Chalets, apartments, and houses in Switzerland cost a lot. As a whole, Switzerland is a pretty expensive country. It's a wealthy nation, after all. It makes sense that if you want to own anything, you'll need to reach deep into your pocket. Of course, that includes real estate! If you want to buy a property in Switzerland
, you'll need to invest a lot of money. And if you're going to do that, expect to encounter a few legal issues along the way. There's the issue regarding your residency status, for instance, and how it can affect your eligibility to purchase and own real estate in Switzerland. You ought to know about this and more!
Can Foreigners Buy Real Estate in Switzerland?
Technically speaking, foreigners can, in fact, purchase real estate in Switzerland legally. But you will have to face some restrictions. It's only if you're a citizen of an EU/EEA country or you've gotten the Swiss C permit can you buy any place in Switzerland freely. If you call into any of these categories, you get the same rights as citizens. If not, and you remain a foreign non-resident, you will need to apply for a license to purchase from the canton. Do take note that the criteria and conditions needed to get the license differ from canton to canton, such as if you're moving to Zürich
, Bern/e, Uri, and the like.
What are The Ownership Structures in Switzerland?
According to the International Comparative Legal Guides
, there are four main types of property ownership structures in Switzerland. The first is full ownership which retains all rights of the property to the listed owner on the title deed. The second is co-ownership, the structure that equally divided the rights between two or more listed owners. Owning a condominium also falls under this structure. Third, there's the building right, which allows anyone to build a structure on land even if it's not their own property. And finally, the fourth is the usufructuary right. Through this, a person can use the property however they want even when the owner is someone else.
What is The Buyer's Due Diligence?
Once you decide to buy real estate in Switzerland, you'll need to do your due diligence. One part of that is checking the legal state of the property. If the seller is not the listed owner of the property on the title deed, then the purchase can't push through. You'll need to get that fixed if you want to move forward. More often than not, it's your notary who'll have to check this. Moreover, you'd do well to check the current state of the property too. This can be done by conducting surveys. Although this practice is uncommon in Switzerland, it will help you in the long run.
Do You Need to Check The Land Register?
In relation to your due diligence, know that you are allowed to obtain important information regarding any property from the Land Register. This includes the name and description of the real estate, the name and identity of its (current) owner, the form of ownership and the date they acquired it, the mortgage/s still attached to the property, and other notifications. Since doing your due diligence is also following the country's real estate laws, then the Land Register nor the owner has no right to keep this information from you, no matter which canton they come from.
What Does The 'Duty to Act in Good Faith' Mean?
As you do your due diligence, you can also ask the seller questions about the state of the property. And in this regard, the seller is obliged to tell you everything you need to know. This is under the Swiss Code of Obligation, wherein the seller has the 'duty to act in good faith
' when it comes to disclosing information. Though they're not required to be 100% truthful, it's in their own interest to be. Why? Because the moment you, as the new owner, discover any defects to the property after the purchase that the seller did not inform you about, they will still be liable for it.
What Do You Need To Know About Signing The Contract?
Perhaps the most legally-binding document in the entire process is the sale & purchase contract. Once you sign this, you'll be legally required to follow through with the purchase. As the buyer, you'll also be required to pay around a 10% to 20% deposit. If you ever decide to bow out of the agreement after signing, then you won't see that deposit ever again. On the other hand, if the seller decides to bow out of the agreement after signing, then they'll have to pay you double the amount of the deposit that you initially paid them.
Since buying real estate in Swizterland is a big investment, it's only natural that the process comes with a few legal issues. Learn them before you start working on the purchase so that you can ensure that nothing goes wrong!