Buying Guide: Switzerland

From cute chalets enveloped in snow, to chic city apartments, there’s a little bit of everything on offer, plus to top it all off you are bang in the middle of Europe and never very far from the likes of France or Italy.

Country Overview
Real Name: Swiss Confederation
Population: 7,604,467 (July 2009 est.)
Currency: Swiss Franc (CHF)
Capital city: Bern
Major cities: Bern, Zurich, Geneva, Basel
Languages: German, French, Italian and Rumantsch
Climate: Conditions vary according to altitude to include a bit of everything. Cold, cloudy, rainy and snowy winters; and cool to warm, cloudy, humid summers with occasional showers.
Location: Central Europe; east of France, north of Italy

Economy
Inflation rate (consumer prices): 0.1 percent
GDP (official exchange rate): $489.8 billion (2009 est.)
GDP (purchasing power parity): $317 billion (2009 est.)
GDP (real) growth rate: -1.5 percent (2009 est.)

Like the rest of the world, Switzerland felt the pinch in 2009 and its economy shrank by an estimated 1.5 percent. Nevertheless, it has maintained its lead in the rankings of the World Economic Forum’s Global Competitiveness Report 2009-2010, reflecting its excellent infrastructure, sound institutional environment, proficient markets, capable macroeconomic management, world-class educational attainment, and high levels of technological innovation, which boost Switzerland’s competitiveness in the global economy.

The Swiss have, for the most part, brought their economic practices into conformity with the rest of the EU in recent years in order to enhance their global competitiveness. But some trade protectionism remains, particularly for the country’s small agricultural sector. Meanwhile, the country’s economy is expected to experience modest GDP growth this year.

Restrictions
Property restrictions in Switzerland depend on who is doing the buying. If you are a non-resident, then you are pretty much limited to purchasing a holiday home in one of the country’s touristic areas. This is because, thanks to new regulations issued by the Swiss Federal Law under the Lex Koller regulations, non-residents are required to obtain a permit from the appropriate cantonal and federal authorities before buying real estate in Switzerland. Once obtained, they can purchase property in Vaud, Valais, Fribourg, Bern, Neuchâtel, Ticino and Graubünden.

EU citizens, who are also Swiss residents, can buy without restrictions, while other residents are limited to buying property for their own use. Wherever you are, your notary will apply for a permit for you only as part of the purchasing procedure. Additionally, special permission must be sought if you plan to buy a piece of land larger than 3000 sq m.

Forms of ownership
All properties in Switzerland are freehold and the buyer has the right to transfer the property to his or her heirs by way of succession.

How safe is it?
As one of the most stable economies in the world, Switzerland enjoys the perks that come with that including a low crime rate. In fact, it is recognised as one of the safest countries in the world alongside Norway and Luxembourg. One of the biggest threats to the country’s safety is one it shares with much of Europe – a serious hard-drug problem.

Mortgages
It is possible to get a mortgage in Switzerland; if deemed to be a safe enough risk. Foreigners can borrow between 60 percent and 80 percent of the house price or bank-appraised value, whichever is lower. The repayment of the capital can usually be paid off over a period of 25, 33 or 50 years, and the rate of interest can be fixed or variable. The good news is that interest rates in Switzerland are famously low.

The buying process
While procedures do differ slightly from canton to canton, the overall process of buying in Switzerland tends to be pretty straightforward.

After decided on a property and your offer has been accepted, you will sign a convention with the seller and pay a cash deposit to secure the start of the purchase procedure. After that, the Swiss Public Notary – who is assigned to protect the rights of both parties – will go through the details of the transaction to ensure everything is satisfactory on both sides of the agreement. Once that is sorted, the notary will ask the Government to issue a notice of confirmation affirming your right to buy, following which you will be confirmed as the new owner, and at which point the price balance, plus tax, will be due. It will take around 48 hours to launch the procedure and a maximum of two months to complete it.

Choosing an area
Switzerland has 24 cantons, and each has something unique to offer. That said, foreigners are not entitled to buy property wherever the wind takes you but are limited to the laws of the land.

If you’d like to start narrowing down your search note that Geneva, Lausanne, Zurich, Basel and Zug are only up for sale if you posses a residency certificate, while things are a little more lenient in areas including Vaud, Fribourg, Bern, Lucerne, Obwalden and St Gallen.

Generally speaking, foreigners will have the largest choice of properties for purchase in the French-speaking part of Switzerland. The most liberal canton is Vaud, which boasts stunning mountain resorts, including Villars, and where foreigners can buy virtually any property they like (bearing in mind, however, that they cannot be sold in under five years).

Viewings
It is strongly recommended to look before buying. Most realtors will be happy to help plan a visit, book a hotel for you and arrange viewings based on your specifications and requirements. They will also be able to set up an informal chat with a bank in order to get the ball rolling.

Legal representation
Although a solicitor is not a legal requirement in Switzerland, having one is certainly worth the peace of mind. After deciding to buy, one will be introduced to a Swiss solicitor whose fees would also include the property’s stamp duty (fees vary from canton to canton).

The sale
The actual process of acquiring a property in Switzerland is quite a straightforward one. The public notary will ensure that everything has been handled correctly, and that the sale can go through, and will proceed with the deed of sale.

As the purchaser, one will either need to appear in person before the notary for the document signing or give the power of attorney to the notaries’ secretary by means of a Procuration. The deed of sale is often conditional, relying on permission for the sale to you (a foreigner) being grated by the Commission Foncière/Commissione Lafe and based on any necessary financing being obtained. This permission can take between three and 12 months to finalise, depending on your canton of choice.

Taxes
As with everything, taxes also vary from canton to canton. In total, these generally amount to around 1.3 percent of the property purchase price per annum.

Taxes have to be paid to three bodies – the Swiss Federal Government, the Canton, and the Commune. In addition to these direct taxes, there is a National Defence Tax, a Land Tax, and a Tourist Tax (taxe de sejour).  Switzerland charges no local tax on rental income on a property owned by a foreigner, unless the buyer is a resident in Switzerland.

AREA GUIDE

Lucerne (Luzern)
Lucerne pretty much epitomises what many people picture Switzerland to be; a picturesque city with stunning scenery including lakes and snow-capped mountains. Life has never been so postcard-perfect.

Popular as a property-spot with both locals and foreigners, Lucerne is a lovely lake-side town in the heart of the Alps. Getting here is relatively easy, so much so that the area has been nick-named the gateway to central Switzerland. There are numerous things to keep people busy here – from watch shops to excursions to the nearby Rigi Mountains. Additionally, it is famous for its two covered bridges decorated with medieval paintings, but also boasts a beautiful castle, as well as a variety of modern shops, museums and galleries.

The area is known for its chalets, but a variety of properties are available for sale including apartments and villas.

Valais
Located in the south-west of Switzerland, Valais is the narrow stretch of land between Lake Geneva and the Rhône Glacier. It is also easily accessible by car, train or plane.

This is a truly unique place to live, with incredible scenery and everything on your doorstep. The weather is balmy during the summer – allowing for swimming and water sports on the lake – and snow-drenched in winter, when it becomes one of the country’s most popular ski resorts and a Mecca for winter hikers.

This canton is one of the most lenient when it comes to foreign property ownership and poses no restrictions. The price for ski properties here are often lower than ones in neighbouring France.

Ticino
This is dolce vita living if ever there was such a thing. Think palm trees, Italian-speaking neighbours, Mediterranean-style towns and stunning countryside landscapes. It is Switzerland, southern style.

With Lugano/Agno airport just 20 minutes away and Milan’s Malpensa airport less than an hour’s drive, access to this pretty region could not be easier and shopping in Italy is just a short drive away.

As a region, Ticino enjoys plenty of sunshine – almost 280 days of it per year in fact – but still retains its greenery and lush feel thanks to number of lakes and rivers dotted around. And, despite the warmer climes, fantastic ski resorts are to be found a short drive away.

There is a wonderful range of properties available here, from lake-view apartments to villas and unique country houses.

Fribourg region
Locals speak both German and French on the streets of the Fribourg Region, and have adopted the best from both cultures. Similarly, it does feel like many of the very best things in life have been packed into this area. Take the Prealps, for instance, with their glorious bike trails, footpaths, and the picturesque small town of Gruyères; or the medieval art-filled capital of Fribourg with its bubbly student atmosphere; or, finally, the Three Lakes Region with its gorgeous Mediterranean flair.

This stunning alpine region has plenty to offer potential buyers, as from dinky apartments to sprawling chalets, it has them all.

Bern
Home to Gstaad, one of the world’s most exclusive ski resorts, Bern boasts some of the most expensive property in Switzerland – although bargains can be found here too.

The city is largely Medieval and has been recognised by UNESCO as a World Heritage Site. Its most famous sights include the Zytglogge, an elaborate medieval clock tower with moving puppets and its awe-inspiring 15th century Gothic cathedral, the Münster.

Graubünden
Graubünden is a large canton in the south-eastern part of Switzerland, neighbouring Italy, Austria and Liechtenstein. One of the bonuses of setting up here, is that is it significantly less touristy than many of the other parts of the region, though just as beautiful.  And there’s plenty to do in this alpine haven – from mountain trails to top-class restaurants and everything in between.

There is a fantastic array of property available here, including ski chalets, apartments and country houses.

Vaud
On the shores of Lake Geneva, nestled between the mountains of the Jura and the Alps, Vaud is the largest French-speaking region in Switzerland. And, for another fun fact, it is also exactly midway between the United States and the Far East.

Happily, the canton of Vaud now allows non-Swiss to buy a principal or vacation residence under certain conditions and in certain zones which is obviously good news for those people hoping to settle in here.

Lively towns and small wine-growing villages appear at random. Boasting a pleasant climate, beautiful scenery and great hospitality, it will quickly feel like home. There are over 200 historical and archaeological sites to be enjoyed, 110 museums, 60 art galleries and 4,000 hectares of vineyards! In fact, few regions offer as wide a variety of lifestyle pursuits as does the area surrounding Lake Geneva.