Buying real estate in Switzerland: nuances and restrictions for foreigners

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There are restrictions on the purchase of real estate in Switzerland, which apply to a number of popular locations, including ski resorts and picturesque towns such as Montreux, Lugano and Iverdon-les-Bains. Yverdon-les-Bains. The rules established by the Lex Koller law regulate the sale of real estate to foreign citizens through an annual quota system that applies to each tourist region of the country. These quotas determine the maximum number and size of real estate properties that can be purchased by foreigners. Quota holders have the right to transfer them when selling a property, which simplifies the process for subsequent buyers. Usually the existing quotas are sufficient to meet the demand from foreigners, and sometimes they are not even fully utilized. However, if the quotas are exhausted, potential buyers are forced to wait until the following year to make a purchase. In recent years, demand for Swiss real estate has been declining due to the high value of the Swiss franc. Swiss franc, but the current depreciation of the Swiss franc is attracting renewed interest from buyers.

The law passed in 2012 imposes restrictions on the construction of new "second" residences in municipalities where they make up more than 20% of the total number of housing units. This has a direct impact on foreign buyers, who often seek such second residences. In popular resort areas, a significant portion of the real estate is used for vacation purposes, which contributes to the introduction of restrictions to reduce the number of unused properties. These restrictions are also aimed at preventing speculation in prestigious and sought-after areas. According to the legislation, foreigners can own only one property per family, and upon reaching adulthood, their children can purchase real estate in their own name.

Foreign buyers are offered apartments and houses with an area of up to 200-250 square meters, depending on specific conditions. These restrictions are in place to maintain balance in the real estate market and to protect the interests of both local residents and potential investors.

Buying real estate in Switzerland: legal aspects

Owning real estate in Switzerland is associated with prestige and financial benefits; however, the purchase comes with many legal nuances. For example, the area of the property being purchased cannot exceed 1,000 square meters, and the owner and their family are allowed to reside in this "second home" for no more than 6 months a year.

Usage restrictions

• Real estate for vacation or temporary residence can only be purchased in an individual's name.
• Renting out such property for a period longer than 11 months is prohibited by law.
• The sale of real estate within 5 years without a valid reason is also restricted.

Investment opportunities for foreign investors

Foreign investors wishing to purchase real estate in Switzerland have several investment opportunities that can help them obtain a residence permit. One of the most common options is a fixed tax treaty with the cantonal authorities. The minimum amounts vary from canton to canton.

• Examples of minimum tax amounts:
• A EU citizen choosing the canton of Vaud will have to pay between 150,000 and 180,000 Swiss francs per year.
• For citizens of other countries, including Russia, this amount rises to 420,000 francs.
• In Geneva, the tax for non-EU residents ranges from 500,000 to 550,000 francs, in Valais it is 180,000 francs, and in Ticino it ranges from 150,000 to 180,000 francs.

Additional aspects

It should also be noted that when reselling real estate, it can be purchased by the municipality if it remains vacant for a long time. Owning property in Switzerland is not only a reliable and promising way to invest, but also an opportunity to obtain a residence permit in a country with a high standard of living.

These legal aspects are mandatory for all foreign buyers. Despite the strict regulations, the Swiss real estate market remains attractive to investors seeking a stable and reliable investment for their funds. The combination of a high standard of living, political stability, and unique opportunities for obtaining residency makes purchasing property in this country particularly enticing.

Choice of canton

When a foreign citizen decides to settle in Switzerland, they face a number of important choices. One of the most significant is the choice of canton based on tax policy. Each canton has unique tax rates that apply to the income of a foreign resident after they establish themselves there. This choice directly affects the applicant's overall tax obligations, as they will need to reside in the selected region.

Investments in projects

However, taxes are not the only thing that matters to foreign investors. Investments in projects at the cantonal level represent a significant opportunity. These can include various projects, such as the construction or modernization of ski lifts, factories, or manufacturing facilities. Making decisions about such investments requires careful analysis and assessment of financial risks, which is why expert consultations are essential.

Starting a business

Starting your own business in Switzerland is another option for foreign investors. However, opening a company requires not only a significant financial investment but also a plan for creating new jobs and contributing to the economy of the canton. This process begins with submitting a complete set of documents to the canton’s economic development department, including a detailed analysis of the business sector, the volume of investments, and the expected social impact.

Company sponsorship

Another option for foreign applicants is to sponsor a new company to obtain a Swiss residence permit. In this case, the applicant is obliged not only to pay taxes in Switzerland but also to declare income and assets worldwide, complying with all local tax and legal requirements.

Decision on obtaining permission

The decision to obtain a Swiss residence permit is a complex process that requires consideration of many factors. Each individual case is unique and requires a tailored approach, taking into account the specifics of the business, the amount of investment, and the expected impact on the economy of the canton.

Read briefly about the main points in the article:

Purchasing real estate in Switzerland is a dream for many foreigners due to the high quality of life in Switzerland. high standard of living, beautiful nature, developed infrastructure, reliable banking system and famous mountain resorts. resorts. However, there are restrictions for foreigners, including limited quotas for buying real estate in some regions. real estate in some regions. In this article we will tell you about the intricacies of buying real estate in Switzerland and restrictions for foreign investors.

Existing restrictions for foreigners:

Non-citizens of Switzerland are allowed to own only one property unit for a family consisting of a husband, wife, and minor child. A foreign buyer is entitled to purchase either an apartment or a detached house with a living area of no more than 200 square meters (in some cases up to 250 square meters). Quotas for property acquisition are issued based on annual restrictions, and the demand from foreigners for real estate in tourist areas is usually met by the available quotas.

Existing restrictions for foreigners:

• Non-residents can only acquire real estate based on annual quotas.
• Quotas are issued for each tourist region of Switzerland.
• Non-residents may purchase housing with an area of no more than 200 sq.m.
• In a number of key areas in Switzerland, it is impossible to buy property without having a residence permit.

Important point:

Before purchasing property in Switzerland, it is important to thoroughly study all aspects of the process, follow the recommendations of specialists, and be prepared to comply with all existing requirements and restrictions. The main recommendation for anyone considering buying real estate in Switzerland and/or obtaining a residence permit in this beautiful alpine country is to seek professional advice and further assistance from a reliable real estate agency that specializes in Swiss property sales and can help you clearly define your investment direction.