The process of buying property in Switzerland

Briefly about the main

High standard of living, low inflation, the best healthcare in the world, high level of education, magnificent nature and excellent climate all year round, luxurious ski resorts - the advantages of living in Switzerland can be enumerated for a long time. All this makes buying real estate in this alpine country so attractive. However, this independent state lives by its own rules, and the real estate market for foreigners also has its own specifics.

A non-resident of the country can purchase property, namely a "second home / residence" for recreation, only with a special permit - a quota. Their number is clearly limited by the Swiss authorities by cantons to maintain the stability of the real estate market, and for a number of key areas of the country they are not issued at all - these include Zurich, Geneva, Bern, Basel, Lausanne. The largest number of permits for the purchase of housing by foreigners are issued in the tourist regions and the Italian part of Switzerland, for example, in the cantons of Valais, Graubnden, Ticino, Vaud and Bern.

Also, according to a law adopted in 2012, the construction of new "second" residences in those communes where their number has already exceeded 20% of the total housing stock of the commune was limited. This has limited the construction of new facilities, reduced the number of proposals on the market and will affect their prices over time.

Features of purchasing real estate in Switzerland

In 2018, the legal regulations governing the ownership of real estate by non-residents remained the same!

Only an individual has the right to purchase one unit of family property as a "second residence" - either an apartment or a detached house with a living area of no more than 200 sq. M. m (in some cases up to 250 sq. m) and a land plot of no more than 1000 sq. m. m (in some cases, 1500 sq. m). Individual cases mean the presence of a large family or the need for servants to settle in - this additional confirmed information is provided to a notary. The property cannot be resold for five years.

It should be noted that none of the restrictions described above in the article apply to the purchase of commercial real estate. Taking into account favorable lending terms and refinancing rates, investments in this area are becoming more and more profitable.

Another important point for the future buyer is the fact that buying a home is not a basis for obtaining a residence permit in the country. The owner and his family are provided with an annual visa with the right to reside in the “second home” for no more than six months a year (90 days in a half year).

For non-residents with a residence permit, restrictions on the acquisition of property depend on the type of residence permit.

With regard to mortgage lending for 2018, the situation has changed as follows: instead of 80%, you can now take out a loan only 50-60% of the amount of real estate, but at a historically low rate of 1% per annum.

Stages of buying real estate in Switzerland

Buying a property in Switzerland is not a quick process and can take about 9 months. It is important to note that all transactions go through a notary, which guarantees their purity. Except when real estate is acquired by purchasing shares of the company. We will take a closer look at the main stages of buying real estate:

1. The first thing we recommend that you do is sign a contract with a reliable agent. This will provide not only a quick and optimal choice of an object, but also guarantees the competent execution of all steps of the purchase and sale transaction.
2. The second important step will be opening a current account in a Swiss bank. For the transaction, you will need to transfer money to the notary's account. At the moment, they are reluctant to accept funds from foreign banks and in 9 out of 10 cases they refuse. Opening an account will take about two to three months and from 500,000 CH.
3. After the selection and inspection of the object, a reservation agreement is created for it. You will need to transfer up to 5% of the property value as a confirmation of the transaction.

1. Next, the date of the deal is assigned. Access to it can take up to three months.
2. The transaction itself must be attended by a notary, an agent, a lawyer, a buyer and a seller. It is also necessary that on the date of signing the agreement, the entire amount of the transaction was already in the current account. Either own funds or bank financing.
3. After the conclusion of the transaction, the notary sends the documents to the land register and requests a quota. The notary makes sure in advance that there is a permit for the sale of real estate in a given region; all responsibility for obtaining a quota rests entirely with him.
4. After receiving the quota, and this takes on average 2-3 months, the notary fixes the transfer of ownership and notifies the seller and the buyer about it.

Transaction costs

• On average, the cost of transferring ownership is about 5.5% depending on the canton and the availability of credit and is distributed as follows:
• Notary costs - 1.5-2%. In case of availability of a loan, the notary undertakes the execution of the mortgage security paper and its registration in the land register as a guarantee for the bank to repay the loan.
• Various taxes on the transfer of property - 1.5-3%

Additionally paid:

• Agency or real estate agent services are on average 1.5% of the transaction.
• 100-150 francs per hour for translation services, this includes translation of papers, support. On average, a trade takes 20 hours. When contacting a professional agent, he can take over the duties of a translator.
• In some cantons (for example, Vaud), building and furniture insurance against fire is compulsory, which is 0.055% of the value of the insured property.

A few tips on how to complete a transaction for all property buyers in Switzerland.

1. Use the services of professional agents and, if necessary, involve tax specialists and lawyers. This will speed up the transaction process, eliminate possible risks and ensure its effectiveness.

2. Decide in advance on the region of purchase. A short tour of the country will help you make the right choice. Choose a “second home” to your liking.

3. Open a current account with a Swiss bank in advance. This will make it possible to instantly react to the object you like and initiate a deal.

4. Before purchasing a property, estimate the cost of maintaining it. On average, 1% of the cost of the object per year will go to pay taxes and 1.5% to operate. The maintenance of the apartment will be much more expensive compared to the house, all additional services are paid separately.

5. Buy resort real estate in Switzerland exclusively for your own residence. Its subsequent lease is limited by federal law. According to it, foreigners are not allowed to rent out real estate for no more than 11 months a year.

The HomesOverseas.ru portal would like to thank Oleg Sharonov ( SharonoFF SA ) for his help in preparing this article.

_{photocredits: dmitry kruglyak / flickr}