More than 60% of the people prefer to rent a house in Switzerland; therefore buying a house is not a common thing. Oddly enough, in some of the most popular Swiss cities such as Zurich, Basel or Geneva, there are even less property owners. The number of property owners is larger in rural areas an lower in popular cities, also due to the constant growth rate of urban population in Switzerland over the last years. Thus, pressure on limited available houses has also increased.
In Switzerland, there are strict regulations regarding the purchase of property by foreign citizens, therefore the options are quite limited in this case. Foreign citizens can buy property in Switzerland if they meet the following criteria:
- they are citizens of EU or EFTA member countries with a Swiss residence permit and reside in Switzerland;
- they hold a Swiss C Permit.
In both cases, the rights for purchasing a property will be the same as for a Swiss citizen so that they can buy holiday homes, business spaces or investment properties, in addition to having a primary residence.
Foreigners that have a Swiss B Permit are able to buy a property in Switzerland, but not to live in it.
The purchase of a property may not be allowed for those foreigners who are not included in these categories, such as non-residents, foreign residents that don’t have a Swiss work permit (including those working for diplomatic missions, UN agencies and CERN) or workers that have only short term or seasonal work permits, unless they apply for a license to purchase. The licensing criteria for purchasing property can vary from one canton to another, but applicants that want to purchase a primary residence and have been settled into the respective canton for five years or more are typically favored.
Buying a property in Switzerland must be done according to the zoning regulations. Local taxes vary on cantonal and communal level. For example, persons who are not working in the agricultural field may buy properties on agricultural land, such as farms and houses. Constructions, extensions or in some cases even repairs to buildings that are not specifically required for agricultural work can be done only under strict regulations.
Detached houses and apartments have annual charges for maintenance services, car parking, private roads that have a rate of 1% of the sale price annually.
In Switzerland, the costs of buying a property are made through mortgages, which are in most cases arranged directly with the creditor, in most cases a bank. Usually, the minimum deposit for a mortgage is 20% of the sum, of which a least 10% should be in cash. Considering that prices are high for some properties in certain areas, this deposit may be quite prohibitive.
A notary handles Swiss property transfers. The notary’s fees should be considered somewhere around 5% of the sale price. These fees include the property transfer tax, registering of the deed with the land registry office and the notary’s own fees.
For entrepreneurs interested in buying a Swiss property to use as a company office, they should rather consider renting an office in a Swiss business center, as they can benefit from all the facilities provided by it, with lower costs.