Foreigner’s Guide to Buying a House in Switzerland
Buying a house in Switzerland as a foreigner might seem daunting at first, but with the right knowledge and guidance, it can be a smooth process. Switzerland, often referred to as ‘the little country,’ offers a unique housing market regulated by cantonal laws, making it an appealing destination for international buyers.
Your Best Bet: Working with International Sales Companies
When it comes to buying a property in a desirable resort area such as a winter sports location, your first step should be to engage with a reputable sales company that specializes in international sales. Recommended options include Engels and Volkers, which have agents fluent in your native language. This can save you from the challenges of the local dialect, such as Swiss German, which can be quite different from standard German. These companies can help you navigate the local market and ensure you get a fair deal.
Understanding the Swiss Real Estate Market
Switzerland is known for its high costs, particularly for residential properties. Even properties that may seem affordable to your expectations, such as a small A-frame house with dimensions of 70-120 square meters, might be priced higher than anticipated.
As an example, my own single family home, which required a significant remodel and had 1.5 bathrooms, was valued at 130 million Swiss Francs (CHF) before the renovation. A comparable home for first-time buyers in the U.S., if purchased years ago, would have cost approximately 1.6 million CHF in a rural canton. This is a testament to the high property costs in Switzerland.
Sales and Legal Process
The good news is that you generally do not need to work with an attorney. The sale of property is managed by real estate professionals and recorded by a notary in each canton. This makes the process somewhat straightforward and legally binding.
Non-EU Nationals Buying Property
Non-EU nationals, like myself, have additional options. You can negotiate a joint tax agreement, which involves lump sum taxation. This agreement can be used to obtain a B permit, which allows you to live in a greater number of cantons. While this makes sense for those earning over 270,000 CHF annually, it has its limitations. For instance, you might need to move south of the current canton to achieve better relocation opportunities.
These agreements are particularly beneficial for people who want to reside full-time in this safe and well-run country. The green party attempted to abolish these agreements last year, but public sentiment in favor of supporting foreign residents won out. This is fortunate for me, as alternatives like moving to the south are less appealing.
Many Russians have made Switzerland their home through these agreements, demonstrating the trend towards more flexible tax policies for non-EU residents.
Challenges and Opportunities
While there are opportunities and benefits to owning property in Switzerland, there are also some limitations. Switzerland is considered a more inward-looking country compared to some of its European neighbors. The Swiss pride themselves on a benevolent capitalistic model, where they keep profits and wages high, allowing them to charge what would be considered predatory pricing elsewhere.
One downside to consider is the relatively less cosmopolitan atmosphere compared to some neighboring countries. It is stated by the Swiss themselves that they do not mind change but prefer that it does not occur too rapidly.
Conclusion
Buying property in Switzerland as a foreigner can be a rewarding experience, but it requires careful planning and knowledge of the local market and legal processes. With the right guidance and understanding, you can find a home that suits your needs and budget. Remember, Switzerland is known for its high costs, but the benefits of owning property here may outweigh the initial investment.