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Reader question: Does buying a home make financial sense in Switzerland?

Switzerland has the lowest home ownership rate in Europe. Does it make sense to buy a house or apartment?

A small wooden house on the grass
Does it make sense to buy property in Switzerland? Image: Pixabay

Less than 50 percent of Swiss residents own their home, making it the only country in Europe where more than half of the country rents. 

The reasons for this are many and varied, from high house prices to a large foreign population who live in the country on a medium-term basis. 

But for those who are thinking of buying a home in Switzerland – whether on a short or long-term basis, or as an investment – there are several questions to answer. 

Here’s an overview of the biggest issues and questions you should consider when thinking of buying a home in Switzerland. 

Do Swiss really prefer to rent than buy?

Approximately 59 percent of Swiss people rent – making it the highest percentage of renters anywhere in Europe. 

One misnomer in considering renting and buying is that in many cases people in Switzerland and other parts of Europe where rental rates are higher is that they “prefer” to rent. 

Successive studies have shown that high numbers – i.e. above 80 percent – of people would prefer to own their own home rather than rent. 

The high percentage of renters is instead probably more accurately described as people being ‘content to rent’, rather than actually preferring it.

Another factor is the number of foreigners who are only in Switzerland for the medium term. 

Around one quarter of the Swiss resident population is foreign. 

While it is difficult to determine how many of those do not see themselves staying long term, Switzerland’s strong employment sector and difficult naturalisation processes often act as a barrier to settling. 

COMPARE: Which European countries have the toughest rules for gaining citizenship?

With buying a home seen as a major sign of a long-term commitment, it is clear that this plays a role. 

Is buying a home in Switzerland a good decision?

Whether buying a home in Switzerland or anywhere is right for you will depend on your specific circumstances. 

One surprise for new arrivals – particularly those from English speaking countries – is the strength of tenants rights protection laws in Switzerland. 

In Switzerland, tenants are typically given long-term leases with significant permission to change and alter aspects of the house or apartment. 

There are also restrictions on rent increases in some parts of the country. 

READ MORE: What are The Local Switzerland’s reader questions?

Tax is another factor which can discourage people from purchasing a home. 

Despite its reputation, Switzerland’s income tax rates are not as high as some might expect. Other taxes are however quite high in comparison – and contribute to the Swiss being more content to rent than people in other countries. 

Some cantons allow rent to be deducted from tax, while cantons also provide subsidies for renters in some situations. 

Researchers Bourassa and Hoesli write that “income tax rules in Switzerland seem less favourable to home ownership” than those in the United States and elsewhere. 

This sometimes amounts to a high percentage of the overall cost (i.e. as high as 3.4 percent in Geneva). 

Swiss home owners on the other hand are often hit with taxes, including income tax, property tax and capital gains tax. 

Several Swiss cantons also levy a wealth tax, which disproportionately hits home owners. 

Will anything change in the future? 

One important factor to consider is whether you are buying a home purely as an investment, or whether you intend to live there. 

A consequence of the stronger tenancy laws and lower rates of home ownership is that property becomes a less attractive option for investors, which in turn means fewer properties are built. 

But while Switzerland may not be a property investor paradise, buying a home can still be a good investment in comparison to renting, as investing is not the sole purpose of the purchase. 

Recent interest rate rises haven’t quelled rising demand for properties, nor has the impact of the pandemic. 

Speaking with Swiss news organisation Tamedia, property expert Patrick Schnorf said demand is set to continue. 

“We assume that due to immigration, high birth rates and household divisions, demand will remain the same in the near future,” Schnorf said. 

“People have saved a lot (during the Covid pandemic), many have a secure income, these are the driving factors.”

In fact, the Covid pandemic has not dampened demand, but has channeled it towards a different type of property. 

Larger properties with more rooms and gardens have seen greater demand as a consequence of lockdowns and working from home requirements 

“The radius of the real estate search has therefore also extended to the surrounding rural regions,” explained Schnorf.

READ MORE: What does the coronavirus mean for Switzerland’s property market?

While lockdowns look to be over and the working from home rules have come to an end, experts argue that some of these changes are more than mere trends and are likely to be permanent.

Think we’ve missed something? Got something to add? Have you bought a place in Switzerland or are you thinking about it? Get in touch at [email protected].

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For members


What you need to know when taking your clothes off in Switzerland

As you know by now, the Swiss have laws and regulations for pretty much everything — ranging from how to throw away your garbage to how to boil a lobster. But what about nudity? Here's the bare truth.

What you need to know when taking your clothes off in Switzerland

The weather is getting warmer and you may want to shed as much of your clothing as you legally can. But how much skin can you safely bare in Switzerland?

You may be surprised to learn that Switzerland’s, um, penal code does not ban public nudity — as long as it is not indecent.

Interestingly though, the term “indecent” is not clearly defined in the Swiss law, so it is open to interpretation.

Be it as it may, the subject was widely reported in the media in 2009, when residents of Appenzell Innerrhoden complained about people hiking in their mountains, wearing nothing but backpacks and hiking boots.

Their concern had nothing to do with the fact that unclothed hikers took to the mountains in the middle of a cold Alpine winter.

Rather, they disliked that the walkers passed families with children and a Christian rehabilitation facility. 

The case eventually ended up before the cantonal court, which ruled that people should cover up when walking in public places. However, this ruling applies only in Appenzell, not in the rest of the country.

Another example of the liberal attitude that reigns in much of Switzerland regarding nudity has been the Body and Freedom Festival that took place regularly in August in various Swiss cities until 2018.

The festival exposed —  literally — actors performing in the buff in the midst of crowded city streets.

During one such event that took place in Bienne, local officials not only authorised the performance, but also contributed $20,000 of public funds to it.

The only condition they made was that, for safety reasons, naked performers stay clear of traffic, so drivers wouldn’t be distracted.

READ MORE: Naked artists cause stir with Zurich street performances

What about topless bathing in public?

This practice is much more common than walking in the nude (after all, how many naked hikers have you encountered on mountain trails?)

Nothing in the federal law addresses the issue of toplessness; cantons don’t have such legislation either, leaving final decisions in this matter to individual municipalities.

It is perhaps incorrect to say that the vast majority of communes in Switzerland actually authorise topless sunbathing and swimming, but they don’t ban it either.

In fact, there is currently a motion in the parliament (because apparently MPs are not busy enough with more pressing matters) urging Swiss officials to allow toplessness on public beaches.

“Such a topless rule is absolutely necessary in Switzerland”, said Social Democratic MP Tamara Funiciello.  “Women should be able to walk around, swim, and sunbathe as they please”.

Helena Trachsel, head of the Equal Opportunities Office in the canton of Zurich, also believes that toplessness makes sense: “From an equal opportunities perspective, it is clear that the same rules apply to all genders, including women and non-binary people”, she said.

However, Martin Enz, managing director of the Association of Indoor and Outdoor Pools sees no need for action: “If a person discreetly drops their bikini top and does not show off, this is accepted in most outdoor pools. The problem tends to be men who gape”, he noted.

So when and where can you take your clothes off in Switzerland?

What is clear is that you definitely should not walk around naked anywhere in Appenzell.

As far as other cantons and or /municipalities are concerned — whether you want to hike naked in the mountains or swim topless — it’s best to check with your local authorities about what is and is not permitted in your area before you leave your house buck naked.

READ MORE: The 12 strange laws in Switzerland you need to know