Background

Housing in Switzerland

Switzerland has a shortage of land suitable for building, resulting in the high cost of residential property. On average, 20 percent of income is spent on rent. The country has the lowest home ownership rate in Europe at 37 percent, though the rate is rising slowly.

Despite the dramatic price increases seen elsewhere in Europe over the past few years, Swiss property prices have been rising very gradually since 2000. The Globe Property Guide reported that the price of a single-family home rose only 1.8 percent in 2006.

For many years the Swiss restricted the sale of property to foreigners. With the EU/EFTA bilateral agreement of 2006, it is relatively simple for EU/EFTA foreigners to buy property in Switzerland. For residents of other countries, however, it is still necessary to obtain a residency permit before purchasing residential property. In addition, cantonal authorisation is needed before gaining title. Each canton has slightly different rules and the rules even vary from commune to commune within the canton. Generally speaking, non-EU/EFTA foreigners have the largest choice of properties in French-speaking Switzerland. The most liberal canton is Vaud, which includes mountain resorts such as Villars where foreigners can buy virtually any property and resell immediately.

By 2010, each canton will have the responsibility for its own foreign property acquisition laws, which will result in a faster transfer of property title, as opposed to the delays from red tape of the current system. This is expected to increase the demand from foreign buyers. However, in order to discourage speculation, Swiss taxes and laws are not favourable for buy-to-let investors, who face multiple income taxes that can easily exceed 50% of total income, and tenancy laws, which are pro-tenant.

The Federal Office for Housing is responsible for all housing-related issues.