Real estate investment in Switzerland
The sale of real estate to foreigners without a residence permit is restricted in Switzerland: permission to purchase is required. Permits are issued by quotas, in individual cantons, and only for holiday properties, not permanent residences.
Statistics confirm the liquidity of investments: residential real estate prices grow every quarter by an average of 1.1%. Five years ago, an apartment of 100 m² cost an average of €862,000, and today it is sold for €1,062,000.
€10,624
Average price per 1 m²
of housing in Switzerland
of housing in Switzerland
1,1%
Average price per 1 m²
increase per quarter
increase per quarter
0,25—3,55%
Buyers’ related expenses,
of the transaction amount
of the transaction amount
How the residential property price index is growing in Switzerland
Cost of a 3-bedroom apartment in Switzerland
€5.5 million
Apartment in the centre of Geneva, on the shores of Lake Geneva
€3.5 million
Apartment on a lakeside in Lugano or 8 km from Davos
€1.5 million
Apartment in Bern
What do investors buy?
Apartments. The most expensive ones are in Geneva.
- penthouses
- apartments
Houses. The most expensive ones are in Zurich.
- villas
- chalets, wooden houses in nature
Switzerland residence permit or citizenship by real estate investment
Obtaining a Switzerland residence permit or citizenship is not connected with purchasing real estate. On the contrary, to buy real estate, you need to get a residence permit because the sale of housing to foreigners without a residence permit is prohibited.
The residence permit obliges the holder to live for at least 183 days a year in Switzerland. After six years, you can get permanent residency and apply for citizenship after four more years.
Switzerland grants residence permits to financially independent persons. To obtain this residence permit, it is necessary to live in the country and pay a fixed tax every year. The canton administration determines the size of the lump-sum tax; the amount is at least ₣450,000. The residence permit for financially independent persons can be obtained in any canton, except for Zurich, Appenzell-Ausserodden, Basel-Stadt, Basel-Land, and Schaffhausen
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Taxes and associated costs
Taxes
Owners pay a property tax of 0.05 to 0.3% of the cadastral value. The rate depends on the canton; some have abolished the property tax, such as Zurich. The cadastral value is 30—60% of the transaction amount.
Rental income is included in the income tax base. If the owner does not lease the property, they pay the income tax on the imputed income, which could have been received from rent. The imputed income equals 70% of similar real estate’s average market rental price. The imputed rental income is also included in the income tax base.
The income tax rate is progressive and depends on the person’s annual income and the canton.
€5,000 Approximate annual costs for
maintenance of an apartment
maintenance of an apartment
Communal payments
Utilities. Water, electricity and gas are paid for by meters. Heating in apartments can be individual or central. Some apartments have wood-burning fireplaces.
The maintenance fee for the building, including fees for the elevator, cleaning, repairs, and security, depends on the management company and building equipment.
Internet, TV and telephone cost €37 to €83 per month, depending on the tariff and locality.
Maintenance and utilities
Electricity, gas, water, heating, and garbage collection |
€100—320per month |
Building maintenanceElevator, cleaning, repairs, and security |
€100—300per month |
The seller pays a capital gains tax of 18% to 100% of the difference between the sale and purchase prices.
The tax rate depends on the canton where the property is located, the property value and the period of ownership. The base rate ranges between 25% and 50%.
A flexible system of discounts and markups is applied to the capital gains tax. For example, if the seller has owned a property for more than five years, they will receive a discount of up to 70%, and if less than four years, they will receive a markup of up to 50% of the amount of the base tax payment.
If the owner sells the property through an agency, they pay a commission of 3 to 5% of the sale price.
18—75% Capital gains tax on the sale
of real estate in Switzerland
of real estate in Switzerland
Expenses on the sale
Capital gains tax
|
18—75% |
Agency fee
|
3.2%—5.4% |
Frequently asked questions
Can foreigners buy real estate in Switzerland?
Yes. Foreigners are allowed to buy real estate in Switzerland. But there are restrictions — you need to get a purchase permit, which is issued according to quotas. In some cantons it is forbidden to buy real estate, in others — you can only buy real estate for temporary residence, but not a permanent residence.
Foreigners with a residence permit — residents of Switzerland — buy real estate without restrictions.
How much does the average house cost in Switzerland?
Swiss real estate prices are among the highest in Europe. The average cost of 1 m² of housing is €10,624.
A 180 m² house in Switzerland costs approximately 2 million euros. Investors most commonly buy villas and chalets. Prices for luxury properties are three to four times higher.
Is real estate cheap in Switzerland?
No. Swiss real estate prices are among the highest in Europe. The average cost of residential real estate is €10,624 per 1 m².
Is Switzerland good for real estate?
Yes. Real estate in Switzerland is among the best and most expensive in Europe. The average cost of residential property is €10,624 per 1 m². At the same time, Swiss real estate keeps growing in price, by 1,1% quarterly. For example, an investor who bought a 100 m² apartment in Switzerland five years ago for €862,000, can now sell it for €1,062,000.
