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Cost of living: Which parts of Switzerland are actually cheap to live in?

Life in Switzerland is expensive, so finding a place to settle in according to your needs and financial possibilities is important.

Cost of living: Which parts of Switzerland are actually cheap to live in?
Cost of childcare can be high in Switzerland. Photo by cottonbro on Pexels

Some guidance about this issue is provided in a new Credit Suisse study, which lists five factors that help choose residence in terms of affordability.

This is part of wider Credit Suisse research released this week assessing the cost of living in various Swiss cantons.

It found that Appenzell Innerrhoden has the lowest cost of living for the average household, followed by Uri and Glarus. Next are Schaffhausen, Jura, Appenzell Ausserrhoden, Valais and Thurgau.

On the other hand, Geneva has the highest cost of living, followed by Basel-City, Vaud, Zurich, Basel-Country, Zug, and Neuchâtel.

READ MORE: Cost of living: The most – and least – expensive cantons in Switzerland

So what are the five decisive factors to consider in search of a home?


“Income and wealth taxes add up to nearly 12 percent of a person’s average gross income, accounting for one of the biggest portions of household spending”,  Credit Suisse economists said, basing their finding on the Household Budget Survey of the Swiss Federal Statistical Office for the period 2015–2017.

And since cantons are in charge of taxes, there are significant regional differences in this regard.

Credit Suisse’s 2020 cantonal tax burden ranking lists Zug as the most attractive canton, tax-wise.

Next are Nidwalden and Uri. On the other hand, tax rates are well above average in French-speaking parts of the country, except in in Geneva.

And taxes vary even within the cantons, with some municipalities imposing lower rates than others.

Cost of housing

Housing is another major expense for Swiss households, sometimes accounting for about one-tenth of the family budget, according to the Household Budget Survey for 2015–2017. The burden is even higher for low-income families.

Cost of single-family homes vary according to regions, with housing costs being higher in metropolitan areas and low-tax regions than in rural areas.

However, Credit Suisse found that due to low mortgage interest rates, the monthly cost of owning a home has been lower than renting a comparable property.

READ MORE: How Covid-19 changed housing priorities in Switzerland

Commuting expenses

This is an important factor because nearly 70 percent of Switzerland’s labour force works outside their town of residence, and just under 20 percent cross the border on their way to and from work.

More than half of commuters drive to work, while about a third use public transportation.

As expenses for commuting to and from work can be partially deducted from from taxable income, some people accept longer commutes. Depending on the canton of residence and the distance they have to travel to work, commuters can deduct over 30,000 francs in expenses,  Credit Suisse said.

“Motor vehicle taxes also differ from canton to canton. Many cantons impose lower tax rates on electric cars – or even grant their owners complete exemptions”, the study reported.

Health insurance

For many people and families this constitutes one of the major expenses.

“Health insurance premiums are one of the biggest non-discretionary expenses paid by households. Rising life expectancy and greater prosperity have led to a continuous increase in this budget item in recent years”, Credit Suisse economists noted.

Here too, the cost varies depending on the place of residence and these regional differences can be significant.

For instance, an adult in Appenzell Innerrhoden (Switzerland’s cheapest canton in terms of the overall cost of living) will pay a premium that is over 3,000 francs lower than in Basel-City, one of the most expensive regions.

 Also, the differences in premiums and disparities in individual premium discounts “result in sharp regional contrasts in net premiums, especially for low-income households”, according to the study.

Childcare costs and family allowances

For working parents, childcare services often represent a major expense, depending on the family’s income and whether or not they are entitled to subsidies. Here also there are differences between regions in the fees charged by childcare facilities and the subsidies offered by cantons and municipalities.

The family-specific tax deductions, childcare costs and child allowances vary from canton to canton.

While some cantons adhere to the minimum rates required by Swiss federal law —at least 200 francs a month for each child — others grant higher allowances.

“When all parameters are taken into account, Valais has the highest level of attractiveness for families from a financial standpoint”, Credit Suisse concluded.

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For members


Switzerland: How to get money back when cross-border shopping in Germany

Crossing into Germany to go shopping is usually cheaper - and that’s before you add the tax savings. Here’s how you can claim back tax when shopping in Germany.

Switzerland: How to get money back when cross-border shopping in Germany

There are a range of reasons why most things are cheaper in Germany than in Switzerland. 

While there are some exceptions to this – the most notable one being petrol – generally speaking you pay a premium on goods purchased in Switzerland. 

EXPLAINED: Why is Switzerland so expensive?

If you shop in Germany, you can also save on VAT, which is generally 19 percent and added to most goods. 

Here’s what you need to know. 

What are the tax rules for shopping in Germany? 

Residents of Switzerland, as a non-EU country, do not need to pay VAT in Germany on purchases over 50 euros. 

Your country of residence rather than nationality is important here. 

Therefore, a German living in Switzerland and shopping in Germany does not need to pay the tax. 

A Swiss living in Germany however would need to pay the amount. 

Importantly, you need to physically be in Germany when you make the purchase. 

In order to qualify for the tax exemption, you must bring the goods back to Switzerland with you. 

The specific rules for this are laid out by German Customs here, but they need to be either in your carry on or checked baggage, or in a car that you are travelling in personally. 

These rules are to ensure people are buying the goods for themselves rather than intending to sell them on. 

What kind of goods? 

Goods bought in Germany and taken back to Switzerland are exempt from VAT. 

You will generally however be required to pay tax on services rendered or completed in Germany. 

For instance, bus or train tickets in Germany, restaurant bills, hotel stays, massages etc. 

There are also a range of rules which apply to vehicles. 

If you are getting your car repaired, filling up with petrol, affixing bumpers, mirrors or other additions or even getting a car wash, you will need to pay VAT. 

How do I get the money back? 

Unfortunately, you do not get a discount at the place of purchase.

Instead, you need to claim the money back after you have purchased the product on which you paid the tax. 

In most large stores or shopping centres, you will be able to do this on site. 

You need to have a copy of the receipt and fill in the VAT refund form (Ausfuhrschein) with your name, address and Swiss residency permit number. 

You can get one of these forms at larger stores or you can download it and print it here. 

You will need to do one for each invoice. 

Once you have done that, you can take the completed form to the German customs office (Zoll), which you can find at most border crossings and get the paper stamped. 

Then, you need to return the paper to the place of purchase, where they will issue with a refund of the VAT. 

Some stores require you to return after three months, some six and some 12, so be sure to check the store policy. 

Note that some online stores will automatically deduct the VAT if you have a Swiss delivery address. 

Cost of living in Switzerland: How to save money if you live in Zurich

One thing to keep in mind however is that Switzerland charges its own VAT, which is either 2.5 percent or 8 percent. More on that below. 

What’s with all this paper? 

For anyone who’s spent even a few hours in Germany, the country’s reluctance to embrace digital methods of payment and record keeping is clear. 

While cash remains king in many stores and restaurants, claiming back money from shopping in Germany is also a paper-heavy endeavour. 

Fortunately for people not so keen on paperwork, a change is afoot – although exactly when it will take place remains unclear. 

In February 2022, the German government announced it had kicked off a project to make a digital export certificate possible. 

In addition to saving time and paper, the government indicated it expected to save around 6.2 million euros in personnel expenses as around 100 customs officers are currently assigned to the Swiss border alone. 

No deadline has been given for when the change will come into effect. 

Cost of living: How to save on groceries in Switzerland

Swiss customs rules

When bringing goods into Switzerland, you will need to pay VAT if the amount exceeds 300 francs. 

While border patrols are rare, those who make a habit of exceeding this amount – even if it is for goods for personal use – run the risk of falling foul of the authorities. 

There are several different rules in place for bringing in different items, including meats, cheeses and alcohol. 

The limits for each of these items can be found here. 

Keep in mind that while the CHF300 applies now, Switzerland is set to reduce this to CHF50 in the future – although final approval of this has not yet been secured. 

Tax change: Switzerland to introduce 50 franc limit on cross-border shopping