzerland exclusively for your own residence, without counting on its subsequent rental. According to Federal Law, foreigners do not have the right to long-term lease of their real estate: the lease period is limited to 11 months per year.
3. Choose your region carefully: plan your trip in advance to all the places of the country you are interested in, use the services of a professional guide to understand exactly where you really like. Remember that if you are an investor and receive a Swiss residence permit, then you will need to live in the territory of the same canton where you received a residence permit.
4. Be prepared for significantly higher real estate prices in comparison with the whole of Europe: prices for more or less decent residential properties in Swiss resorts start from CHF 1 million
5. Contact a reliable real estate agency with extensive experience in Switzerland. His specialists will not only carry out the selection of real estate, translation of documents, verification of the legal purity of the object, but also help to form the most profitable investment package for obtaining a residence permit.
photocredits: sharonoFF / dmitry kruglyak / flickr
The portal HomesOverseas.ru thanks Oleg Sharonov for his help in preparing the article (SharonoFF) and Gennady Gabrielyan (MySwissHome / My home is in Switzerland).