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Eight reasons why buying a Swiss home is easier than you think

With its breathtaking Alpine views, fine chocolate, and high GDP per capita, life for expats in Switzerland must be good, right? Well, up to a point.

Eight reasons why buying a Swiss home is easier than you think
Photo: Getty

It certainly attracts plenty of new arrivals with around a quarter of the working-age population being foreign nationals. But expats are often shocked by the cost of living. You won’t find many of them living in a Swiss castle. 

But is buying any property just too expensive or complex to contemplate? The Local has partnered with Hyppo.CH, which offers full mortgage assessments and advisory reports in English, to present eight reasons why buying a home in Switzerland could be easier than you think. 

1. Negative interest rates

“When they go low, we go high,” is Michelle Obama’s catchphrase. The Swiss National Bank could go with “When they go low, we go lower.”

We’re talking about interest rates, of course, not moral standards. Many developed countries have had historically low interest rates since the 2008 financial crisis. 

But Switzerland still stands out: it has had negative rates for more than five years and the current rate is minus 0.75 percent. As a result, ten-year fixed rate mortgage deals start at under one per cent – and even lower for five-year fixed deals.

Find out what you can afford and get a personal report in English from Hyppo.CH

2. Long-term loans

In some countries, a mortgage is considered a millstone and a loan lasting 25 or 30 years can seem like forever. But in Switzerland, it’s common for mortgages to last 50 to 100 years. 

Yes, your mortgage could easily outlive you. Spreading the costs over such a period helps keep monthly repayments lower. You might even pass the mortgage on to your kids, which is not unusual for the Swiss. 

3. Dividing up your deposit

To buy, you’ll probably need to pay a deposit of at least 20 percent of the property’s market value. That’s much lower than in neighbouring Germany but still a hefty sum.

Bear in mind, however, that in Switzerland, only 10 percent must be put down in cash and the rest can be made through your company or personal pension fund. Expats who have been in the country long enough to start building up a pension may qualify. 

When considering this option, you should carefully consider your circumstances and taking advice from a professional financial adviser is recommended – failing to keep up mortgage repayments could put your pension and your home at risk.

But it’s an important part of the Swiss way and your hosts are hardly renowned for being reckless with money, are they?

Think owning your own home is a distant dream? Find out now if you can afford more than you think

4. A country life (with quick commuter links)

So, it’s not only the castle overlooking the lake you can’t afford. Perhaps you’ve found a flashy city apartment might also prove out of reach.

Photo: Getty

How about a picturesque place in the countryside with some real Alpine air? The historic town of Olten, for example, is a rail hub, lying within 30 minutes of Zurich, Bern, Basel and Lucerne.

Commuters travelling into Zurich from all directions use S-bahn trains and a public transport network that’s the envy of many bigger world cities. Fares may not be cheap but a monthly or annual pass can also be used on trams, buses and ferry services. 

5. Get an expat assessment in English

Getting a Swiss mortgage can be a little more complicated for expats. In most cases, you’ll need a B residence permit – which lasts for up to five years – or a C settlement permit.

Even if you have your permit and are looking to stay long-term, you might be put off by the thought of trying to understand the system in a language you haven’t fully mastered.

With Hyppo.CH, you can do your mortgage assessment and get an advisory report in English – all with no commitment. Your personal report will save you time by setting out: 

  • Exactly what you can afford
  • Your options based on your residency status
  • Any hidden costs
  • Whether you qualify to buy
  • Easy-to-follow visual guides 

6. Tax deductible mortgage interest

Homeowners in Switzerland must pay income tax on their property’s rental value – the money they would receive if they rented it out. It may sound strange to expats but the idea is that homeowners have certain advantages over tenants, so the tax is intended to make things fairer. 

But it’s vital to know that mortgage interest payments are fully tax deductible, while other upkeep costs are partly deductible. This makes buying with a mortgage more affordable – along with the fact you’re no longer paying monthly rent.

Tired of your monthly outgoings on rent? Find out now if you qualify to buy

7. Stamp duty may not apply 

As with many things in Switzerland, the cantonal system leads to a complex patchwork picture on property purchase taxes. While most cantons do charge stamp duty, there are six that don’t but instead charge change of ownership and registration fees: Aargau, Glarus, Schaffhausen, Uri, Zug and Zurich.

Colourful homes in Zurich. Photo credit: Getty 

In the canton of Schwyz, there is no property transfer tax at all. Where you do have to pay stamp duty, the amount also varies by region: it’s negligible in some places but 3 percent in Geneva. 

In short, buying in certain regions offers significant tax savings. It would be wise to get professional advice, such as that offered by Hyppo.CH’s personal reports.

8. Lucky 13 

Are you one of the Swiss workers for whom there are 13 months in the year – or rather 13 pay checks? Sounds like something to yodel about – especially if you’re hunting for a new home. 

Applying for a mortgage based on your annual salary rather than what you receive in a normal month could help to bring the home you want within your price bracket.

Interested in buying in Switzerland but unsure where to start? With historically low interest rates and the quirks of the system, you may be able to afford more than you think. Get a full assessment and personal report from Hyppo.CH – in English and with no commitment.

 
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PROPERTY

Checklist: What documents do I need for an apartment in Switzerland?

Looking for a flat? You need to have your documents in order. Here’s what you need to know.

Checklist: What documents do I need for an apartment in Switzerland?

Finding a flat in Switzerland is incredibly competitive, even if you are not looking in the larger metropolises of Zurich and Geneva. 

Landlords will often get hundreds of applications for each flat offer. 

One way to get ahead is to make sure you have your documents in order early – in many cases even before you see the apartment in question. 

While this will sometimes lead to some unnecessary printing, you will ensure your completed documentation is on top of the landlord’s pile when the big decision has to be made. 

If you aren’t handing the documents in in person, put them all together in one PDF file when you send it over to make it easier for the landlord to read. 

Here are some of the important documents you will need to find a flat in Switzerland. 

Overview

There are two broad categories of documents you need to move into a flat in Switzerland: the need to haves and the nice to haves, although things are so competitive these days that many of the nice to haves are getting a little more essential. 

The need to haves include identification, application form and residence permit (if you don’t have a Swiss passport). 

The nice to haves are a cover letter, freedom from debt statement, employment information, references from employers and from previous landlords and additional information about the nature of your employment, i.e. a contract showing the duration of your employment. 

All of the documents should be provided in the language of the canton in which you apply. Often it will be no problem to apply in English, particularly in larger cities, however an application in the local language will always be looked upon positively. 

Finally, while the following is a guide as to the commonly requested and required documents in Switzerland, it does vary from place to place. 

Sometimes you will need to register with a particular property company, for instance, or provide other specifics related to the accommodation, i.e. student accommodation. 

Landlords are however restricted from asking certain questions, including those related to health. More info on this is available below. 

Renting in Switzerland: The questions your landlord can and cannot ask you

Identification

This one is relatively self-explanatory, as not even the most trusting landlord is likely to allow you to move in without proof of who you are. 

For foreigners, a passport is likely to be required, although your Swiss identity card will also suffice. 

Application form

The application form is the centrepiece of your request, so be sure to include it. 

It will guide you through the process, showing you which information you need to provide and generally what the landlord considers necessary. 

Generally speaking application forms will be available online, or at the very least will be available at the apartment viewing. 

If you can, fill it out online and hand it in at the viewing – it will put you ahead of the competition. 

Employment status 

Generally, your application will ask for your profession and for your employer. 

They will also ask for a salary estimate and sometimes proof of salary, or at least a ballpark figure of what you earn. 

Real estate agencies tend to run by the loose rule that your rent should not be more than a third of your wage, so keep that in mind when applying. 

Residence permit

As we outlined here, landlords cannot as you about your nationality or other potentially associated characteristics such as religion or race, but they are permitted to ask for proof of your residency status. 

Specifically, a landlord is allowed to ask whether you are Swiss or not and to provide details of your citizenship or residency details, i.e. which type of permit you have to live in Switzerland. 

Again, while this may appear to be a personal question and may result in discrimination, landlords will want to know you have a right to live in Switzerland and are therefore likely to stick around for the long(ish) term. 

Freedom from debt statement 

There are two statements here – a general certificate saying you are not in debt (from organisations like CRIF, ZEK, IKO or Bisnode) and one which highlights you are not in debt to your previous landlord. 

Generally speaking, neither of these are required in Switzerland, although you will be making your life more difficult if you don’t provide them. 

In Germany and Austria, landlords will often ask for a Mietschuldenfreiheitsbescheinigung (pronounced meat-shool-den-fry-height-bee-shine-ee-goong). 

Switzerland loves paperwork. Photo: Christa Dodoo on Unsplash.

Switzerland loves paperwork. Photo: Christa Dodoo on Unsplash.

Literally translating as rent-debt-freedom-certificate, the Mietschuldenfreiheitsbescheinigung is a document which confirms you are not in rental debt for your previous properties. 

Keep in mind that in Switzerland the previous landlord is under no obligation to provide this certificate – and a tenant is also under no obligation to show it. 

Tenant or landlord: Who pays which costs in Switzerland?

However, as with everything in this list, such a certificate is likely to help convince a landlord that a tenant is trustworthy. 

A landlord looking at two identical applications is likely to decide in favour of the tenant who has provided a Mietschuldenfreiheitsbescheinigung rather than the tenant who hasn’t. 

If your landlord will not provide you with one – or asks for a large sum of money to get it – you can provide this information to your prospective landlord. 

Generally speaking you should not be charged more than 20 francs for such a statement. 

Cover letter

A cover letter will usually not be a requirement, however it is perhaps the best chance you have to explain a little about yourself, why you want to live in the region (and in the specific flat) and what your long-term goals are. 

Generally speaking you will not get to meet the landlord personally (unless its a private rental), so the cover letter is your best chance to give an indication as to who you really are. 

When writing a cover letter, be sure not to simply repeat the information on your application form – use it to tell a story about yourself and why you are captivated by the flat (remember that landlords will be able to smell a generic cover letter a mile away). 

Like resumes, cover letters in Switzerland generally include photos. 

Recommendation letters

Recommend letter of recommendation from your former landlord or from your employer are definitely in the nice to have category and may not be looked at at all, however a landlord may be swayed by the positive opinion of a previous landlord. 

Renting in Switzerland: Can a landlord ask if I am vaccinated? 

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