Switzerland is all about mountains, cheese and watches! So many of you would believe, but is that why Phil Collins, Tina Turner,-Alain Delon, Michael Schumacher, Brian Ecclestone and many more, live in Switzerland? Some might say: 'No, it is purely for tax reasons', but a closer survey shows a more complex image

Wetag Consulting, the leading real estate agency in Ticino, the southern part of Switzerland, specialises in private luxury property and sells up to 75 percent of its total sales volume to foreigners. “I always ask our clients why they decided to move here,” says Ueli Schnorf, one of the owners of Wetag. “They regularly point out the very same five or six important factors which gives Switzerland a hard-to-copy edge over any other destination.”

Diversity and beauty of nature
Switzerland’s nature is beautiful. Within a two or three hours’ distance Switzerland covers both Europe’s highest mountains with glaciers, and subtropical lakes with palm trees and bougainvilleas. Words of this ‘wonderworld’ spread within educated Europe in the Romantic times starting approximately around 1750, and it became fashionable among the French and English elite to do travels to Switzerland, and to report about it in writing or painting (remember Turner’s famous Rigi-pictures?). These impressive descriptions fell onto fertile soils, and since the mid 1800s Switzerland is ranking uninterrupted among the world’s top ten holiday destinations. For more than 100 years now, 10-20 percent of Switzerland’s population are foreigners, a quota at least double as high as in any other European nation.

Security, high standards of living
Switzerland is safe, showing a low criminal rate, victimisation risk is among the industrialised nation’s lowest. Life in Switzerland is considered as agreeable, not only for a happy few. Polls list Zurich, Geneva, Berne at the top of ‘World’s quality of life’- surveys (Mercer reports). No other population considers itself happier than the Swiss (World database of Happiness).

Health infrastructure
Switzerland’s compulsory health system is among the world’s most expensive, only US citizens show a higher per-capita figure for health-related expenses. But the Swiss buy high quality: Their health system counts as the world’s most sophisticated. Who is carried in an emergency to the next hospital can be sure, he is in excellent hands. The number of high-tech hospitals per capita is up to ten times higher than in the surrounding countries. Many of the rich and famous fly to Switzerland to get medical cure.

Political/economical infrastructure
A well founded democracy with several large parties and extensive rights for each citizen make quick changes nearly impossible, thus rendering Swiss politics rather boring but giving a high degree of continuity for the individuals and a much welcomed feel of stability.

Public service has a long tradition and is working well. Schools, communication services, transport, post, police and justice are efficient and transparent; the famous banking system is maintaining a wide number of branches for locals’ needs.

Nearly everybody speaks more than one language; the country has four official languages – German, French, Italian and Rumantsch.

Tax law
On a worldwide scale, including all continents, Swiss taxes are ranging in the better midfield but are still Europe’s most attractive. Most Cantons abolished inheritance and donation tax, VAT is a shy 7.6 percent.

Company-taxes are Europe’s lowest too (Switzerland shares this pole-position with Ireland) and range between approx. 14 percent and 20 percent on gain. Taxes in UK or Germany may be double or triple this amount.

Furthermore there is this Swiss tax specialty attracting wealthy foreigners: Several Swiss Cantons offer an attractive fixed yearly flat tax to foreigners taking first residence and declaring not to work (but living from their wealth).

Due to Switzerland’s political structure, each of its 24 cantons has a legal system of its own, resulting in quite strongly deferring taxes. Most attractive cantons such as Zug or Ticino will charge its inhabitants probably only half of what their fellows in an expensive Swiss canton will have to pay.

Attractive cost structure
Such advantages normally come at a high price; Switzerland in general is expensive. But wages are very high too, resulting in a favourable buying power. It is quite a surprise to find then that Swiss property prices aren’t as high as expected, but range in the international midfield only. Sole exceptions are famous St Moritz and (to a lesser extent) Gstaad, which are very expensive indeed.

Expect a new 200sqm luxury-flat in prime position to cost approximately £1.3m in the Zurich, Geneva, or Ticino-area alike, while you may pay four times as much in Monte Carlo, triple in Manhattan, New York, or double in London or Paris (or Swiss St Moritz too). These results are due to the facts that Swiss property prices lagged the international price rises of recent years, and widely available mortgage rates are lower than in most other countries. Calculate a mortgage amounting to at least 50 percent of purchase price to rate at 2.75 – 3.5 percent, at the moment.

Furthermore there are buying restrictions (for foreigners) preventing prices to skyrocket: Non-residents ie holiday buyers, are only allowed to buy and hold one property in Switzerland, only in so-designed ‘holiday areas’ such as well-known mountain resorts or sunny Ticino, and not exceeding a certain size (surface/living area). Foreigners ready to take first residence may buy property without restriction, as Swiss citizens can. But they will be subject of approval of residency. Residence will be granted for working reasons (the employer will apply for the permit, confirming the working contract), or if financial independence can be proofed.

Yearly property tax, calculated on both value and on a theoretical ‘property income’, is very low. Buying procedure may take a while (between two weeks and three months), but cost is low again, calculate to pay between 1 and 3 percent of purchase price.

It is all the mentioned factors that make Switzerland so attractive, all adding to the quality of life and making Switzerland a place to live and invest. Since the number of foreigners living in Switzerland exceeds 1 million (whereas the population of Switzerland is +7 million), the well-known stars – some of them with flat-tax agreements - are just the tip of the iceberg.

All pictures © Wetag 2006

Wetag Consulting Immobilare, Locarno Switzerland Ueli Schnorf and business partner Peter Albrecht bought Wetag Consulting in 1997. They developed the 30 years old Wetag company-into the leading luxury real-estate broker of southern Switzerland (Ticino-area). Wetag has offices in Lugano, Locarno and Ascona. Wetag is affiliate of Christie's Great Estates, further a member of RELO Leading Real Estate Companies of the World, and a founding member of EREN European Real Estate Network. Tel: +41 91 751 31 06. Fax: +41 91 751 96 38 Email: schnorf@wetag.ch Web: www.wetag.ch