Switzerland is known for its beauty, stability, and favorable banking system. The real estate market is trusted and has been known for its stable growth over the last 40 years.
Henley & Partners offers clients a full range of services related to acquiring real estate in Switzerland, offering strict confidentiality during each real estate acquisition.
Real estate in Switzerland
Switzerland has restricted the acquisition of real estate by foreign nationals for decades. In principle, all foreign nationals who wish to acquire Swiss residential real estate must obtain approval prior to their purchase, which would otherwise be invalid. Such approval is relatively difficult to obtain. These restrictions also mean that estate planning options for foreign nationals wishing to acquire holiday homes in Switzerland are very limited.
However, it is possible for foreign nationals who hold a Swiss residence permit to acquire real estate for their own personal use. Also, the acquisition and holding of purely commercial real estate by foreign nationals is no longer restricted in Switzerland.
Acquisition of residential real estate by foreign nationals not resident in Switzerland
All foreign nationals who wish to acquire Swiss residential real estate must obtain approval prior to their purchase. An individual may be authorized to purchase a holiday home in a place that is designated by the respective cantonal authorities as a holiday resort. Every authorization must be deducted from the annual quota assigned to the cantons by the federal government for holiday homes and hotel condominium units. The cantons and communities can apply their own restrictions, which may be even more stringent. Holiday homes and hotel condominium units may only be acquired by physical persons under their own name and under no circ*mstances by a company.
As of 2011, there is one sole area within Switzerland to which all of the above restrictions do not apply, due to a federal exemption — click here to learn more.
Acquisition of residential real estate by foreign nationals resident in Switzerland
Since 1997, foreign nationals who hold a Swiss residence permit are allowed to purchase a reasonably sized house or apartment for their personal use with no need to seek prior approval.
Likewise, foreign-controlled Swiss companies that purchase real estate for their own office or production facility use may do so without restrictions. Foreign nationals wishing to acquire Swiss real estate and subsequently spend considerable time actually living in Switzerland may find that moving their main place of residence to Switzerland and obtaining a Swiss residence permit is an attractive option to consider.
Acquisition of commercial real estate
There are no restrictions regarding the acquisition of purely commercial real estate by foreign nationals or foreign entities. Please contact us for further information and advice.
Switzerland — The ultimate place of residence
Switzerland is undoubtedly one of the most attractive countries in the world to live in. An ideal combination of political and economic stability and a clean and safe environment make it the ultimate place of residence. The high degree of privacy and personal security enjoyed by its residents make Switzerland the residence of choice for many wealthy and talented individuals.
There is a high demand for rental properties in Switzerland, making it really profitable to rent a home or commercial property. In addition, mortgage interest rates charged by Swiss banks are among the lowest in Europe, making investing in real estate an attractive financial maneuver.
Foreigners are allowed to buy real estate in Switzerland, but the conditions vary depending on the type of property and the buyer's country of origin. Switzerland has a specific federal law regulating how foreigners can buy property, known as the “Lex Koller” (after former justice minister Arnold Koller).
If you're planning on financing your purchase with a mortgage, you'll need at least 20% of the asking price as a down payment—plus an extra 5% to cover fees and taxes. Fortunately, the transaction fees are relatively low when you buy a house in Switzerland: Real estate transfer tax: 0.20%–3.30%
The country has a flat tax system, meaning that everyone pays the same percentage of their income in taxes, regardless of their income level. This makes it a great place to invest in real estate, as the taxes on rental properties are low, and it can provide a steady stream of income.
A con of living in Switzerland is that the working market can be difficult for a foreigner to access. Foreigners are welcomed but there is fierce competition to get jobs. There are a lot of foreigners who wish to live in Switzerland. Being a small country, there aren't always that many job offers.
Switzerland can be a great place to invest, with a stable economy and strong business culture. Find out more with our guide. There are many different forms of investment available in Switzerland, ranging from property to stocks and shares.
In the Swiss cities of Zurich, asking prices fell by 0.7 percent, in Geneva they fell by 1.3 percent, in Lausanne they dropped by 0.7 percent and Basel by 1.3 percent in the first quarter of 2023. Overall asking prices are around 1 percent lower than in the previous quarter.
Vacant building land is quite scarce in Switzerland, especially in urban regions. Building a house from the ground up is usually more expensive than buying an existing one.
MSCI and Wüest Partner have published the “Switzerland Annual Property Index” for direct real estate investments. It shows that the total return across all property categories was 6.8 percent in 2021, the return on net cash flow was 3.3 percent and the change in value return 3.4 percent.
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