French Buyers' Info

Yes. Even apartments are ‘freehold’. You will have a share of the whole building and the communal parts and an exclusive right to use their own apartment.

 All the apartment owners are bound together in a kind of residents association (known as a “co-propriety”), which sets out the rules of the house (e.g. the laundry room to be used only between certain hours). The owners have complete control over the building and at the annual meeting they will appoint an Administrator who will deal with the day to day running of the property. The annual meeting will set the budget for the forthcoming year, vote on suggestions made by the administrator and apartment owners, and review any problems.

Similar arrangements are often made for a community of several chalets which will often share costs for snow clearance and gardening.

Yes, there are restrictions imposed at a national (federal) level, at the regional level (by the cantons) and even at a local level (by each commune). These restrictions limit where foreigners may buy, what type of property they may buy and even the size of the property is restricted.
 
It is worth noting that, foreigners living outside Switzerland (who do not have a Swiss Residence permit) may only buy a residential property which is in a tourist area. They are not permitted to buy in the cities such as of Geneva, Basel and  Zurich as these areas are for primary residences; not for holiday homes. Foreigners are permitted to buy chalets and apartments which are classed as second homes (holiday homes) in most Swiss ski resorts as these are in tourist areas.
 
Some of the restrictions on foreign ownership of second homes are set by the Swiss Confederation and apply universally across all the 26 Cantons, and others are set by each Canton itself.

Details of the federal (national), cantonal (regional) and communal (local) restrictions on property purchase by foreigners are provided in the next two FAQs. 

Restrictions on the purchase of property in Switzerland were introduced in the 1960s and are now governed by two key laws; the Lex Koller and Lex Weber.
 
Lex Koller
 
The Lex Koller established a permit system so only certain residential properties would be eligible to be owned by a foreign buyer.
 
The Federal government issues only 1,500 permits annually for the whole of Switzerland and allocates these to the cantons. Tourist cantons such as Valais receive the most permits so it is easiest for foreigners to buy in those.

The Lex Koller restricts the total plot size that may be sold to foreigners to 1,000m2 and the habitable area of the chalet to 200m2 net (in practice this can be increased to 250m2 ).
 
A foreigner must apply for a permit to the Cantonal authority where the property is situated before commencing the purchase procedure. The Swiss notary will apply for the permit and this usually takes between 4 and 6 weeks.
 
Lex Weber
 
In 2012 the Swiss decided in a referendum that no new building permits should be given for the construction of second homes in communes where second homes already make up 20% or more of the total residential property stock. 

The impact of this initiative has been total with no new building permits being granted for second homes as all the tourist resorts already had many holiday homes and few permanent residents. This is a federal law applying to the whole of Switzerland and to Swiss residents as well as to foreigners.
 
There are still some new build developments (where building permits were secured before the rule change) which have second home status and which may be bought by foreigners. Most are for the construction of individual chalets to be built to order and these are mainly in Canton Valais in resorts such as Les Collons in the 4 Vallées, Grimentz and Saas Fee.

There are also a few new developments of apartments with old permits which are still valid. However, there is a time limit on all these permits so these won’t be around for long.

When these last properties are sold there will not be any more second home status properties but it will still be possible to buy a new build ski property in developments that provide a range of hotel style services and facilities. It must also be professionally rented when you are not using it.

Each of the 26 Cantons (member states of the Swiss Confederation) has its own constitution, legislature, government and courts, so it should come as no surprise that each canton has different rules on the purchase of property for foreigners. These even vary from one commune to another within the same canton.
 
Listed below are the all the major Swiss ski resorts where foreigners may buy in Switzerland and the restrictions which apply.
 

Buying a Ski Property in Canton Berne

Foreigners are permitted to buy property in Canton Berne in the famous resort of Gstaad, and in the popular traditional ski resorts such as Wengen and Grindelwald in the picturesque Jungfrau Region.

Foreigners may resell at any time (although they will pay a higher capital gains tax rate if they sell within 5 year).

Occasionally properties for foreigners come on the market in the less known resorts such as Adelboden, and Meiringen and even on the lake in Interlaken, Brienz and Unterseen. There is a Cantonal rule that only 50% of apartments in any building may be sold to foreigners but that still leaves plenty of choice in most resorts. The communes apply other restrictions.

Grindelwald allows foreigners to purchase chalets or apartments but only over a threshold value of 750.000 Sfrs (so that cheaper properties are available only for locals).

Wengen and Lauterbrunnen do not have a minimum purchase price but foreigners may only buy apartments, they are not permitted to buy detached chalets. The turnover of property in Wengen is always very high and this is one of our best sellers.

Mürren is open for foreigners but you simply will not get your hands on a chalet or apartment here as most are passed down through the generations. When they do come up on the open market (which is rarely) they are snapped up by locals. We have been selling ski properties in the Jungfrau region for 30 years and have never listed a property in Mürren!

Gstaad has many foreign owners and some chose to make it their primary residence and tax base and to semi-retire here.

Interlaken and other communes around the lake have given permission for some plots in specific locations to be developed  and sold to foreigners.
 

Buying a Ski Property in Canton Graubünden

Home to the glitzy resorts of Davos, Klosters and St. Moritz, Canton Graubünden is one of the trickier Cantons in which to purchase a ski property.

Klosters and St. Moritz are off limits to foreign buyers. There are occasional exceptions but they are very rare and may, as result, be even more pricey.

Davos does allow foreigners to buy and there is less of a price hike for foreigners versus locals.

Lenzerheide and Arosa have more properties for foreigners and in a variety of price ranges and fewer restrictions.

Laax and Flims are also fairly easy from a regulations point of view, and we still have a new development, the Hohegarten apartments which is available to foreigners.
 

 

Buying a Ski Property in Canton Obwalden

Engelberg is the only major ski resort in Obwalden and although foreigners are permitted to buy there are few properties on the market.
 

Buying a Ski Property in Canton Uri

Andermatt has a special exemption from the permit system for foreign buyers due to the major redevelopment occurring within the resort.
There are lots of options here for foreigners to buy new apartments but prices are high as these developments are also funding the development of the local infrastructure.

 

Buying a Ski Property in Canton Valais

Valais is home to most of the well-established Swiss ski resorts, especially those visited by foreign buyers and takes up to 330 of the annual quota of permits for foreign buyers.

Among the best known resorts in Valais are Zermatt, Verbier, Nendaz, Crans Montana, Grimentz, and Saas Fee and foreigners can buy freely in all of them except in Zermatt.

Zermatt is entirely off limits to foreign buyers with the exception of the 7 Heavens which is classed as a business and is fully-staffed all year-round.  Swiss nationals and foreigners who are resident in Switzerland (having a B or C residence permit) may buy in Zermatt but some properties are reserved only for “locals” who are residing in Zermatt and paying their taxes in Zermatt.

Saas Fee is more open to foreigners and is a good alternative as it is also a high-altitude attractive village with glacier skiing. Prices are about a third of what you would pay in Zermatt.

Verbier and the 4 Vallees Resorts – La Tzoumaz, Nendaz, Les Collons and Veysonnaz – are fairly open to foreign buyers with permits available to foreigners for both new and resale apartments and chalets.

Grimentz, St. Luc and Zinal in the Val d’Anniviers have permits for foreigners but most opportunities are in Grimentz..

Champery and Les Crosets are Swiss resorts in the Portes du Soleil ski area which straddles both France and Switzerland and foreigners may buy.

Leukerbad has a unique offering of thermal spa waters and skiing and is open to foreigners.

Crans-Montana is another popular choice for foreigners as a holiday destination, the golf courses adding another dimension to this traditional Swiss ski resort.

A Cantonal rule applying to all the resorts in Valais prohibits foreigners from selling their property within 5 years of buying but there are exemptions. If you can prove ill-health or financial problems the Cantonal Authorities will allow you to resell your property within 5 years provided that you do not make a profit.
 

Buying a Ski Property in Canton Vaud

Canton Vaud has relatively few restrictions on property purchase for foreigners and there is a varied range of properties available.

Villars is the best known of the resorts and many foreigners have bought there as it is just 90 minutes from Geneva and is a pleasant all year round resort.
 
Chateau d’Oex and Rougemont are close to Gstaad but it is easier and cheaper to buy in these resorts than in their more famous neighbour.
 
The Canton of Vaud has the same 5 year rule so you may not resell within 5 years without a good reason. 

Yes, but not many – and  then only properties with a rental obligation. 

In 2012 in a referendum the Swiss decided that no new building permits should be given for the construction of second homes in resorts where second homes already make up 20% of total property.

There are still some valid permits for new builds which were given before the new law and these are already on the market. When those are sold there will be no more new second homes permits given to any of the Swiss ski resorts.

It will be possible, however, for foreigners to buy apartments or chalets in developments which offer hotel style services and facilities provided also that it is professionally managed and rented when the owner is not using it.

So properties which have a spa and wellness area, a reception and concierge services, a restaurant or breakfast room, laundry service, or room service could be classified as “tourist” residences and could be bought by foreigners.

New developments of this type are already beginning to appear on the market, in the Valais in particular, and are selling well. 

Many buyers appreciate these facilities and services (particularly cleaning, linen and laundry services) as this allows them to enjoy their family holiday to the full or gives them more time and better facilities to entertain friends. An increasing proportion of buyers like to rent their property when they are not using it so are attracted by a professional rental arrangement like this which is trouble-free. 
 
Developments which will be permitted in future under the new rules will be a new direction for ski properties in Switzerland rather than the end.
 
 

No. Foreigners may only buy one property in Switzerland.

You are not permitted to buy a second property in the name of your husband/wife but if you have children over the age of 20 they may purchase properties in their own name.

If you already own a property as a foreigner then you may inherit a property.

Yes, in some Cantons such as Valais and Vaud foreigners may be prohibited from re-selling their property within 5 years after they have purchased it. This restriction will be waived if you have a good reason to sell (ill health, financial problems) and you do not make a profit.

Some cantons such as Berne and Obwalden allow you to re-sell the property immediately (you may pay a higher capital gains tax in the first 5 years).

Notary fees

Switzerland is one of the cheapest countries in Europe to buy or sell a property. The total purchase fees (which include the notary’s fee, land registry fees and taxes) are between 2.5% and 5% of the purchase price and vary from Canton to Canton (see below).

All the purchase costs are payable by the purchaser. The vendor does not pay. When you come to sell your property you do not pay notary fees.

Mortgage registration

This is charged on a sliding scale which varies in different cantons. In Canton Valais it is usually a sliding scale starting at 1% until 200k CHF, 0.8% until 500k and approximately 0.7% over 1m CHF. In Canton Vaud it is calculated on a sliding scale starting at 0.6% of the amount borrowed but decreasing to 0.44%. When buying a resale property you may take over the existing mortgage deed and avoid the charge for registration. You could borrow from the same bank as the vendor or they could pay the loan off and you can use the mortgage deed to borrow from another bank.

Canton Bern (Lauterbrunnen, Wengen and Grindelwald)

• Total purchase costs are 3% of the purchase price.

Canton Graubünden

• Total purchase costs are 2.5% of the purchase price.

Canton Valais (Saas Fee, Verbier etc.)

• Total purchase costs are 3.8% of the purchase price

Canton Vaud (Gstaad and Villars)

• Total purchase costs are 5% of the purchase price

• New properties: 5 years for visible construction defects, 10 years for hidden defects.
• Resale properties: there are no guarantees.

An official Swiss notary of the district will act on behalf of both the purchaser and the vendor. You will pay the deposit and all payments to the notary’s account.

Almost never. This is a formality and the permit is usually given in a few weeks. It would only be refused if you already own another property in Switzerland or the property does not comply with the rules.

When buying a new property off plan you will sign a reservation agreement and pay a small deposit. Whatever you are buying you start by completing a civil status questionnaire giving your personal details to the notary who will then apply for a permit for you to buy the property.

Within 30 days of being allocated a permit you must sign the notary’s deed of sale and pay a deposit.

The notary will send you the deed of sale in French or German. Most of the notaries we work with will provide an English translation free of charge.

The notary will also prepare a power of attorney which authorises someone in the notary's office to sign on your behalf so there is no need to travel to Switzerland to sign the sales deed in person.

The notary will also liaise with the bank for the registration of your mortgage. 

Usually, the vendor will receive the sales proceeds to their nominated bank account 2 to 3 weeks after the contract is signed.

You will put your money in first and then the bank will make the remaining stage payments as the construction proceeds. Each developer has a different payment structure but typically it would be a deposit of around 30,000 sfrs to reserve a property off plan, 10% when the notary’s deed of sale is signed and then stage payments when the foundations and roof are started. Final payment when the keys are handed over. If you take bank finance then you pay the first 30% and then the bank pays the remaining stage payments.

Swiss banks will lend up to 70% of the purchase price. The loan is usually in the form of a current account overdraft secured on the property repayable over 25 years. We can introduce you to a bank which has all the documentation in English and is used to dealing with International clients.

If you are a United States citizen it is very difficult to borrow from a Swiss bank so unless you can buy without a mortgage you should consider buying in a French resort as French banks will still lend.

Swiss banks do not usually charge a setup fee or require any life insurance. The costs for registering the mortgage varies from one canton to another but will be a maximum of 1.6% of the amount borrowed.

Interest is payable every quarter on the capital balance outstanding over that period. The repayments will therefore be higher in the earlier years but will reduce as the capital is repaid. Swiss interest rates are the cheapest in Europe – they are currently less than 1.5% variable rate or fixed at 2% for long term. 

The property must be paid for in Swiss Francs.

The best way to transfer money from other currencies into Swiss Francs would be to use a dedicated foreign exchange broker. The benefit of working with a specialist foreign exchange partner is that they offer better rates than the main banks and, as they are specialists, they can advise you on buying currency forward. 

To help make your money go further when buying a property, we work with HiFX who, as well as offering consistent bank beating exchange rates, provide you access to your own dedicated currency specialist who'll get to know you and your requirements. 

No, a foreigner must buy in their own name.

Across the French, Swiss and Austrian Alps, rental yields tend to vary between 3 and 5% depending on a variety of factors such as the resort, the location of the property within resort (ski in, ski out properties demand a premium), the property itself and the facilities. 

A common misconception is that if you buy a property in a dual season resort you will generate a greater rental income. While your property will certainly benefit from rental throughout the year rather than just over the winter months, properties in dual season resorts tend to generate a similar rental income to properties in resorts where winter is the main focus. The two main reasons for this are that rental rates are significantly lower in the summer season and many dual season resorts are at a lower altitude meaning they have a shorter winter season.

Local agents can handle the administration, rental and management of your property if you wish to rent. Rental agencies charge around 20% for making bookings so some owners use international rental agents and portals such as Chalets Direct and others even make their own web sites.

Renting your property out when you are not using it will easily provide sufficient income to cover the annual running costs, particularly if you rent out some of the peak weeks (Christmas, New Year, all February, and Easter). In every resort there are companies which will clean and service your property in between rentals.

If you do rent and you chose to complete a Swiss tax form (instead of being assessed on the notional fiscal value) then you will be taxed on the actual rental income received after deducting some expenses and interest on your mortgage. Tax rates vary but you will probably pay around 20% tax.

You may be liable to pay tax in the country in which you are resident but most countries have a dual taxation agreement with Switzerland so you do not pay your tax twice.

The annual running costs are not expensive in Switzerland.

The service charges for an apartment building are divided up proportionately between the owners, according to the size of their apartment. These expenses include, the caretaker, maintenance of the building and grounds (snow clearing and gardening), electricity and heating for the common parts. In addition are structural insurance (very cheap in Switzerland) and an allocation to the building’s renovation fund.

The service charge is usually payable annually. Apartments with swimming pools and facilities tend to be more expensive and also the charges vary from canton to canton. Typically they are around 0.5% of the value of the property per year in Valais up to around 0.75% in Vaud. As an example, you would expect to pay around 5,000 sfrs a year service charge for a 3 bedroom apartment.

Additional costs are your own consumption of electricity and water which are cheap in Switzerland as they have hydro-power. Contents insurance is also cheap in Switzerland (there is hardly any crime)!

Chalets are cheap to maintain (particularly if new) as very little maintenance is required.

Currently we do not have any properties that guarantee rental income in Switzerland.

However, with the introduction of the Weber Law we are seeing a new model of property development in Switzerland. New-build properties will increasingly have rental obligations over the coming years and will need to be sold with fully managed rental. So there may well be new developments where rental income is guaranteed in Switzerland soon.

You are free to rent your property (or not) as you wish. The owner, or his friends, or family, are expected to use the property for at least three weeks of the year so the property may not be rented on an annual basis (maximum 11 months and one week). Some larger developments may have a rental scheme.

As the supply of new second home properties has always been strictly controlled and now the new rules will prohibit all future construction of second homes, Swiss property is a very safe investment. Prices do not increase dramatically but also in troubled times, they do not crash either.

The principal source of profit for foreign investors has been the Swiss Franc, which is one of the strongest currencies in the world. Swiss real estate has historically appreciated on a very steady basis and property in the best ski resorts always appreciates. 

In the case of resale, the property is subject to an appreciation tax on the difference between the sales price and the total purchase price (including fees and special renovations or improvements to the property). Deductions can be made for commission to the real estate agents and other costs. The rate of the capital gains tax decreases with each year of ownership, starting at 30% (if you sell within a year) and decreasing to 9% after 10 years and 1% after 25 years.

You may be liable to pay tax in your country of domicile but Switzerland has a dual taxation treaty with most countries so you will get a credit for any tax paid in Switzerland so you do not pay tax twice. 

To manage how your property is devloved, we advise that you either execute a codecil to your existing will and send this to your Swiss notary or request a new separate will be prepared by a Swiss notary.

Inheritance tax is payable in Switzerland but is much lower than in the UK and most European countries. Inheritance tax is a cantonal tax and varies from one canton to another. In most cantons there is no tax between spouses and in Canton Valais (Verbier) there is zero inheritance tax if the property is willed to direct line descendants.

In Canton Vaud (Villars) the tax is progressive - starting at 1.8% for property valued at up to 500,000 Sfrs, rising to 5.068% if the fiscal value of the property is over 1m Sfrs. If the property is registered in the name of more than one person, then tax would be payable only on the share of the property owned by the deceased.

However, as is always the case (in whatever country you may own property) where there is a dual taxation treaty, you would be liable to pay tax in the country in which you reside and be given credit for any tax paid to the foreign (Swiss) government.

Foreigners owning a property in Switzerland pay taxes to three bodies - the Federal Government, the Canton, and the Commune. The Canton and local commune taxes vary. Owners have a choice of completing a tax declaration disclosing their worldwide assets or being assessed simply on the fiscal value of their Swiss property. Most owners elect to be assessed.

The tax is calculated on notional rental value of the income which could be derived from the property. That is based on the fiscal or “tax value” of the property (about 60% of the market value). Using this calculation, the total annual taxes are around 0.5% of the market value of the property in Valais but in Vaud taxes are slightly higher at around 0.8%.  Canton Valais does not re-assess the fiscal value of properties so you will probably pay the same tax in 10 years’ time as you do today but Canton Vaud revalue properties about every 5 years.

As an example, you would expect to pay total taxes of around 5,000 sfrs a year for a 3 bedroom apartment in Valais and you will pay almost the same annual tax if you decide to rent your apartment or if you prefer to keep it exclusively for your own use.

EU citizens may occupy their property for up to six months per year. If you wish to spend more time in Switzerland you would need to apply for a residence permit.

It is much easier for EU passport holders to work and/or reside in Switzerland than other nationals. There are two types of permit - a B permit which gives you the right to reside in Switzerland (but not to work) or a permit which gives both the right to work and residency. When you have obtained a Swiss residence permit you may buy a property which would otherwise not be available to purchase by a foreigner. A useful book if you are considering retiring or working in Switzerland is ‘Living and working in Switzerland’ by David Hampshire (available from Amazon).
 
Working in Switzerland - you will need a contract of employment from a Swiss company or you could establish your own company or be self-employed but you will need to show that you are creating employment for Swiss nationals have an annual income of over 50,000 Sfrs.

Retiring in Switzerland - you can obtain a B permit if you are over the age of 50 and you can show that you have sufficient financial means and have a private Swiss health insurance cover (it costs around 120 sfrs per month). You must also pay tax in Switzerland. This is known as a “taxe a forfait” and is a fixed 5 year tax deal which your advisor will negotiate in advance with the local tax office. Resorts such as Crans Montana in Valais offer very good tax arrangements and this is a lovely, sunny dual season resort with a golf course so it is also a good choice for retirement.

EC residence permits are valid for five years and will automatically be renewed if the requirements are still satisfied.

NON EU Passport holders – applications are reviewed case by case but generally the requirements, if retiring, are to have reached retirement age (60 years old), not to work in Switzerland, to prove one has sufficient financial means to live in Switzerland without working and to have personal ties in Switzerland.

Unfortunately there is no law in Switzerland that prescribes how to calculate the living area. As a result there are cantonal differences in how the floor areas of properties are calculated.

In the Canton Vaud - generally speaking - the key figure is the net floor area (net living area plus interior walls and outdoor areas).

In the Canton Valais the gross floor area is applied as the benchmark. ​Usually this involves taking the square meters of all rooms and the surface of all walls (carriers, non-loaders and facades). 

Second Home
If you prefer not to rent your property, we are able to offer a small selection of properties that have a rare “second home” permission, which means you have no obligation to rent.

Fully Managed
Some properties offer a fully managed rental service where the developer teams-up with a large tour operator who will efficiently handle all your rentals when you are not using your property and then pay you a quarterly or monthly income as well as handle all your bookkeeping. As an owner you simply book your forthcoming winter and summer dates in advance and the tour operator will do the rest… With fully managed properties sometimes the tour operator will offer a guaranteed rental return for a fixed period of time. 

Flexible Renting 
If you want to maximise the personal use of your property and are looking for complete flexibility, then a property with a flexible rental option is perfect. In this way you can either rent your property through a local tour operator, or rent privately. If you chose a tour operator, they will advertise your property, manage your online bookings, meet and greet your guests, and deal with the laundering and cleaning of your property when your guests have departed. If you chose to rent privately, you can make your own web site to advertise your property, or advertise on a holiday rental portal, of you can rent privately to friends and family.

Yes, EU citizens can buy a holiday property in any of Austria’s nine Provinces and the process is very straightforward.

If you are a non-EU Citizen then there are restrictions on what you can buy. It is possible to buy a property with a ‘second home’ status, and although these properties are extremely rare to find, we have a selection on our web site to choose from.

It is not possible for non-EU citizens to buy in The Tyrol, Vorarlberg, or Salzburg Provinces. It is possible to buy in the Carinthia province however. To do this you would need to apply for a foreigner purchase permit, which usually takes a couple of months.

Alternatively, it is possible to buy in the name of an EU Company.

1. The process of buying a property in Austria is very straightforward. The notary will act on behalf of both the purchaser and the vendor, he will draw up the deed of sale and all the documents required to transfer the legal ownership.
2. When buying a property, both the purchaser and the vendor are required to attend the notary’s office to sign the deed of sale in his presence. Alternatively both parties can sign a power of attorney authorising one of the secretaries working in the notary’s office to sign the sales deed on their behalf. In this case the buyer will receive from the notary a copy of the deed of sale in German and a professional English translation along with a power of attorney (also in English) which authorises the notary’s secretary to sign on their behalf.
3. The buyer will need to take the power of attorney to either a Notary Public (not a solicitor) in their country of residence to have their signature witnessed and (in the UK) the Notary Public will send the document off to the foreign office to have it ‘legalised’. Alternatively, documents can be signed and legalised at the same time if taken to the Austrian Embassy.

Purchase costs for buying a property in Austria work out about 6.6% of the gross purchase price. The purchaser will be required to pay the notary fees after the contract of sale has been signed.

Fees are calculated as follows:

• Purchase Tax ‘Stamp Duty’ – 3.5% of the gross price
• Registration in the Land Registry – 1.1% of gross price
• Notary’s fees – between 1.5 and 2% of gross price
• Court costs, administration fees – approx. 150 euros

All new build Austrian property are covered by a 30 year building guarantee against all building defects, and developers will usually guarantee building fixtures for two years.

New build properties are paid for in stages and all payments are made through the notary who acts as trustee for your money. The instalments are made into a client account and the payments for each stage are only released from the client account when an independent surveyor has inspected each stage and officially signed it off with the notary.
 
Purchase payments will typically be something like this:

• 15% at start of building works
• 35% on completion of the shell and roof
• 20% on completion of plumbing and electrical installations
• 12% on completion of the façade & windows
• 12% on completion of the property
• 4% on hand over of keys
• 2% after three years (or after developer providing a bank guarantee or insurance to the purchaser)

Construction in the Alps only takes place in the summer months, as during the winter months the ground is frozen and covered in snow. Because of this, Alpine developers optimise their build schedule and usually build and complete an apartment building or several chalets in one summer season.

The advantage to buyers is that during the winter they can sign their purchase contract to secure their property but will not have to start making stage payments until construction starts in the spring.

If you intend to rent your property then there are tax advantages if you take a mortgage as you may offset the interest against rental income (which will no longer be permitted for UK property from April 2017). As your rental income will be in Euros you do not have any currency exposure if you intend paying your mortgage from rental income.

Austrian banks will fund up to 60% of the purchase price and usually the loan period will be between 15 and 25 years.  It is also possible to take fixed rate mortgages for 1 or 5 years.

Some banks charge a set-up fee and this is usually around 2% of the value of the loan. They will also charge an appraisal fee of 0.5% and you will need to pay the notary a fee of 1.5% of the amount of the mortgage to register the mortgage in the land registry.
Variable rates are around 3%.

The property must be paid for in Euros.

The best way to transfer money from other currencies into Euros would be to use a dedicated foreign exchange broker. The benefit of working with a specialist foreign exchange partner is that they offer better rates than the main banks and, as they are specialists, they can advise you on buying currency forward. 

To help make your money go further when buying a property, we work with HiFX who, as well as offering consistent bank beating exchange rates, provide you access to your own dedicated currency specialist who'll get to know you and your requirements. 

Yes, there are no restrictions in Austria if buying in the name of an EU company. 

• Purchase a property with multiple partners – If you want to buy a property with more than two owners then buying in the name of a company is a good option.
• Tax-free ownership transfers – Ownership can be transferred tax free (to children or grandchildren, for example) by a transfer of shares.

The set up costs for an EU company start at around €1,000 and you will be required to pay a yearly maintenance fee of around €800 as well as formalities such as holding an Annual General Meeting.

Across the French, Swiss and Austrian Alps, rental yields tend to vary between 3 and 5% depending on a variety of factors such as the resort, the location of the property within resort (ski in, ski out properties demand a premium), the property itself and the facilities. 

A common misconception is that if you buy a property in a dual season resort you will generate a greater rental income. While your property will certainly benefit from rental throughout the year rather than just over the winter months, properties in dual season resorts tend to generate a similar rental income to properties in resorts where winter is the main focus. The two main reasons for this are that rental rates are significantly lower in the summer season and many dual season resorts are at a lower altitude meaning they have a shorter winter season.

The expenses of a development of chalets or an apartment building are usually divided up proportionately between the owners, according to the size of their property.

As a rough guide the basic running costs for a property usually work out around 3-5 euros per m2/month and this would cover the cost of snow clearance, rubbish removal, water rates, building insurance, and local property taxes, cleaning and lighting for any communal areas, and maintenance of the gardens etc.

These expenses would not include your own personal usage of heating and electricity as this varies depending on how much you use the property.

If you buy a property with extensive leisure facilities such as swimming pools and spas then these costs could increase to around 7-11 per m2/month.

Most holiday homes in Austria are obliged to be rented when their owners are not using them. This is because the tourism industry forms an important part of Austria’s economy accounting for over 15% of its GDP.

It is because of this important tourism industry that the Austrian government does not want owners of chalets to leave their properties empty for large parts of the year. Owners who do not live permanently in the mountains are encouraged to make sure that their property is regularly visited by holidaymakers as it is important for the local infrastructure of the villages to have a good flow of tourism.

Renting your new-build property can have tax advantages as it is possible to reclaim part, or all of the VAT on your purchase, giving a discount of up to 20%. To be eligible for this VAT discount you would be expected to rent your property professionally when you are not using it and you will need to show an overall profit over a period of 20 years.

You are permitted to claim back all the VAT - the full 20% - if you rent your property commercially and do not use it yourself. If you declare in advance that you will be using the property partly for your own private use then the amount of VAT you can reclaim depends on the ratio of personal use to rental use.

To reclaim the tax you will need to register for VAT, and in some cases pay the gross price and then claim the tax back. This usually takes two to three months and you will be appointed a tax advisor to help you with this. It is possible to obtain a bridging-loan for this if required, however in some of the property we sell this is not necessary as the developers will have pre-arranged everything for you so you will only need to pay the net price.  

If you decide to take advantage of the VAT rebate and rent your property to holiday-makers you will be required to pay income tax on your rental income. Much of these taxes can be offset and there are a number of ways to reduce the tax you pay on your rental income.

For example, the interest you pay on your mortgage can be written off against rental income profits and you can also write off 10% of the costs of your furniture package as depreciation against your rental income.

If you rent your property to holiday-makers and pay the income tax for these rentals in Austria then there is an 11,000 euro income tax exemption per person per year, so if two people purchase a property together there is a tax free allowance of up to 22,000 euros per year. If you claim the VAT back on your purchase you will also be required to become VAT registered with the tax authorities for 20 years, but after this time you can de-register and will no longer be required to make annual tax returns. You will need to charge VAT at a rate of 10% on your rentals which can then be reclaimed each quarter upon the filing of accounts.

We always recommend a choice of local tax advisors to help with your tax returns. The tax advisor will charge a one off fee to set up your registration (please contact advisors directly for prices) and annual tax returns will cost in the region of 300 – 500 euros per year.

Tourism Tax:
When you rent your property you will need to charge your guests tourism tax for the nights they spend in your property. These rate of tax varies from resort to resort but as a rough guide it is somewhere between 1 and 3 euros per night per person for each guest over the age of 14 years.

Capital Gains Tax:
The housing market in Austria has been subject to a number of controls in order to keep house prices within reach of locals, especially in the tourist areas. Capital Gains Tax of 30% will apply to any profits you have made on your property (effective since Jan 1, 2016).

Inheritance Tax:
Inheritance tax has been abolished in Austria (effective since August 1, 2008).

Austria is fast becoming the intelligent investor’s business decision. Austrian property offers superb rental income potential for buyers, with one of the benefits being that it offers great dual seasonality with two high seasons in one year: winter for ski holidays, and summer for hiking, cycling and swimming in the warm lakes.