The Property Banks Buyers Guide to Switzerland
In order to purchase property in
Switzerland, a series of straightforward steps need to be completed.
The legal paperwork will be handled by the notary who in most cases
works on behalf of both the developer and the buyer; this is common
practice in Switzerland and simplifies many tedious operations (n.b.
He or She is appointed to protect the interests of both parties).
If you are not in possession of a “B” or “C” permit and are not
planning to apply for one, you’re allowed to reside in your property
for a maximum of 180 days per year with a 3 month maximum term per
stay. Your property is also subject to a square meterage limitation
of between 200m2 and 250m2 according to the circumstances, you
cannot own more than one property in Switzerland and can only
purchase in certain areas.
Should you wish to apply for residency, whether you wish to work or
not, or enquire regarding tax laws, Alpine Homes International can
introduce you to a renowned Financial and Tax Consultancy.
Permit “B”
A “B” permit (permis de séjour) is an annual residence permit. It
allows you to spend 180 days or more in Switzerland per year. The
“B” permit also entitles the holder’s spouse and children under 18
to live with the permit beneficiary (for EC citizens there is a more
flexible version of the “B” permit which gives more rights to the
beneficiary).
Permit “C”
A “C” permit is a permanent residency permit. Depending on your
citizenship, the “C” permit is obtainable after 5 or 10 years of
residence with a “B” permit, it has fewer restrictions and gives the
beneficiary similar privileges to those of a Swiss national in terms
of property purchase, etc.
The process for a foreign buyer
The first step is signing the “Contrat de Vente” (sales contract) or
“Promesse de vente” (Promise of sale equivalent to Sales
acceptance), this can be done in front of the Swiss notary or a
Power of Attorney can be signed before a notary in the UK. Generally
approximately 1/3 of the purchase funds need to be transferred to
the notary at this time. The buyer is then requested to sign a
“Declaration sur l’honneur” (A document legally certifying that the
buyer does not own any other property in Switzerland).
Following the completion of these two points, the notary then puts
together a dossier for your permit application including site plans,
floor plans, square meterage etc all countersigned by the architect.
This dossier is then sent to the legal department of the Land
Register. A certificate is then issued confirming that the dossier
is complete and that all the prerequisites for the permit are
fulfilled.
The buyer must then wait for the permit, the waiting time is
variable; a quota of permits is delivered per year, per canton and
per commune and the governing bodies convene periodically thus
making an exact estimate difficult. During this time, the buyer must
make the agreed payments.
Once the certificate has been issued (prior to the permit), the
notary is then entitled to release the funds received from the buyer
to the developers’ bank. The developers’ bank then transfers the
funds to the developer according to a certain
construction/completion schedule – there is therefore a second
entity involved with the transfer of funds and the follow-up of the
build. The property acquisition becomes official when the owner’s
name appears/is registered in the land registry.
Costs
The average cost for the legal procedure including the Notary Fees,
Land register and Permit applications differs from canton to canton.
Currently in Canton Valais these fees amount to approximately 2.5%
purchase price whilst as in Canton Vaud, they are of approximately
4.8%.
Taxes
We suggest that you seek legal advice from tax experts regarding the
Swiss taxation system as rates vary according to the canton and the
commune in which you are purchasing, and the status you will have as
a property owner (resident or non-resident).
We have more information available on taxation, and we can recommend
you some relevant tax experts.