Majority of the people in Switzerland rent their accommodation with only about 40% of the population actually owning their homes. This phenomenon can be explained by the fact that Switzerland is a small country that is well endowed with mountains, and these two aspects limit the size of land available for housing. Even with this consideration in mind, many foreign investors view the Swiss real estate market as a favourable investment owing to the high returns one can accrue.
Hence, it is not surprising to find a number of foreigners that have relocated to the country are looking to get into the Swiss real estate market every year. Furthermore, with companies such as Cosmos Values real estate to hold their hand and guide them through the process, foreigners and locals alike are finding it much easier to purchase homes in the country as part of their investment portfolio.
However, there are a few things you need to consider before going ahead to purchase real estate in this country.
- Effective domicile
For starters, you need to demonstrate effective domicile, otherwise referred to as legal residency in order for you to be considered eligible to own a piece of Swiss real estate. Effective domicile means that this is the country you have chosen as your home, that you spend considerable amount of your non-work hours here, that you have strong familial and communal ties, and that you have personal relationships here.
Usually, you should only plan to purchase a home here if you have lived or intend to live in the country for more than six years. This is the only way that this investment can prove worthwhile to you as a foreigner living in the country.
- Taxation
Property ownership in Switzerland is subject to taxation, just like in any other country. Hence, be prepared to pay taxes for your property.
You should also note that the amount of taxes you pay for your property will depend on the neighbourhood where it is located. Some neighbourhoods attract higher taxes than others, and the amount of tax levied in the neighbourhood should be a big consideration when looking for property to buy in Switzerland.
The community of residence as well as the canton will determine how much tax you pay for your property.
In order to navigate this issue effectively, it is imperative that you hire a tax advisor who will guide you comprehensively before you actually make the purchase.
- Neighbourhoods
As discussed in the above second point, where you stay or choose to purchase a home has a direct impact on how much you pay as tax. Obviously, more people would prefer buying a home in a neighbourhood where the taxes are lower but not at the expense of some integral amenities.
You will find that some neighbourhoods are more preferable than others because they have access to some of the best schools in the country as well as proximity to the best mountain and lake views.
However, it is imperative to note that there are no bad neighbourhoods in the country.
- Types of houses
In Switzerland, you will have to get used to small houses whether you are buying a property or simply renting an apartment. Houses with four bedrooms or more are quite unusual, as most houses are designed with small available space in mind. However, the space is usually moderately comfortable for most families.
If you want a bigger home, then look for the ones with large basements under the house. You can transform this space into an additional room if you feel that you need more space. Most houses are well maintained, and if you are looking for a detached house, then it is best you search for one in the outskirts of the major cities.