Practical Information

Buying Property

If you are a resident of an EU/EFTA country, you can purchase a residential property in Switzerland without needing a permit. Residents of all other countries need to either have a residency permit or be issued a special purchase permit for non-residents. Only 1,440 non-resident purchase permits are issued each year in accordance with Federal Swiss law. In addition, non-EU/EFTA nationals are restricted to buying only in certain cantons and tourist areas. The Federal Office of Justice has more information.

Property listings can be found on the internet or through real estate agents. The procedures are slightly different depending on which canton the property is located. In most cantons, once you and the seller or his agent have agreed upon the terms, arranged the financing, if necessary, and obtained your residence permit, you will make an appointment with a local notary public, a sworn officer whose responsibility it is to ensure that the transaction is legal and then to implement it. He will check that the real estate seller really owns what is being sold, that you have the right to buy it and that you understand what you are buying. The notary is paid and the property released only when the change of ownership on the real estate has been properly registered. It is usual for the same notary to act in the interest of both purchaser and vendor, however, purchasers may, if they wish, involve their own lawyer.

You may also wish to hire a buyer’s agent to represent your interests when looking for a house. Their responsibility is to find you the best house for your budget at the lowest price. The fee for this service is generally 1% of the final sale price of the house.

The process generally goes as follows:

• You sign a declaration of honour (affidavit)
• The notary uses the declaration to obtain the permit and to have all the clients' details for the deed of sale
• The purchaser will either appear in person before the notary for the document signing or give power of attorney to the notaries' secretary by means of a Procuration drawn up by the notary
• A 10 to 20% deposit is given at the time of signing
• An agreement to buy the property (Promesse de Vente) is drawn up by the notary
• The deed of sale is conditional on permission for the sale to the purchaser being granted by the local administrative body (Commission Foncière), and on any necessary financing being obtained
• The permit can take from three months to a year to obtain, depending on which area and in which canton you are purchasing
• The notary will prepare the mortgage document (Cédule Hypothecaire) and draw up the purchase agreement (Acte de Vente) for signature

Acquiring a mortgage is not terribly difficult, even for non-residents, however, banks only loan 60 to 80 percent of the purchase price, so it is necessary to come up with the difference on your own. In Switzerland you have two separate charges, the interest rate and the repayment rate. The interest rate is paid quarterly and the repayment, depending on which bank your mortgage is with, is paid either quarterly or at the end of the year. Mortgage interest is tax-deductible, offsetting the government-imposed tax on the estimated “rental value” of the property.

Purchase fees differ from canton to canton. In the canton Vaud, for example, the purchase fees amount to 5% of the purchase price, while in the canton Valais, the purchase fees work out to approximately 2.5%. These charges are borne by the purchaser and are made up of legal fees (land registry and notaries fees) and a transfer tax (stamp duty). Agents' fees, however, are borne by the seller. Depending on if the purchaser takes a mortgage, and the bank used, there may be an additional charge for the set up of the mortgage.