How to buy a home in Switzerland

Switzerland is a highly regulated real estate market and may be a source of great confusion for expats moving to Switzerland. House prices vary greatly from area to area and rules on foreign ownership can confuse anyone. In this article we explain how to purchase real estate in Switzerland as an expat.

Should you rent or buy in Switzerland

Home ownership in Switzerland is among the lowest in the world with only around 40% of the population owning their home. With a hot property market and a slow home-buying process, many expats initially decide to rent before considering other options. However, particularly in bigger cities this can be an agonizing experience for many with properties being limited and in high demand. In places such as Zurich, Geneva or Basel home prices can go through the rough and potential tenants may even be required to provide an application or give an interview to property owners.

Can foreigners buy property in Switzerland

Switzerland has strict regulations as to who can buy property. Therefore, depending on your background or living situation in Switzerland you may find your options are limited. If you wish to buy property, there are only really two good options :

  • You are an EU or EFTA national with a Swiss residence permit living in Switzerland
  • You hold a Swiss C Permit

In both the above cases you have the same rights as a Swiss national to buy and own property. You can either buy investment properties, residential property, commercial properties or second homes without any restrictions. If you are holder of a Swiss B Permit you may also own property but only as your personal residence.

Those outside these categories, such as non-resident foreigners, foreign residents without a Swiss work permit (including those working for diplomatic missions, UN agencies, and CERN), or workers on short-term or seasonal work permits, may not be allowed to purchase property or may have to apply for a license to purchase.

Cost of buying property in Switzerland

Although buying property in Switzerland is incredibly expensive, the country is in fact one of the lowest in Europe when it comes to transaction costs. Total costs paid by the buyer are usually between 0.25% – 3.55% of the overall property cost. The seller pays somewhere between 3.23% – 5.38%.

Buyer’s costs include :

  • Real Estate Transfer Tax, which is between 0.2% and 3.3%
  • Registration fee – 0.15%
  • Notary fees – 0.1%

Buying process of property in Switzerland

In Switzerland an assigned Notary handles all affairs of a property transfer. In most cantons Notaries are public officers working for both sides. The buyer may suggest a Notary or the seller may already have assigned one. The process is usually as follows :

  • Notary will draft a purchase contract between the buyer and seller
  • Once the agreement is signed, the buyer will have to pay the seller through an account of the notary, which will hold the amount. Such amount, considered a reservation deposit, is in most cases around 10% of the total purchase price, except where prices may be higher, such amount may be less than 10%. In most cases this amount is non-refundable. This payment must be made through a Swiss bank account or a bank with a Swiss banking license.
  • Once the amount has been received by the Notary, they will prepare a Notary Act and Power of Attorney to transfer the property.
  • The buyer must then make payment, which in most cases is the remaining payment of 90%.
  • The Notary will then notify and handle the change of ownership. During this process, the seller is required to leave the premises as agreed by the parties in their initial purchase agreement.