Switzerland is known for its beautiful landscapes, high standard of living, and stable economy. For these reasons and more, it is not surprising that many foreigners are interested in buying property in this country. However, buying property in Switzerland as a foreigner can be a complex process. In this article, we will provide a step-by-step guide on how foreigners can buy property in Switzerland.
Switzerland is an attractive destination for people all over the world, not only for its natural beauty but also for its strong economy, quality of life, and political stability. As a result, it is not uncommon for foreigners to consider buying property in Switzerland. However, as with any country, there are certain legal and practical considerations that must be taken into account when purchasing a real esate as a foreigner.
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In this guide, we will outline the steps that foreigners must follow to buy property in Switzerland, including the legal requirements and potential hurdles that may arise along the way.
Understanding Swiss Property Laws
Before buying property in Switzerland, it is important to understand the country\\\’s property laws. The Swiss Constitution provides for the right to own real estate, but there are restrictions on who can own what type of property.
Foreigners who are not residents of Switzerland are subject to specific restrictions on the type of property they can buy. Specifically, non-residents may only purchase properties that are designated as \\\”secondary residences\\\” or holiday home. These are properties that are not used as a primary residence and are located in tourist areas.
It is also worth noting that each canton (state) in Switzerland has its own specific rules and regulations regarding property ownership. Therefore, it is essential to research the specific canton in which you are interested in buying property to understand the local laws and regulations.
Restrictions on holiday homes
Foreign nationals seeking to purchase holiday homes in Switzerland face significant restrictions that are subject to national quotas. As it stands, the number of holiday homes that can be sold to foreign nationals is currently capped at 1,500 per year and divided among the various cantons. However, in some cantons such as Geneva and Zurich, the purchase of this type of real estate by foreign nationals is entirely prohibited. A list of the quotas allotted to each canton can be found in the annex to the Ordinance on the Acquisition of Real Estate by Non-Residents, which is available in German, French, and Italian.
If you reside outside Switzerland, you are only allowed to purchase a second home in a location with which you have a highly exceptional connection that is worthy of protection. Nevertheless, the cantons are not always consistent in their interpretation of this legal requirement, leading to possible complications.
In any case, there are a number of requirements that must be met, such as the property being situated in a tourist area, with a maximum living area of 200m2 and a limited ground area of 1000m2. The property cannot be rented out all year round, only temporarily if it is a holiday home and not at all if it is a second home. Furthermore, owning more than one holiday home or second home in Switzerland is prohibited. Like Swiss citizens, foreign nationals are not permitted to construct a second home in a commune where more than 20% of the properties are already classified as second homes.
In summary, foreign nationals must adhere to strict regulations when attempting to purchase holiday homes in Switzerland. The limitations and requirements involved make it a challenging and exclusive undertaking that demands a high degree of attention to detail.
Researching the Swiss Real Estate Market
Once you have a basic understanding of Swiss property laws, the next step is to research the Swiss property market. This can include looking at property prices, market trends, and the availability of properties in the area you are interested in.
There are many websites and resources available that can help you with your research, including online property listings, real estate agents, and property market reports. It is also worth considering engaging a local real estate agent, who can provide valuable insights into the local market and help you navigate the buying process. The most popular Swiss property websites are homegate.ch, comparis.ch, home.ch
Finding a Property
Once you have researched the Swiss property market, the next step is to find a property that meets your needs and budget. This can be done through online property listings, real estate agents, or by attending property auctions.
When looking for a property, it is important to consider factors such as location, size, and condition. It is also worth considering any additional costs associated with the property, such as maintenance fees or renovation costs.
Financing a Property Purchase
Financing a property purchase in Switzerland can be challenging, especially for foreigners who are not residents. Swiss banks typically require a down payment of at least 40% of the property\\\’s purchase price, and may also require proof of income and assets.
Foreigners may also be subject to higher interest rates and additional fees compared to Swiss residents. It is therefore important to research financing options thoroughly and consider engaging a local financial advisor or mortgage broker.
Making an Offer
Once you have found a property and secured financing, the next step is to make an offer. This involves submitting a written offer to the seller, which includes details such as the purchase price, any contingencies, and the expected closing date.
It is important to remember that negotiations are common in the Swiss property market, so the initial offer may not be accepted. It is also worth considering engaging a real estate agent or attorney to help with the negotiation process and ensure that your interests are protected.
Signing the Contract
Once an agreement has been reached, the next step is to sign a contract. This is typically done in the presence of a notary public, who will ensure that all parties understand the terms of the agreement and that it complies with Swiss law.
The contract should include details such as the purchase price, payment terms, and any contingencies, such as a mortgage or inspection. It is important to read the contract carefully and seek legal advice if necessary before signing.
Paying Taxes and Fees
As with any property purchase, there are taxes and fees associated with buying property in Switzerland. These can include stamp duty, notary fees, and property transfer tax.
Foreigners may also be subject to additional taxes and fees, such as a tax on the rental value of the property or a wealth tax. It is important to research and understand the specific taxes and fees associated with buying property in the canton where you are purchasing.
Buying property in Switzerland as a foreigner can be a complex process, but with the right research and preparation, it is possible to navigate the market and find the perfect property. Understanding Swiss property laws, researching the property market, securing financing, and engaging the right professionals can all help to ensure a smooth and successful purchase.