Real estate in Switzerland: the steps to buying luxury property

Luxury real estate has always played a major role in Switzerland. Switzerland’s prestigious image and breathtaking scenery play an undeniable role in attracting local and foreign buyers to the properties on offer. The diversity and exclusivity of the properties on offer help to create a market that is dynamic but often complex to navigate. What’s more, the stability and strength of the Swiss currency attracts expatriates from all over the world, reassured by the low risk of loss. This makes it all the more important to know and understand the various stages involved in buying a luxury property, and to surround yourself with specialists who can guide you through the home-buying process.

Contacting a specialist estate agent: the first step to buying luxury property in Switzerland

The luxury property market in Switzerland has a number of specific features that set it apart from its European neighbours. The laws governing the purchase of property (particularly by foreigners) set out precise conditions that must be respected by both buyers and sellers, but which can be difficult to understand.

This is where a real estate agency specialising in luxury assets can make all the difference. FGP Swiss & Alps ‘ mission is to open the doors to an exclusive and prestigious world of real estate, where you will discover a collection of exceptional properties selected for their incomparable qualities.

When you call on the services of a luxury property expert, you can also be sure that every stage of your property purchase is carried out according to the rules. For example, before offering a property for sale, the broker will estimate the value of the property, check the conditions according to the canton and provide you with all the key information before and during your visit to the property.

The process of buying a home in Switzerland

The process of buying a property in Switzerland follows a series of stages from which no one can deviate. These steps ensure that both the buyer and the purchaser benefit from a perfectly organised transaction that complies with the law.

The offer

Have you found the home of your dreams? Now’s the time to name your offer. Your broker will be able to help you adjust your offer in line with the base price given by the seller and negotiate with him until you reach the ideal compromise.

Choice of notary

Once your offer has been accepted, the process of buying a house or flat in Switzerland is relatively straightforward. The property transfer system is notarial, so everything goes through trusted professionals. Here again, the advice of your broker will be invaluable: he or she will be able to direct you to a notary close to your new place of residence. One of the great advantages of the notarial system is that any deposit will be held in a trust account by the notary, guaranteeing that you will recover your funds if the sale is cancelled.

The promise to sell and the guarantee deposit

The promise to sell – or compromis de vente – is a written agreement drawn up by the notary. It sets out the purchase price and any special conditions. Signing this document is accompanied by a deposit, usually equivalent to 10% of the purchase price.

Permit to purchase

The agreement between the vendor and the purchaser is subject to obtaining a purchase permit for the property in question. In most cases, the promise to sell will include a deadline for the buyer to apply for and receive the permit. However, the procedure can take up to three months. In some cases, the local authority concerned may even have used up its annual quota, postponing the granting of new permits until the beginning of the following year. Don’t worry: your broker and notary will make sure that the period stipulated in the promise to sell is long enough. Note that foreign nationals are required to provide a residence permit if they wish to buy a principal residence.

Signing the final deed

By the time the purchase permit has been processed, the notary will have drawn up the deed of sale. The buyer and seller may sign this document in person or by proxy. This is when the full purchase price (less the deposit), taxes and costs are paid.

Registering the sale in the land register

This final stage makes you the official owner of the property. The notary will register the sale in the Land Register within a few weeks.

Handing over the keys

In principle, the seller hands over the keys to the property to the buyer once the sale is officially completed. In practice, however, many sellers agree to do this when the final deed is signed. Welcome to your new home!

Resident or non-resident: what impact does this have on the different stages of your property purchase in Switzerland?

While Swiss citizens can of course buy property in their own country without any restrictions, foreign nationals need to be aware of the rules that apply to them. Nationals of EU or EFTA countries resident in Switzerland have the same rights as Swiss citizens when it comes to buying property. Residents of non-EU countries, on the other hand, have to meet three conditions before they can buy their main residence:

• Hold a residence permit (B permit)
• Buying the property with a view to living in it and being domiciled there
• If you are building a new home, you must start work no later than one year after you acquire the land.

To purchase a holiday home or second home, third-country nationals must hold a permit issued by a cantonal authority.

For foreigners living outside Switzerland, the conditions for buying property are more complex, regardless of their nationality. The specific rules may vary from one canton to another, and the Land Registry or the Land Registry Inspectorate are the only authorities competent to make a ruling. Once again, your broker will be able to contact these services on your behalf and provide you with reliable information.

It should be noted that Swiss legislation is different for the acquisition of property for business purposes (offices, shops, workshops, etc.). Purchasers – even non-resident foreigners – do not require any specific authorisation.

What status for your property?

When you buy a property, it is essential – not least for tax reasons – to register it under the status that corresponds to your situation. Apart from professional and commercial use, there are three categories of residential property in Switzerland.

Main residence

As mentioned above, anyone legally resident in Switzerland can apply to buy a flat or house as their main residence. The condition, as the name suggests, is that you must live in the property in question, be officially domiciled there and not rent it out (either partially or wholly).

Second home

By law, foreign nationals are obliged to settle in the property they acquire. However, there is a solution for people who work in Switzerland but do not live there permanently. Secondary residence status allows you to buy a property in your place of work without special authorisation (again, on condition that you do not rent it out).

Holiday home

The purchase of a holiday home must comply with strict rules laid down by the cantonal and municipal authorities. These rules vary and may limit the floor space (unless special conditions apply), the rental terms (generally less than one year), etc. Note that you cannot own more than one holiday home.

What are the administrative costs of buying property in Switzerland?

Regardless of the type of property you want to buy in Switzerland, the process of buying a house or flat involves the following costs:

• Property transfer tax: between 0.20% and 3.30% of the value of the property (depending on the area in which it is located)
• Deed registration fees: between 1% and 1.5% depending on the canton
• Notary’s fees: Between 0.1% and 1% of the purchase price
• Property transfer tax: Varies according to canton (not applicable in Zurich), generally 4 to 5%.
• VAT: Varies according to canton, generally 7.6%

In principle, when a property is sold, the seller pays the estate agent’s commission. These fees can be between 3% and 5%, plus VAT at 7.6%.

Luxury real estate in Switzerland: an exclusive market for exceptional properties

In Switzerland, the luxury sector is booming, and prestige real estate is no exception. In line with the true value of exceptional properties, prices are on the rise, with demand also buoyant. However, the variations remain significant. For an owner, the criteria forvaluing a property are both numerous and complex. The process requires a personalised approach that takes into account the location, individuality and outstanding features of a luxury property.

But selling an exceptional property is not just a financial transaction. It is also an act of transmission, which only a seasoned professional will be able to value properly. In the world of prestige real estate, the channels available for reaching qualified customers are extremely select. For the sale of a luxury property, as for the acquisition of one, personalised support is essential.

Prestige real estate has its own codes, which escape the usual constraints to which the acquisition or sale of traditional properties are subject. As the exclusive representative of Forbes Global Properties for Switzerland and the French Alps, FGP Swiss & Alps applies an approach of excellence at every stage of the property-buying process, guiding each client towards products that will win their heart. In this way, our clients are freed from the need to actively search for properties and can trust us to bring them the property of their dreams.

Are you looking to buy a prestigious residence? We’re here to help you find the exceptional property that will write the next chapter in your real estate history.

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