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Buying a property in Switzerland - What you need to know

11 Mar, 2024 by Investors In Property

Can foreigners buy a property in Switzerland?

Yes, foreigners can buy property in Switzerland but there are restrictions at national, regional and local level on where and what foreigners may buy.

Can Americans buy property in Switzerland?

Yes, although some Swiss banks do not lend to US citizens.

Can British citizens buy in Switzerland?

Yes, British citizens may buy in Switzerland and Brexit did not change that.

If you were originally from the UK and were resident in Switzerland before 1 January 2021 you have the same property rights as if you were Swiss.

Each of the 26 Cantons has their own rules but property experts, Investors in Property have simplified them for you.

These are the key facts about buying a Swiss property:

  • What type of property can foreigners buy in Switzerland?
  • Where can foreigners buy and what are the local regional restrictions?
  • What is the purchase process for buying a Swiss property?
  • What are the purchase costs buying property in Switzerland?
  • How much are the annual property taxes in Switzerland?

See the summary below or for more detailed info see our Buying in Switzerland guide.

Can a foreigner buy any property in Switzerland?

Foreigners may buy hotels and commercial properties in Switzerland, but they are only permitted to buy one residential property in certain areas and a maximum size.

Foreigners may only buy property in the touristic areas of Switzerland unless they are resident in Switzerland.

A foreigner can buy a holiday chalet or an apartment in most Swiss ski resorts as these are in tourist areas.

Foreigners are not permitted to buy a property in Geneva, Basel, Zurich, Zug or in any of the cities in Switzerland unless you are resident in Switzerland.

Foreigners may only buy a residential property which is less than 200m2 net habitable and less than 1,000m2 of land.

Can I buy a Swiss property in the name of a company?

No, Foreigners are not permitted to buy a residential property in Switzerland in the name of a company.

You must buy in your personal name (or in the names of family members over the age of 18).

If I buy a house in Switzerland can I live in Switzerland?

Switzerland does not have a golden visa or foreign investment incentive scheme.

Buying a second home in Switzerland does not give you the right to live in Switzerland.

Most foreign nationals are permitted to live in Switzerland for up to six months per year, but visas may be required, and other limitations apply to certain nationals.

You will need a permit to work in Switzerland or to retire and live in Switzerland full time.

A permit holder may buy a property as their principal residence in any city or in ski resorts such as Zermatt which have restrictions.

Restrictions may still apply if you are originally from a country outside the EU.

For example, a British or American citizen cannot buy a principal residence in a city (e.g. Zurich) and a second home in Zermatt unless they have a C residence permit.

Can a foreigner buy land in Switzerland and build a chalet?

No. Foreigners and even Swiss citizens are not permitted to build a new second home in an area (commune) where over 20% of the properties are already second homes.

You can buy an old property and renovate it and extend it, but you cannot build a new holiday home in any ski resort.

But both Swiss and foreigners may buy a new build property which is classified as a touristic property and which must be offered for rental when you are not using it.

The Lex Koller (the Koller Law) established a permit system so Non-Swiss residents may only buy in tourist locations and restricted the size of property foreigners may buy.

Foreigners may only buy a holiday home less than 200m2 habitable area and less than 1,000m2 of land unless they are resident in Switzerland.

Most cantons prohibit foreigners selling within 5 years of purchase.

But a foreigner who buys a new “touristic property” which has a “rental obligation” may sell at any time without penalty.

There are a variety of other restrictions at a regional (Canton) and local (Commune) level.

All the Swiss properties listed on our web site are available to foreigners unless clearly stated otherwise.

Do I need a permit to buy a property in Switzerland?

Your notary will apply for the permit but only when you have started the process to buy a particular property.

So take our advice about what and where you should buy, make some viewings and then we and your notary will handle the process for you.

What is the purchase process for buying a Swiss property? 

Make an offer – take advice from your agent and make an offer for a property.

Sign a reservation contract - and pay a small deposit. The developer or vendor will countersign the contract and the property will not be marketed to other potential buyers for a period while you prepare your mortgage application and begin the purchase process.

Applying for a mortgage - Swiss banks will lend up to 70% of the purchase price. We can make several recommendations and only work with local mortgage providers who know the area and the market well and give a good service with documentation in English.
Notary appointed - Once you have secured a mortgage offer, a Swiss notary will be appointed to manage the sale (acting on behalf of the purchaser and vendor). The notary is usually appointed by the agent who agrees the sale. We have a selection of preferred notaries in all the resorts where we sell, who provide documentation in English and offer an efficient service. You do not need a solicitor acting on your behalf (as in the UK) because the public notary acts for both parties.

Applying for a foreigner purchase permit - The first step the notary will take will be to collect all the necessary information (the buyers’ personal info, the vendors’ personal info and the key information regarding the property) to prepare an application for a foreigner purchase permit and the deed of sale. The notary will send off the application for the foreigner purchase permit and this will need ratifying by the Cantonal Authorities. This usually takes 2-4 weeks and would only be refused if you already own another property in Switzerland or the property does not comply with the rules.
Signing the deed of sale - Once this permit has been granted the deed of sale must be signed within 30 days. You can either go to the notary’s office to sign in person or sign a power of attorney. The notary will also liaise with the bank to register your mortgage.
Registration & handover - The sale will then be written into the Land Register. This will take a few weeks, however, many vendors and buyers will agree to a handover of keys (and responsibility for the property) once the signing has occurred as the sale is then inevitable. However, the sale is only formally complete once it has been registered.
If a property was professionally rented before a sale, the new owners often pick up where the old owners left off and it is common for rental agreements to be transferred following a sale.

What are the purchase costs buying a property in Switzerland?

The purchase costs to buy in Switzerland is one of the cheapest countries in Europe to buy a property, and by far the cheapest in the Alps.

The total purchase costs are usually in the region of 2.5% to 3.8% (purchase tax, land registry fees & notary's fee) in most Cantons.

Canton Vaud is more expensive as total purchase costs are around 5%. 

The mortgage registration fee is charged on a sliding scale on the amount of the loan and varies from Canton to Canton. 

In Canton Valais, the fee is progressive 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% but decreasing to as little as 0.44% the larger the loan taken.

It is possible to avoid paying the mortgage registration fee if there is an existing mortgage on a property.

The buyer can either take over the loan if the bank agrees or transfer the mortgage “note” so their own bank may use it without having to register a new one. 

Who pays the purchase costs in Switzerland – the vendor or purchaser?

The purchaser pays all the costs when buying a property in Switzerland so when you come to sell you only pay the agent’s sales commission.

What taxes will I pay on a Swiss holiday home?

Foreigners owning a property in Switzerland pay taxes to three authorities - the Federal Government, the Canton, and the Commune. 

As a rough guideline, we suggest that the total annual property taxes in Switzerland will be somewhere in the region of 0.6% of the purchase price.

Below we have summarised the main taxes to be aware of at a federal and cantonal level. Communal/municipal taxes vary from resort to resort.

1) Income tax

Income is taxed at a federal, cantonal and communal basis regardless of whether you are renting your property or not. 

Property owners are taxed on a notional income for the right to use the property. Based on the property itself and the state of the local rental market, a notional income will be calculated for your property and will form the basis of the tax charged by the federal government, canton and commune.

2) Annual wealth tax

Annual wealth taxes are levied at a cantonal level. The wealth tax rate is calculated based on all assets held by an individual in Switzerland.

The amount of wealth tax due on a property is based on its tax value, which is determined by the canton using a range of assessment criteria. The tax value of a property is significantly lower than the purchase price.

Debts, mortgages and loans are deductible whether they relate to the property or not.

3) Annual property tax

Most cantons also charge an annual property tax in addition to income and wealth taxes. It is based on a notional cadastral value of the property (not the market value).

It is 0.015% in Valais and Bern and 0.010% in Vaud.

4) Capital Gains tax

Profits from selling a property in Switzerland are subject to capital gains tax levied by the canton. The tax is calculated on the difference between the original purchase price and the sales price.

Deductions may be made for the purchase costs and the sales costs including the agents sales commission and the cost of any renovations or improvements to the property.

The rate of capital gains tax in each canton depends on the duration of ownership and the amount of profit.

Canton Valais, where most of the ski resorts are located, has one of the lowest capital gains tax rates of any of the 26 cantons. 

5) Inheritance tax

Inheritance tax is also levied by the Canton but is very low. None of the cantons levy inheritance tax on gifts / bequests to spouses.

Only 4 cantons tax gifts / bequests to a direct descendant (Appenzell Innerhoden - 1%, Luzern - 2%, Neuchatel - 3% & Vaud - 3.5%).

Gifting/inheritance of a property in Switzerland to a third party is subject to a tax of between 15% and 55%.

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

For more detailed tax advice on a specific property, we recommend seeking specialist tax advice. We can put you in contact with local tax experts in all the major resorts. 

How much does it cost to sell my Swiss property?

The average costs and expenses associated with purchasing and selling a property (transfer taxes, registration fees, notary fees, and legal fees) vary hugely.

The Global Property Guide estimates the roundtrip costs (buying and selling) total 6.21% in Switzerland compared to 3.3% in Denmark (lowest in the EU) and 16.85% Belgium (highest in the EU) .

Sales agents fees vary within Europe and also within Switzerland. Sales commissions are generally higher in the ski resorts than in the major cities and 5% is standard. If you are thinking of selling your Swiss property and would like a valuation please contact us