Real Estate Switzerland – A Complete Guide from A-Z 2018
The sale or lease of a property can be greatly facilitated with the assistance of a professional real estate agent. He gets the most out of the property and usually scores higher prices than a private sale.
Real estate: What is it?
The definitions given to it are numerous, however, they all mean the same thing. Real estate is a term used to refer to any immovable property. This term also refers to all transaction and management activities carried out on real estate. Its scope is so extensive that it affects a large number of activities among which there is architecture, urban planning, construction, stewardship, housing, etc. To this end, it is an activity that can not do without the right and knowledge in finance.
The real estate market is governed by the law of supply and demand in real estate, allowing a price fixing of real estate assets – in the context of a free market without excessive regulation or regulation.
If the real estate supply is too strong then a fall in prices can be observed – deflation -. If the real estate supply is too weak – so very strong demand – then a speculative real estate bubble may appear. Both cases can create a phenomenon of crisis and crash in real estate .
What are the activities developed and observed in a real estate market?
There are economic agents making purchases, sales, rentals, real estate management and rentals on so-called residential properties – houses, apartments, buildings – or professionals – commercial premises, offices, real estate business , industrial buildings , etc.-.
Importance of a real estate broker
Selling a home or a home is the biggest financial transaction of a lifetime for many people. And the divestiture process is very complex and often involves a series of pitfalls that cost not only a lot of time, but money as well. If you take a few tips, nothing stands in the way of a successful business with a broker and you put your property search into competent hands. Experience and market knowledge are decisive criteria in order to be able to find the desired property for the customer.
What services do brokers provide?
• Arranging the purchase, sale and exchange of developed and undeveloped real estate, apartments, business premises, prefabricated houses and businesses (and corporate interests)
• Arranging of existing contracts (rental and leasing contracts) for real estate and companies
• Arranging rights to real estate
• Authorization to trade in real estate and to arrange mortgage loans
• market analysis
• Creation of meaningful exposés
• Application in Internet portals and print media
• credit checks
• Carrying out of purchase surveys
Real Estate in Switzerland
Real estate agent is not a regulated or licensed profession in Switzerland. Therefore, the most important features of a good broker are professionalism, salesmanship and integrity. Professional brokers are often part of larger professional networks or corporate organizations. It may therefore be worthwhile to check the estate agent in this regard. The Swiss Brokers Chamber (SMK) acts as a professional association.
Who is allowed to buy a property in Switzerland?
The “Federal Law on the Acquisition of Property by Persons Abroad” (BewG) – popularly known as “Lex Koller” – regulates who may buy a property as a foreigner in Switzerland.
What is the process of purchasing real estate in Switzerland?
If the real estate acquisition is approved, the purchase in Switzerland is similar to that in Germany: the contract partners clarify their conditions, and the notary sets up the purchase contract. Both parties review the contract again, then he is notarized and signed by the notary. Following the purchase price must be paid and the new owner is entered in the land register. Only then is the purchase officially sealed.
The purchase contract must normally contain the following components:
• cadastral plan
• Suspected contaminated sites Cadastre
• Information about the property, such as building plans, building specifications or building insurance policy
• Building regulations and zone plan
• control value
• Financial information and estimate
• Private law agreements
In order to make no mistake when buying real estate, buyers should inform themselves in advance: “In cantonal regulations, the land registry of the cantons continues to help,” says Erb. “Or the buyer turns to a local real estate agent or lawyer, who must be familiar with the cantonal regulations.”
What additional costs are due when buying property in Switzerland?
The amount of the incidental purchase costs of a property can vary from canton to canton. They usually range between five and ten percent of the purchase price:
• Brokerage commission : In practice, between one to five percent of the purchase price is customary. In accordance with the Swiss Code of Obligations, this principle is paid by the client.
• Notary : These costs vary depending on the canton or even municipality. In Zurich, for example, 0.1 percent of the purchase price, in Bern 0.5 percent. As a rule, buyers and sellers share the costs in half.
• Land register entry : Again, the costs vary from canton to canton, and how they are set up. They are usually shared between buyer and seller.
• Change of hand : In some cantons, a change of hand tax is charged instead of or in addition to the land register fee. The amount varies depending on the canton.
• Real estate transfer tax : This is due in most cantons and is between one and four percent of the purchase price, or the official tax value.
After the purchase, the costs do not end yet: The annual property tax – called property tax in Switzerland – amounts to depending on the canton of 0.5 to two percent of the official tax value of the property. Certain cantons, such as Zurich, Schwyz or Aargau, however, refrain from levying the tax. In addition, further taxes may be due. Anyone who buys a property in Switzerland should seek the advice of a tax expert on site, which special features he should consider. It is also advisable to seek legal advice from a specialist lawyer.
When is a real estate valuation needed
Knowing the value of a property is especially necessary when the property changes hands. This is the case with the purchase and sale, but also with divorce proceedings, division of assets, building conflicts or even foreclosures.
Buy and sell
Often real estate is valued before buying or selling. The real estate value determination serves as a decision aid and as a guideline for determining the selling price. It is a hedge for both parties, so that the property is not bought or sold above or below value.
After a divorce, there is often a gain compensation, in which the profit generated within the marriage period is divided equally between both spouses. Since acquired real estate as well as the existing assets of both parties are included in the profit adjustment, the determination of their value is indispensable.
Inheritance and donations
For tax purposes, the transfer of real estate as well as donations requires the property to be valued. If the heir lives in the inherited flats for at least ten years, the state runs out of funds. In this period, however, he may not sell, rent or lease the property. However, there is the restriction that in children the living space may not exceed 200 square meters. If the apartment or the house is not used, the inherited property must be taxed. Property that is rented for residential purposes as a result of the inheritance is calculated in the estate tax determination only with 90 percent of the market value. The allowance is based on the market value of the property and the degree of relatedness.
Custody and guardianship
In addition, in custody matters, when the Guardianship Court takes over the sale of a dependent owner, an opinion on the market value of the house is often obtained. Thus, the court makes sure to get the best out of the care taker.
Extension of mortgages
Another reason to evaluate a property is the extension of mortgages. For example, if the interest rate fixed on a loan expires after about ten years, then it can be negotiated with the bank on the basis of an opinion on improved financing conditions. Banks usually determine the real estate value when financing. However, according to the majority legal opinion, they can not charge any fees for this. Especially with direct banks and the big intermediaries of mortgage loans, it has been customary for years to pay the valuation itself. However, individual banks, especially house banks, require the borrower to commission the property valuation himself at his own expense. Whether this practice will be approved by courts in the future, is open.
Real estate investment, like any investment, has a percentage of risk and it is possible that the property suffers a devaluation. However, we can foresee these risk factors in some way and sell the property ahead of schedule to avoid future risks. An ideal benefit is to get up to 30% more than what we pay in 3 years of investment.