The Christmas and New Year break is a popular time to take a skiing holiday and Switzerland still remains a favourite destination due to its abundance of beautiful resorts and perfect climate. Therefore, frequent visitors to Switzerland and investors may consider buying a property to use as either a holiday home, or to gain some rental income.
Switzerland has one of the most stable economies in the world and its strict buying restrictions mean the property market remains a safe investment. However, foreigners may find their options limited when looking to purchase a property as the Swiss government control the number of properties available to non-residents which is then divided up between the different Cantons.
Non-residents will find it much easier to buy a property in the popular tourist areas where potential rental income is high and lending is currently available in the Cantons of Geneva, Vaud and Valais. Lending in other Cantons is currently done on a case-by-case basis.
Mortgages are available for a maximum term of 25 years with 80% loan to value and interest rates are currently between 2.30% -2.50%, all in Swiss Francs only. If the loan amount is over £1 million then loans in other currencies may be available, but these are then restricted to between 50% and 60% loan to value.
Once you have found a property the first step is to sign an agreement “a Promesse de Vente” and pay the agreed deposit. The buyer then has to be granted permission to purchase which can take up to eight weeks and this time of year it could take up to three months, especially if the annual quota of properties available to non-residents has been used up.
It is worth noting that sometimes the permission granted to the buyer could come with strict conditions on the use of the property. These could include the buyer, or their family, having to use the property for a minimum amount of time each year as well as restrictions on letting.
When purchasing a property in Switzerland it is important to hire a Swiss Public Notary who will help you apply for the correct residency permits and ensure that the contract is accurate to protect the interests of both the purchaser and vendor.
This article was first published on Prime Location here: http://blog.primelocation.com/2013/12/30/buying-overseas-in-switzerland/