Buying property as a foreigner: What you need to know about purchasing a home
Purchasing real estate in Switzerland when you are a foreigner – is that even possible? Yes, depending on your citizenship and residence permit. From purchase authorization to mortgage applications for foreigners – what individuals with foreign nationality need to know about purchasing real estate in this country.
Buying property as a foreigner: Check whether you need authorization
Many people living in Switzerland dream of having their own home. To realize that dream, however, they first need to fight their way through a jungle of forms, procedures, and regulations. Foreign citizens also need to examine whether they require authorization before they can buy real estate.
That is because authorization is not mandatory for all foreigners, and it depends on the person's nationality and the type of residence permit they possess. The reason for requiring purchase authorization is to protect Swiss land. Its purpose is to prevent Swiss land intended for building from being owned by foreign entities.
Buying property as a foreigner: Who is required to have authorization?
Individuals who are citizens of EU/EFTA member states have the same right to purchase real estate as Swiss citizens. Therefore, they do not need additional authorization to buy a property or land.
Non-EU/EFTA nationals with Residence Permit B
Individuals living in Switzerland who are not citizens of the EU/EFTA require authorization to purchase the following:
- Second homes that cannot be rented out.
- Vacation homes that can be temporarily rented out.
- Rooms in apartment hotels.
By contrast, if the property serves as the primary residence or if the person is purchasing building land, then he or she does not require authorization if the following criteria are met:
- The property will serve as the primary residence and will not be rented out.
- The person possesses a valid residence permit.
- Purchase and the start of construction on the property take place in the same year.
Individuals with a permanent residence permit (Permit C)
Those who possess Permit C have the same right to purchase real estate as Swiss citizens. Therefore, they do not need additional authorization to buy a property or land.
Cross-border commuters (Permit G)
Cross-border commuters who are EU/EFTA citizens are entitled to purchase a second home in the vicinity of their place of work without needing authorization. However, they are prohibited from renting out their second home.
Non-EU/EFTA citizens (not domiciled in Switzerland)
Whenever non-EU/EFTA nationals are not cross-border commuters, they are required to have authorization in order to purchase real estate or building land.
Buying property as a foreigner: Cantonal authorities as the point of contact for authorization
The cantonal authorities in the city or town where the property or piece of land is located are responsible for granting purchase authorization.
Those who require authorization or those who wish to check they need authorization just to be on the safe side should first contact the respective local cantonal authority (p. 13 et seq.). Whether authorization is granted depends on the respective canton and the type of property.
If the application is approved, the next step is to obtain financing. In this area, the conditions for issuing loans to individuals with Permits B, C, and G do not differ significantly from those for Swiss citizens. Another prerequisite is that the person must have regular income and sufficient creditworthiness. Besides having already resided in the country for a minimum of six months, as required by banks and other financial institutions, there are other requirements. They differ depending on the residence permit:
Mortgages for foreigners: Mandatory requirements
|Permit C||Permit B||Permit L||Permit G|
|The same preconditions to which Swiss citizens are subject apply||✓||✓||✓||✓|
|Minimum age of 18||✓||✓||✓||✓|
|Minimum income of CHF 2,600||✓||✓||✓||✓|
|Proof of gainful employment either as independent businessperson or paid employee||✓||✓||✓||✓|
|No open garnishments or certificates of shortfall||✓||✓||✓||✓|
|Appropriate residence permit for at least…||-||6 months||12 months||3 years|
|Employed in Switzerland for at least…||-||3 months||12 months||No minimum length of employment|
Restrictions on vacation homes and second homes
Switzerland has currently imposed a limit of 1,500 per year on the number of vacation homes and units in apartment hotels that can be sold to foreign individuals. In Geneva and Zurich, sales are even prohibited altogether. Foreigners who do not live in Switzerland must demonstrate very close ties to the city or town in which a property is located in order to purchase a second home there. In addition, the following criteria must be met:
- The area where the apartment is located is popular with tourists.
- The share of second homes in the city/town is less than 20%.
- The net living area does not exceed 200 m2.
- The area covered by the building land does not exceed 1,000 m2.
- Vacation homes: temporary renting permitted.
- Second homes: no renting permitted.
- Maximum ownership limited to one vacation home or second home in Switzerland.