Buying Property in Switzerland as an American: 2024 Guide

Switzerland, although not a member of the European Union, is part of the European Free Trade Association (EFTA) and maintains strong economic and political ties with the EU through various bilateral agreements.

It is known for its breathtaking landscapes, including the Swiss Alps, picturesque lakes, and well-preserved historic cities.

The country is divided into 26 cantons, which serve as the main administrative divisions and possess a high degree of autonomy.

Home to more than 8.7 million people as of 2024, Switzerland's rich cultural and geographic diversity make it an attractive destination for investors and explorers alike.

Population distribution across Switzerland's cantons

Why invest in Switzerland?

Switzerland's appeal lies not only in its natural beauty and high quality of life but also in its significant investment potential.

The country has over 1,500 lakes, alongside a generally mild climate throughout most of the year.

Switzerland is renowned for its stability and prosperity, consistently ranking among the wealthiest countries globally. Its strong economy is bolstered by sectors such as finance, pharmaceuticals, and technology.

In 2023, Switzerland welcomed a substantial number of international tourists, contributing significantly to its tourism industry and local economy.

American tourists alone accounted for around 3 million overnight stays, reflecting a significant growth compared to pre-pandemic levels. Overall, the total number of overnight stays by tourists in Switzerland was 20.8 million, showing a strong recovery and optimism for continued growth in the tourism sector in 2024 (source: SwissInfo).

After a period of fluctuation, the Swiss property market is stabilizing in 2024, with certain regions showing strong signs of growth. This stabilization is a positive indicator for investors, suggesting a recovering confidence in the real estate sector.

The rental market is experiencing a shift, influenced by increased demand in urban and resort areas. This trend is particularly relevant for investors looking at long-term leases in cities and popular tourist destinations.

There's a growing demand for energy-efficient and sustainable properties, driven by both environmental concerns and potential savings on utility costs. Properties that meet these criteria are becoming increasingly attractive to buyers and renters alike.

Average cost of buying property in Switzerland

While these figures provide a snapshot of the current market, property prices in Switzerland can vary significantly based on the exact location, property type, and market conditions.

You can easily track the latest trends and price evolutions on our dedicated page:

Switzerland's rich geographical diversity and cultural heritage mean you can choose from a wide array of regions and areas, each offering its own unique appeal and lifestyle.

Popular regions for investment and living

• Zurich: As the largest city in Switzerland, Zurich is known for its high quality of life, vibrant cultural scene, and strong economy. Property types range from modern apartments in the city center to luxurious homes in the suburbs.
• Geneva: Located by the stunning Lake Geneva and the French border, Geneva is a global city with numerous international organizations. It offers elegant apartments, lakeside villas, and townhouses in prestigious neighborhoods.
• Lucerne: Famous for its medieval architecture and beautiful lakeside setting, Lucerne attracts those looking for a mix of historical charm and modern amenities. Housing options include historic apartments and contemporary homes.
• Interlaken: Nestled between Lake Thun and Lake Brienz, Interlaken is a gateway to the Swiss Alps and a popular destination for adventure sports enthusiasts. Properties range from charming chalets to modern condos with mountain views.
• The Lake Geneva Region: Including cities like Lausanne and Montreux, this area is renowned for its beautiful scenery, vineyards, and cultural events. Properties range from waterfront apartments to luxury villas.
• The Valais Canton: Known for its ski resorts like Zermatt and Verbier, the Valais Canton is ideal for winter sports enthusiasts. Available properties include ski-in/ski-out chalets, holiday apartments, and luxury mountain homes.

The process of purchasing property in Switzerland as a foreigner is more complex compared to other countries, due to specific regulations and restrictions.

Foreigners typically need a permit to buy property in Switzerland. This applies to non-resident foreigners and residents from non-EU/EFTA countries. EU/EFTA residents living in Switzerland do not face these restrictions and can buy property without special permits.

The type of property is also relevant:

• Primary residence: Foreigners with a valid Swiss residence permit (B or C permit) can purchase property for their primary residence without restrictions.
• Secondary residence: Non-residents face strict limitations on buying secondary residences. The total number of permits issued annually is limited.
• Investment properties: Buying property for investment purposes is generally restricted for non-residents. However, commercial real estate (like hotels and businesses) may be allowed.

The Lex Koller law governs the acquisition of real estate by non-residents. This law limits the purchase of residential property by foreigners and is enforced strictly.

Certain regions, particularly tourist areas like Zurich, Geneva, and ski resorts, have additional restrictions and quotas on foreign property ownership.

Foreigners are also generally restricted to buying properties no larger than 1,000 square meters (10,763 feet) of land.

1. Obtain a Swiss Residence Permit

A Swiss residence permit is essential for any significant financial transaction in Switzerland, including buying property, setting up utility services, and filing taxes. There are several types of permits, with the B permit being the most common for foreign property buyers.

You can apply for a residence permit at the cantonal migration office where you intend to live. The application requires:

• a valid passport;
• a completed application form;
• a reason for requesting the permit (such as property purchase);
• proof of financial means;
• health insurance coverage.

The process can take from a few weeks to a couple of months.

2. Open a Swiss bank account

A local bank account is necessary for managing payments related to the property purchase, including the deposit, purchase price, taxes, and ongoing utility payments.

Most banks will require:

• your residence permit;
• passport;
• proof of employment or income;
• possibly a proof of address.

3. Start searching for properties

Explore online listings on Properstar to find properties for sale in your area of interest. You can leverage our advanced filters and even draw your preferred area on the map.

Consider hiring a real estate agent to gain better insights into the market and assistance in finding properties that meet your criteria and budget.

4. Find the right real estate agent

The right real estate agent can provide insights into the local market, assist in finding properties that meet your criteria, and navigate the negotiation process.

Here's how to ensure you pick the best professional for your needs:

• Local expertise: Look for agents with a deep understanding of the area you're interested in. They should be knowledgeable about local property trends, prices, and the unique aspects of the community.
• Language skills: If you're not fluent in one of Switzerland's official languages (German, French, Italian, or Romansh), finding an agent who can communicate effectively in your language is essential. They'll act as your liaison with sellers, lawyers, and other parties involved in the process.
• Experience and credentials: Check the agent's experience and qualifications. They should have a solid track record of assisting foreign buyers and be registered with a recognized real estate association in Switzerland.

You can utilize Properstar's agent search feature to find reputable local real estate agents. Our platform offers access to a wide network of professionals vetted for their expertise and reliability, making it easier to find someone who meets your specific needs.

5. Conduct property viewings

Visit potential properties to assess their condition, location, and suitability.

6. Legal checks and due diligence

The Land Registry (Grundbuchamt) is crucial to verify the property's legal status, ensuring it's free of debts, charges, or embargoes and that the seller holds the legal right to sell. This can be done by requesting an extract from the Land Register.

Ensure the property complies with local zoning and urban planning laws. This is particularly important for new builds or rural properties, where there might be restrictions.

Although not a legal requirement, it's highly recommended to conduct a property survey to check the physical condition of the property. This can uncover potential issues with the building's structure, utilities, or land.

7. Make an offer

With the help of your real estate agent, make an offer on the property. If accepted, you'll proceed to the contract stage.

8. Sign the preliminary contract (Vorverkaufsvertrag)

This preliminary agreement between buyer and seller (Vorverkaufsvertrag) secures the purchase and typically involves a deposit from the buyer (usually 10% of the purchase price). It specifies the sale's terms and conditions and commits both parties to the transaction.

If the buyer pulls out, they lose the deposit. If the seller pulls out, they must pay back double the deposit amount.

9. Finalize mortgage arrangements (if applicable)

Finalize the terms with your bank if you're financing the purchase through a mortgage.

10. Sign the deed of sale (Kaufvertrag)

The final step is signing the deed of sale (Kaufvertrag) before a notary, transferring ownership. The buyer must pay the remaining purchase price and all associated taxes and fees at this time.

Both parties must present their identification, the residence permit, proof of deposit payment, and any mortgage details, if applicable.

11. Register the property

After the deed is signed, the new owner must register the property at the local Land Registry. This step is essential for legal protection.

12. Pay associated taxes and fees

Buyers are responsible for paying property transfer tax and any additional notary and registry fees. Depending on the canton, the total cost can range from 3% to 5% of the purchase price.

Taxes for property purchases

Given the complexity of the process, it's advisable to hire a lawyer specialized in Swiss property law. They can handle legal checks, negotiations, and paperwork, ensuring your rights are protected throughout the purchase.

Some valuable resources for official information include:

• Swiss Federal Office for Migration: For information on residence permits and legal requirements for foreigners.
• Land Registry (Grundbuchamt): For checks on property legal status.
• Swiss Federal Tax Administration (FTA): For details on taxes related to property transactions.
• Swiss Notaries Association: Offers insights into the notary process and legal requirements.

13. Transfer utilities

Transfer utilities to your name and set up local services.

In Switzerland, there are several types of mortgages to consider:

Key considerations

• Financial stability: Ensure stable income and financial history to meet eligibility criteria.
• Down payment: Minimum 20% down payment required, with at least 10% from personal funds.
• Loan term: Consider the length of the mortgage term and how it aligns with your financial goals.
• Market conditions: Stay informed about market conditions and interest rate trends to make an informed decision.

Useful resources

• Swiss National Bank (SNB): For insights into mortgage interest rates and economic indicators.
• Swiss Financial Market Supervisory Authority (FINMA): For regulations and guidelines related to mortgages and financial services.

Purchasing property in Switzerland can be a rewarding investment, but there are several potential pitfalls to be aware of. Understanding these challenges can help you make informed decisions and avoid common mistakes.

1. Restrictions on foreign buyers

Switzerland has specific restrictions on property purchases by non-residents. The "Lex Koller" law limits foreign ownership of residential property, particularly in tourist areas. Non-residents may need special permits, and the process can be complicated.

2. High property prices

Switzerland is known for its high cost of living, and property prices reflect this. Real estate in popular cities like Zurich, Geneva, and Basel can be particularly expensive. Budgeting accurately and securing sufficient financing is crucial.

3. Additional costs and taxes

In addition to the purchase price, buyers must consider various additional costs:

• Property transfer tax: Varies by canton, generally between 1% and 3%.
• Notary and legal fees: Typically around 0.5% to 1%.
• Land registry fees: Approximately 0.3% to 0.5%.
• Annual property taxes: These can vary significantly depending on the location.

4. Mortgage constraints

Securing a mortgage in Switzerland can be challenging, especially for non-residents. Lenders may impose stricter conditions, require higher down payments, and offer less favorable terms. Understanding the mortgage market and getting pre-approval can mitigate some of these issues.

5. Language barriers

Switzerland has four official languages (German, French, Italian, and Romansh). Depending on the region, you may encounter language barriers when dealing with local authorities, real estate agents, and legal documents. Hiring a bilingual lawyer or agent can help navigate this challenge.

6. Property condition and maintenance

Some properties, especially older ones, may require significant maintenance and renovation. Conducting a thorough property survey is essential to identify potential issues and estimate repair costs.

7. Zoning and planning regulations

Swiss zoning laws and planning regulations can be stringent. Ensuring that the property complies with local zoning laws and understanding any restrictions on renovations or new constructions is vital.

8. Limited rental potential

If you plan to buy property for rental income, be aware that the Swiss rental market is highly regulated. Rent controls and tenant protections can impact profitability. Additionally, short-term rentals (e.g., Airbnb) may face local restrictions.

9. Currency risk

If you are financing the purchase in a currency other than Swiss Francs (CHF), exchange rate fluctuations can affect your mortgage repayments and overall investment. Consider hedging strategies to manage currency risk.

10. Lengthy bureaucratic processes

Swiss bureaucracy can be slow, particularly regarding property transactions and obtaining necessary permits. Patience and proper planning are essential to navigate these processes effectively.