Attempting to purchase a home in Switzerland can be a daunting task, more so if you are a foreigner that has decided to relocate to the country. This does not mean that it is impossible for expats to buy their homes in the country. It simply means that you are going to need all the help that you can get in order to achieve this goal.
The following tips from Cosmos Values Real Estate can help make the entire process much smoother and much faster for you.
Before investing your time and energies into finding a Swiss property to buy, you need to ensure that you are committed to this cause.
Expats are usually advised to spend at least five years in the country before they embark on purchasing the home. This recommendation helps to guarantee that the individual intends to stay in the country long-term. In addition, buying a home in the country is not a viable investment if you are not looking to stay in the house for an extended period of time.
After you have located the house you would like to purchase, there are still several more steps that you have to complete. First on the list is budgeting for the entire process, which will include the buying of the house, as well as transfer fees and other related fees and taxes.
It is advisable to budget for at least 5% of the cost of the home as payment for all related fees and taxes. You should note that the property transfer fee usually varies from property to property, commune to commune, and from canton to canton. In some areas, this transfer tax can be as high as 3% of the total value of the cost of the property.
While budgeting for the property, you should also consider prospective service charges for shared amenities, which is quite common in Switzerland. If you live in an apartment, you might be required to pay an annual service fee for shared areas including maintenance of the lifts, shared pool, and parking areas. The same norm applies to detached properties where you might be required to pay for maintenance of private roads, and private car parks.
The usual rate for annual maintenance charges for apartments is around 1% of the cost of the apartment.
When shopping around from canton to canton looking for property, be sure to enquire about the taxation rates in the jurisdiction. This will have an effect on the related taxes that you will have to pay in order to finally purchase the house.
- Getting a mortgage
After you make a budget, the next step is to get a mortgage from a Swiss bank. How much you get from the lender will determine the size of the offer you can make to the seller of the house. Typically, the Swiss lender will consider the current value of the property, as well as your financial history when deciding on whether to give you the mortgage or not. You will be required to pay 20% of the property value as deposit, 10% of which must be in cash.
Once you get the mortgage, you can then proceed to make an offer for the house to the owner.
- Making the offer
Now, you can communicate your offer to the seller based on how much the lender has given you. You can communicate to the owner either directly, or through your estate agent. If the offer is accepted, then you will be required to pay a deposit, which will then be held in escrow by a notary. Your mortgage lender should also be in the know when the offer goes through so that it can certify to the notary that there is a payment plan in place.