Buying a Swiss property
5th August 2013, 1 comment
Owning your own home isn't the norm in Switzerland and over 60 percent of people rent their residence. Property ownership is higher in rural areas and lower in popular cities like Zurich, Basel and Geneva. Constant growth in urban populations over the last 50 years has increased pressure on limited housing stock. Rising house prices and the tight property market mean that desirable residences are both expensive and hard to find.
On the other hand, the rental market can be hyper-competitive with landlords receiving dozens of tenancy applications for each property, influencing many people to prefer to own their own home. However, as property prices are high in Switzerland, and selling a property can take a year or more, it's worth fully considering your options before launching into the process.
Should you rent or buy a house in Switzerland?
While renting is usually a great way to start out in a new country, the Swiss rental market has some quirks which you should be aware of before you decide either way. See Expatica's Guide to renting in Switzerland.
Are foreigners allowed to buy property in Switzerland?
Switzerland has strict regulations about the purchase of properties by foreigners, so you may find your options limited. You can buy property if:
- you are an EU or EFTA national with a Swiss residence permit who resides in Switzerland; or
- you hold a Swiss C Permit.
In both cases, you will have the same rights as a Swiss citizen to purchase property, so you can buy business premises, investment properties or a holiday home, in addition to a primary residence.
If you hold a Swiss B Permit, you may also purchase a property, but only to live in.
Those who fall outside these categories, such as non-resident foreigners wishing to purchase property, foreign residents without a Swiss work permit (including those working for diplomatic missions, UN agencies and CERN) or workers on short term or seasonal work permits, may not be allowed to purchase property or may have to apply for a license to purchase. Licensing criteria vary from canton to canton but will typically favour applicants purchasing a primary residence who have been settled in the canton for five years or more.
Life as a frontalier: Work in Switzerland, live elsewhere
Switzerland is a small country and many major cities, including Geneva and Basel, are close enough to Swiss borders that it is possible to live in a neighbouring country while working in Switzerland. Property prices are typically cheaper across the border, so if your work permit allows it, you may wish to consider becoming a 'frontalier', with a residence in France or Germany and a job in Switzerland.
How to find a property to buy in Switzerland
As in many other countries, most Swiss properties are now listed online. Property listings can also be found in all the main newspapers, as well as specialist property papers, which are usually distributed by estate agents and in shopping malls for free.
High competition for rental properties means that often they may have already been let by the time they are listed.
Properties for sale tend to move more slowly, but local knowledge remains an advantage and it is typically well worth registering with one or more local agents who may have access to properties before they are publicly advertised.
Zoning regulations in Switzerland are strict and have been tightened further in 2013. While existing properties on agricultural land (farm houses, for example) may be bought and used by people who are not agricultural workers, there may be strict limitations on new construction, extensions or even repairs to buildings not required for agricultural work.
Main online property portals
Find a real estate agency
- Swiss Real Estate Association (SVIT)
- SVIT Member directory
- Swiss Union of Real Estate Professionals (USPI) (in French only) Active only in the Swiss Romand area. Visit regional sites for list of local members.
Large real estate agencies
- Wincasa (in French, German and Italian only)
- SPG (in French only)
- Moser Vernet & CIE
- Naef (in French only)
Buying a house in Switzerland
After you've found your new home, you'll still have to make an offer, find a mortgage, agree on the sale and sign a contract. Expect this to take time. In Switzerland, it is common for the process to last three months or more. You should budget at least 5 percent of the sale price for fees and charges.
Choosing the property
In Switzerland, asking for a professional survey of the property is not common, and builders may take a request for a survey as a negative comment on the quality of their work. However, as the seller is not required to notify you of any issues, a survey may give you advance warning of serious problems, particularly with older properties, and can be well-worth doing.
Both detached houses and apartments are likely to come with annual service charges for the maintenance of shared areas, such as a car park, boat dock or private road. For apartments, estimate 1 percent of the sale price per year, if you have no other information.
In addition, local taxes vary enormously from commune to commune as well as canton to canton, so it's important to ask about the level of taxation.
Before making an offer, you will need to contact your mortgage provider and make an application. Mortgages are typically arranged directly with the lender, usually a major bank, rather than through an agent or mortgage broker.
The lender will assess the value of the property you are considering and decide whether to offer you a mortgage. A 20 percent deposit is typically the minimum required, including at least 10 percent in cash, and as prices for a detached family home can easily hit CHF 1 million (around EUR 800,000), particularly in popular areas like Geneva or Zurich, this can be prohibitive. UBS offers a mortgage calculator which may assist you in making the decision.
For more information on arranging a mortgage in Switzerland, read Expatica's Guide to Swiss mortgages.
Making an offer
The mortgage you can raise may determine the offer you can make. You will then need to communicate this offer to the seller, either through your estate agent or directly. Estate agents are typically working for and paid by the seller. As the sale itself will be handled by a notary, there is no particular advantage to the buyer in using an estate agent rather than buying direct from the owner.
If the offer is accepted, a deposit may be requested at this stage – if so, this will be held in escrow by a notary but you will still need a written agreement covering the circumstances in which the deposit will be forfeit or returned.
You will also need to inform your mortgage provider that your offer has been successful and complete any remaining paperwork with them. They will then inform the notary that the method of payment is arranged, and the sale can go ahead.
In Switzerland, a property transfer is handled by a notary, who is a public officer working for both buyer and seller. The buyer may suggest a notary or you may wish to select one yourself.
The notary will typically:
- Draw up the contract;
- Hold the buyer's funds in escrow;
- Complete the official transfer of the property;
- Register the change of ownership;
- Ensure that all legal formalities are completed;
- Be able to advise on the legitimacy and legality of a transaction.
Budget 5 percent of the sale price for the notary's fees. This will cover:
- The notary's own fees (0.2–1 percent);
- Property transfer tax (0–3.3 percent);
- Registering the deed with the land registry office (around 1–1.5 percent).
Depending on the canton, this fee may be split between buyer and seller but is more commonly the buyer's responsibility. These fees will typically be invoiced item by item, rather than as a single lump sum.
Sales contracts are usually drawn up by a public notary – in some cantons, this is required – and thus are fairly standard. However, if you are unfamiliar with the area or do not speak the local language, you may wish to have your own legal representation to explain the details of the agreement to you. As the mortgage will have been agreed prior to the sale contract, your mortgage provider may be willing to check the contract for you for free.
Selling a home in Switzerland
Unless you're buying a retirement home, you'll probably want to sell your property at some point. If you're on a short contract or at risk of being suddenly transferred out of the country, a Swiss house may be a liability.
"With most people looking to rent, there are very few buyers out in the market place. It could take a year or more to sell a property," says Priska Hutterli, Zurich branch manager of Network Relocation.
Capital gains tax will also apply to property sales. However, as the rental market is strong and house prices continue to rise, a Swiss home may be a valuable investment.
Find a property in Switzerland using Expatica's housing search.
Need advice? Post your question on Expatica's free Ask the Expert service to see if we can help
1 comment on this article Add a comment
18th September 2014, 12:58:27 salim posted:hi , i am lookig a comercial shop for my opticale retail on rent in zurich , kindly advice,
ASK THE HOUSING EXPERT
Do you have a question? Ask Expatica's team of experts or search through previous questions to find answers about living in your country from experience professionals and long-time expats.Latest experts Q&A's