As The Local has reported previously, renting is far more popular in Switzerland than buying.
In fact, Switzerland is the only country in Europe where more people rent than own the home they live in.
READ MORE: Why do so many Swiss prefer to rent rather than buy their own home?
That may still be the case, but rising rents are pushing many people to consider whether buying a house or apartment is right for them.
Obviously the major cost you’ll face is the property itself, but other fees such as legal costs, agent fees, taxes and the like can make the purchase a lot more expensive than you might otherwise think.
First things first, have a think about whether or not buying a home is right for you.
The following link has some helpful info on that topic.
Buying property versus renting in Switzerland: What is actually cheaper
On the whole, buyers are likely to be liable for additional costs of up to four percent, while sellers may have to pay up to six percent.
Here are some of the hidden costs of buying a home in Switzerland.
Notary costs
While this can seem like a lot of money for just a signature or a stamp, notaries do play an important role in ensuring everything is conducted legally and deterring fraud.
Some notary costs are also a legal requirement, so you can’t get out of paying the fees.
Notary costs are standard in most property purchase agreements, however what is somewhat unique in Switzerland is that buyers and sellers will often split notary costs.
The degree to which this takes place will depend on the canton, so check the notary in your canton or municipality for more information.
Notary fees will set you back anywhere up to one percent of the purchase price.
Notary fees are higher in French and Italian-speaking Switzerland and tend to be lower in German-speaking Switzerland, other than Bern.
Deposit
Before you even begin thinking about buying a home, you need to know that higher deposits are required in Switzerland than many other countries.
The minimum deposit in Switzerland is around a fifth (20 percent) of the total purchase cost.
This is much higher than the five percent often seen in English-speaking countries, but it’s much lower than the 40 percent sometimes required in Germany.
While you might have just felt your home ownership dreams disappear with a whoosh, only half of that money should come in cash.
The other half can come out of your pension fund - although if you’ve only recently arrived in Switzerland, you might not have that much cash stashed in there.
READ MORE: Can foreigners buy property in Switzerland?
Mortgage costs
Unless you’re one of the few people with enough francs in the bank just to buy a home outright, you’ll need to get a mortgage in order to buy a house in Switzerland (check out the previous point on deposits for an indication of how much of the purchase price you’ll be liable for).
Keep in mind that while mortgage rates tend to be lower in Switzerland, the repayment periods are longer.
So while the longest you might pay your mortgage in other countries is 30 years, Swiss mortgages lasting between 50 and 100 years can be relatively common.
You’ll also need to pay a ‘mortgage registration fee’.
Eigenmietwert/Property rent value
For many arrivals from abroad, this can be a bit of a surprise, but the Eigenmietwert is a tax figure you should consider if buying a property.
Whether you are buying for an investment or not, you might need to calculate the Eigenmietwert figure, which is a theoretical rent value for the property.
While it will depend on a range of different things that your tax advisor or accountant is better placed to discuss, the Eigenmietwert fee will at least partially be offset by deductions, but it’s worth knowing about when you are considering buying.
Perhaps unsurprisingly, the Eigenmietwert is unpopular among many people. Politicians have pushed legislation to call for its removal for decades - including as recently as September 2021 - but it remains remarkably hard to kill.
Architect or engineering costs
Another add on for buyers - which in most cases is optional - is to have the property appraised by an architect or civil engineer in order to see if there are any faults or problems that may not be visible to the naked eye.
At around CHF1,000 per appraisal, these can seem a little on the steep side - but will be far cheaper than if you uncover a defect after having bought the property.
Capital gains
Capital gains tax will be due when a property exchanges hands in Switzerland, although keep in mind that this is the seller’s responsibility.
You can also deduct a range of expenses from the capital gains tax, including many of the costs in this list.
Land registry fees
You’ll also be liable to pay a fee for registering the property in the land registry office.
This will usually be between one and 1.5 percent of the purchase price.
As with almost everything on this list, whether the buyer, the seller or a combination of both are liable will depend on the canton.
In the most cases, the buyer will be liable.
Property transfer tax
When ownership of property is transferred, a property transfer tax is levied.
In some cantons, these are known as ‘change of registration’ costs, but the idea of the tax is largely the same.
(These are different to the fees for registering the deed with the registry office, even if they’re called ‘registration’ fees in some cantons).
This is due in 25 of 26 cantons, with Schwyz being the lucky exception.
By and large this cost must be paid by the buyer, although in some cantons the seller will be liable.
Historical buildings
Switzerland has a strong respect for tradition and history - and this comes through in housing.
Around 75,000 properties in Switzerland are listed buildings, which have some form of historical or cultural significance and are as a result protected by law.
This is known in German as Denkmalschutz, in French as protection du patrimoine and in Italian as protezione del patrimonio.
This additional protection can result in tax deductions for owners, however the rules may restrict you from certain modifications or renovations, which can be frustrating.
Agency fees
Buying a home through an agency is often a way to make things run a little more smoothly - and is particularly popular among foreigners.
Even if you do much of the looking yourself online, the listed properties will often have agent fees attached.
If you are buying through an agent, this will likely cost you somewhere between two and three percent of the purchase price.
As with any of our explainer articles, this report is intended as a guide only and should not take the place of legal advice. This is not an exhaustive list of all costs associated with buying a home.
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