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Buying Property in Switzerland - Guide for Foreigners

Purchase a Property in Switzerland

Updated on Thursday 09th May 2024

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Buying property in Switzerland is available for most foreign citizens interested in real estate ownership. For some of them, there are specific requirements to respect, such as obtaining residency first, however, this will also come with additional benefits.
 
 
If you are a foreigner and want to acquire real estate in this country, you can rely on our lawyers in Switzerland.
 

Are there any restrictions if wanting to purchase a property in Switzerland?

 
There are several restrictions applied to foreigners wanting to buy real estate properties in Switzerland. These restrictions refer to quotas for Swiss residence permits imposed to foreigners because one must obtain a residence permit in order to be allowed to acquire a property. These restrictions depend from canton to canton. Even foreign or Swiss companies with over 30% foreign ownership have restrictions when buying property. Some cantons impose restrictions on the area a property can have, other put restrictions on how many properties foreigners can buy in Switzerland, while other on the timespan a property can be resold.
 
The Federal Act on the Acquisition of Real Estate by Persons Abroad and, potentially, various cantonal and communal laws that may stipulate additional provisions govern the purchase of real estate by non-Swiss individuals who are residing abroad in Switzerland. Contact our law firm in Switzerland if you want to buy a property here.
 
 Quick Facts  
 Specific legislation applicable (YES/NO) Yes, Federal Act on the Acquisition of Real Property by Persons Abroad 

 Possibility to acquire Swiss properties by foreigners (YES/NO)

 Yes, with certain restrictions

 Types of properties that can be purchased in Switzerland

- houses,

- apartments,

- commercial buildings, etc.

 Real estate due diligence required (YES/NO)  No, real estate is not mandatory but recommended.
 Documents to draft for property acquisition

- sale-purchase contract,

- details of the seller and buyer,

- power of attorney (if necessary) 

 Financing options availability (YES/NO)

 Yes, one of the most popular is mortgage.

 Special property acquisition programs for foreign citizens (YES/NO)

 No, there are no special programs available for foreign citizens.

 Timeframe to acquire a property in Switzerland (approx.)

The process can take between 1 and 3 months, depending on the type of transaction. 

 Taxes to consider upon a property purchase

- real estate transfer tax,

- notary charges,

- registration fees

 Land Registry registration requirement (YES/NO) Yes 
 Best cantons to buy properties in

Zug, Appenzell, Glarus, Uri (the last 3 are the cheapest cantons) 

 Residency requirements for foreign citizens buying real estate

 Yes, citizens of non-EU states must first secure permanent residence permit to acquire Swiss properties.

Possibility to appoint a Swiss  representative during the transaction (YES/NO)

 

Yes
Property taxes

- property tax,

- rental value tax,

- property gains tax 

 Support in buying a property in Switzerland (YES/NO)  Yes, our lawyers in Switzerland can assist in the process of buying real estate.

 

Who needs authorization to buy a Swiss property?

 
With respect to those who need permission for buying property in Switzerland, the law applies to non-EU and non-EFTA citizens living here. The authorization is available for the following types of real estate:
 
  • properties bought as holiday homes the owner can put out for rent;
  • second homes that are not intended for rental purposes;
  • residential properties in serviced buildings.
 
Restrictions are lifted provided that:
 
  • the buyer will live in the house and not rent it out;
  • the owner has a valid temporary residence permit;
  • the foreign citizen purchases land and intends to build a home provided the construction is started within a year of the acquisition.
 
In terms of immigrants who need to obtain authorization for the acquisition of a real estate in this country, let us inform you on who does not need one. These are:
 
  • EU and EFTA citizens can buy both built properties and land;
  • British citizens falling under the Agreement on Acquired Citizens’ Rights.
 
If you need support in purchasing a property as a non-EU/non-EFTA citizen, our Swiss law firm is at your service. We also have an infographic on this subject:
 
 
Buying a Swiss Property as a Foreigner
 
 

Finding a property to buy in Switzerland

 
Most Swiss properties are put on sale online through real estate agents and agencies, but also in newspapers. Choosing the right type of real estate depends on several factors, among which:
 
  • the canton it is located in, in some cantons prices are higher, while in others they are lower;
  • closeness to the border, Switzerland is a small country, and many foreign citizens commute for work here;
  • if the property is bought to live in, to rent, or use a vacation home, especially when it comes to the country being known for its mountain ski resorts;
  • the type of real estate, which can be a house, an apartment, a condo, etc.;
  • the size (number of bedrooms);
  • nearby attractions and/or facilities.

 

Please note that each canton has specific quotas related to the number of properties that can be acquired on an annual basis.
 
Most foreign citizens use the services of real estate agencies to find a suitable place followed by the guidance of a Swiss lawyer to complete the transaction. We can also assist if you are interested in financing options with tailored advice on the documents you need to prepare.
 

The Swiss real estate market

 
The rental and acquisition of real estate in Switzerland is a competitive market. It can also be aa bit confusing because Switzerland is divided into 26 cantons, and each of which may have different housing market restrictions. However, when it comes to foreigners buying Swiss properties, an important thing to notice is that owning a home for professional use is not prohibited to anyone. This happens because a lot of people (especially from Italy) commute on a daily basis to work in Switzerland.
 
Our law firm in Switzerland is at your service if you have any other questions about buying real estate in this country.
 

Real estate due diligence when buying property in Switzerland

 

Real estate verification is recommended in Switzerland, even if it is not mandatory. This is a simple procedure that can be completed by the future buyer through which he or she can uncover:
 
  • legal issues related to the previous owner;
  • technical flaws;
  • unpaid bills;
  • unpaid mortgages.
 
Even if these are quite uncommon when buying property in Switzerland, it still is a good idea to have it checked. Our lawyers can assist with such procedures.
 

The main steps in purchasing real estate

 
Despite all the restrictions when an investor has decided to purchase a Swiss property the process is quite simple. The first step is to request the services of a public notary. The notary will draft an agreement for the purchase of property (promesse de vente) and around 10% of the property’s price will be deposited with the notary.  However, the agreement will not be drafted until the notary does not receive the permission of the competent cantonal authorities. It takes about two to three months to receive permission. It is also important to know that the authorities may impose certain conditions on the use of the real estate. Once the permission was granted and the contract is signed, the buyer must deposit the rest of the payment with the notary. The notary will then register the property with the Swiss Land Register and give the rest of the money to the seller. The registration should not take more than two weeks if all the requirements are met.
 

Visit the property about to purchase

 
So, you have found the house or apartment you want to buy. The next step should be to schedule a visit as soon as possible because the market is quite competitive, and your dream home may be sold sooner rather than later.
 
If you decide to acquire it, you should submit an offer to the seller through a real estate agency or directly. You can also rely on our Swiss lawyers at this stage. At this point, you will usually need to present evidence of funding, such as a mortgage agreement or a letter from your bank confirming they would lend you the necessary sum.
 
The first step toward truly owning the Swiss property you wish to purchase is signing the reservation contract. It comprises a deposit of up to 10% of the purchase price. The sum is deducted from the down payment on the house.

Completing the property purchase in Switzerland

 
When buying a property in Switzerland, the buyer and seller will usually meet in a public notary’s office to complete the transaction. If necessary, the notary will review the authorization, and draft the deed of sale. You can also count our lawyers in Switzerland for a review of the contract.
 
In the case of foreigners, the notary will draft the deed of sale and request the next stage payment (for a recently built property) or the remaining amount (for resale property) as soon as the permit is authorized, which typically takes 4-6 weeks.
 
 The notary will assist with the mortgage registration (if applicable) and recording the transaction in the land register after you have signed the deed. You should also receive the keys and the property before that, however, it may take a few weeks. 
 
Please note that you also need to open a bank account in Switzerland in order to deposit the amount necessary for the payment. If you do not have one, you can rely on our specialists for assistance in setting it up.

 

What are the costs related to property purchases in Switzerland?
 

The transaction fees when buying a property in Switzerland are lower than in Germany, for example. The notary fee will be around 0.2- 1%, the registration fee 0.25% and the property transfer tax that depends from canton to canton ranges between 0 and 3.30%. Zurich no longer levies the property transfer tax. The VAT rate also varies when purchasing properties in Switzerland.
 

Purchasing a Swiss property through mortgage

 
It is not uncommon for foreign citizens to buy Swiss properties with mortgages.  You must apply to a bank for a mortgage before putting in an offer.  The lender evaluates your application and determines whether to extend a mortgage to you based on the value of the property you are considering. Usually, a 20% deposit is required, with at least 10% in the form of cash.
 
The financing can be finalized after the price is established in writing. To complete the details in the financing arrangement, you can bring the housing agreement to the bank or mortgage provider. The buyer and the vendor will arrange the paperwork and transfer if you are interested in making a cash payment.
 
Once you purchase real estate in Switzerland, you must know that you will need building insurance. You can also get additional coverage for natural catastrophes like flooding, fire, and others. You will need to set up providers for things like energy, water, internet, and TV in addition to insurance. Here is also our video on this subject:
 
 
 
 
We remind you that our lawyers are also at your service if you want to open a company in Switzerland.
 

Average property prices in Switzerland

 
Switzerland is one of the most expensive countries in Europe to own a property in, however, it is also one of the most exclusive destinations to live in.
 
When it comes to real estate prices, some of the most expensive Swiss cities to buy apartments in 2022 were:
 
  • Zurich with an average cost per square meter of 13,920 EUR;
  • Geneva with an average price of 15,430 EUR per square meter;
  • the capital, Bern, with an average price of 8,970 EUR per square meter.
 
Our Swiss law firm can provide you with information about the most advantageous cantons to buy property in. You can also contact us for details on the taxes and registration when buying property in Switzerland.