Switzerland is an extremely beautiful country. The Alps is the most outstanding natural attraction in Europe and no section of the mountain range is as beautiful as the Swiss Alps. In the Alpine valleys, you will find some pastoral views that can take your breath away.
Moving to Switzerland would be a good idea for political and economic reasons too. The country boasts the following important advantages:
— The political situation is highly stable in the country.
— The economy of Switzerland is one of the strongest economies in the world. There is no inflation in the country (at times, the inflation can be 1% but not more). The unemployment rate is very low at about 3% even though the figure varies from one year to another.
— The banking system is advanced in Switzerland: about one tenth of the world’s capital is kept in the country. Zurich and Geneva are among the largest financial centers of the world.
— Mortgage rates are low at about 3%.
— The living standards are extremely high. Bern, Geneva, and Zurich are regularly listed among the cities with the highest quality of life.
— Property prices constantly grow. The grown rates can be different in different years but they are usually about 3% per year.
Residential accommodations in Switzerland: restrictions for foreigners
Switzerland does not have very much livable land: 70% of its territory is covered by mountains. For this reason, there are serious restrictions for foreign nationals wishing to purchase residential accommodations in Switzerland. There is a special law of 1983 officially called Bundesgesetz über den Erwerb von Grundstücken durch Personen im Ausland and usually referred to as the Lex Koller after Arnold Koller, the then-Prime Minister of Switzerland.
In accordance with the law, foreigners are not completely disallowed to purchase residential property in Switzerland. They can do so if they hold permanent residence permits, for example. Besides, some Swiss cantons (even though not all of them) issue yearly permits (quotas) to foreigners who want to buy residential property in their territories. A canton can issue a few dozen permits per year but their total number cannot exceed 1,500 in the entire Switzerland. As far as land plots are concerned, a foreigner also needs to obtain a special permit to buy one in the country.
A piece of property can be registered in the name of a foreign company but only if its controlling interest belongs to a Swiss company or Swiss residents. Moreover, a foreigner cannot own more than 33% of the company.
There are exceptions, however. For example, foreigners can freely buy property in the Andermatt Swiss Alps residential complex (Andermatt is a town in the canton of Uri). The complex consists of several 5- and 4-star hotels with around 500 rooms plus several villas. No permit is required if you would like to buy property there even if you are a foreign national. If you would like to invest into real property in Switzerland without any restrictions, you can find more options by following the link.
The matter is that there are no restrictions for foreigners investing into commercial property in Switzerland. They can freely buy shops, offices, manufacturing facilities, hotels, and so on.
Rent in Switzerland
Most people rent residential accommodations in Switzerland. This is not surprising because the price of property is high in the country. For example, the cost of 1 square meter of residential property exceeds 15,000 Swiss francs in Geneva and it exceeds 16,000 francs in Zurich.
Rental prices are also rather high. For example, renting an 85-square-meter apartment in Zurich would cost you more than 2,500 Swiss francs per month. But then again, it is the most expensive city in Switzerland: prices are more democratic in other places.
Apartments for rent are normally unfurnished in Switzerland even though kitchens are fully equipped in most cases.
Rental prices are kept in rein in Switzerland and the tenant can sue the property owner if the latter charges too high a price. There are joint associations of tenants and rental property owners in many Swiss cantons such as Valais, Vaud, Geneva, Neuchâtel, Fribourg, and Uri.
Rental income is taxed. The rates depend on the canton where the property is located. The lowest corporate tax rates are in the cantons of Nidwalden and Lucerne (10.6% on average), Obwalden (11.1%), Schwyz (11.6%) and Zug (12.8%), while the highest rates are in the cantons of Basel-Stadt (20.2%) and Geneva (21.4%). As for personal income taxes, the lowest rates are in the cantons of Zug, Schwyz and Obwalden (23-24%) and the highest ones are in Geneva (almost 45%).
Investors often take out mortgages. They are able to earn more from renting the property out that they have to pay to the bank in interest.
Commercial property in Switzerland: no restrictions for foreigners
Experts recommend that you invest in commercial property in Switzerland. There are several reasons for that:
— Foreigners can buy commercial property in Switzerland without applying for any permits;
— Commercial property brings higher profits in comparison to residential property;
— Commercial property can be sold at any time while residential property can be sold only after 5 years (the taxes are going to be extremely high if you do it before the 5-year period expires).
The Swiss real estate market is known for its stability and predictability. Price fluctuations are small. You would not be able to make a fortune by buying and selling real property in Switzerland. An investment in Swiss real estate is a secure investment first and foremost but it is not a very profitable one.
According to statistics, more than half of the entire office space in Switzerland is found in Geneva and Zurich. Some office space is also found in Basel, Bern, and Lausanne. This means that you will be well-advised to consider the first two cities on the list if you would like to buy office space in Switzerland. The demand for office space is very high in Zurich and Geneva and the tenants pay on time. We have to note, however, that the profitability of commercial property is a little bit lower in Zurich than it is in other Swiss cities. On the other hand, if you purchased a store in a busy street in Zurich, you could rent it out at thousands and thousands of Swiss francs per square meter per year.