How does the property purchase process work in Switzerland?

The process in detail: step by step to your own home

1. The financial basis: preparation is everything

Many people believe that buying property in Switzerland begins with a search on Homegate or ImmoScout24. This is a fallacy. The first step in buying property in Switzerland is to take stock of your finances.

Before you start viewing properties, you need to know what you can afford. Buying property in Switzerland requires you to contribute at least 20 per cent equity.

• Own funds: At least 10 per cent must be "hard" funds (savings, pillar 3a), the remaining 10 per cent may come from your pension fund.
• Affordability: Your housing costs must not exceed one third of your gross income.

Without a financing certificate from the bank, you have little chance of buying property in Switzerland, as sellers want security. Clarify this basis before you start buying property in Switzerland.

2. Property search and inspection

The market for buying property in Switzerland has dried up. Good properties are snapped up quickly. Once you have found a property, the due diligence process begins. When buying property in Switzerland, the rule is usually "sold as seen". Therefore, check the building fabric, the GEAK (energy performance certificate) and – in the case of condominiums – the renovation fund. An undiscovered defect can turn buying property in Switzerland into a financial nightmare afterwards.

3. Reservation and deposit

Have you found your dream property? Then the next step in the process of buying property in Switzerland is usually the reservation. You sign a reservation agreement and make a deposit (often between 10,000 and 30,000 Swiss francs).

Important: From a strictly legal point of view, such a contract is not binding when buying property in Switzerland without notarisation. It is a "gentlemen's agreement". When buying property in Switzerland, make sure that the deposit is paid into a blocked account held by the solicitor or estate agent and not directly to the seller. This way, your money is secure if the property purchase in Switzerland falls through.

4. Finalise the financing

In parallel with the reservation, you must secure the final financing for the property purchase in Switzerland. The bank will re-evaluate the property. If the value matches the purchase price, you will receive an "irrevocable promise to pay".

This document is the fuel for the property purchase in Switzerland. Without a promise to pay, no solicitor will set a date for the property purchase in Switzerland. At this stage, compare mortgage models (Saron vs. fixed-rate mortgage) to make the property purchase in Switzerland affordable in the long term.

5. The draft purchase agreement

Now it's time to get formal. The notary draws up the draft contract for the property purchase in Switzerland. The contract regulates the price, payment terms, easements and the condition of the property.

Read the draft contract for the property purchase in Switzerland carefully.

• Who pays the property gains tax?
• Are there any rights of way?
• How are the notary fees shared? Reviewing this draft is one of the most important steps in buying property in Switzerland. Clarify any open questions before the notarisation appointment so as not to jeopardise the property purchase in Switzerland.

6. Public notarisation (the notary appointment)

This is the heart of the property purchase in Switzerland. The buyer, seller and notary meet to sign the contract. The notary reads the contract aloud and both parties sign it.

With the notarisation, the property purchase in Switzerland is contractually sealed ("binding transaction"). You have committed to pay, and the seller has committed to deliver. But beware: this step in the property purchase process in Switzerland does not yet make you the owner!

7. Transfer of ownership and land registry entry

Buying property in Switzerland distinguishes between obligation and disposal. Only when the entry is made in the land registry ("transaction in rem") are you officially the owner. Often, notarisation and transfer of ownership when buying property in Switzerland take place at different times (e.g. in the case of new buildings).

The notary registers the change of ownership with the land registry office. At the same time, your bank transfers the money. This completes the legal part of the property purchase in Switzerland.

8. Don't forget the additional purchase costs

One aspect that is often underestimated when buying property in Switzerland is the additional costs. These are incurred in addition to the purchase price and are usually not financed by the bank. When buying property in Switzerland, you will incur:

• Transfer tax (0 to 3.3%, depending on the canton)
• Notary fees (approx. 0.1 to 0.5%)
• Land registry fees
• Mortgage note fees

Plan for an additional flat rate of 3 to 5 per cent of the purchase price when buying property in Switzerland. If you forget these costs when buying property in Switzerland, you risk financing gaps.

9. Key handover (benefit and risk)

The emotional conclusion to buying property in Switzerland is the handover. Legally, "benefit and risk" are transferred to you. From now on, you benefit from the value, but also bear the risk. It is essential to draw up a handover report. This completes the operational purchase of property in Switzerland.

Special provisions for newcomers (Lex Koller)

Special rules apply to foreigners when buying property in Switzerland ("Lex Koller").

• EU/EFTA with residence in Switzerland: treated the same as Swiss citizens when buying property in Switzerland.
• Third countries: Purchasing property in Switzerland is usually possible without a permit for your main residence, but holiday homes are heavily regulated. Find out about permit requirements early on so as not to delay your property purchase in Switzerland.

Conclusion

Buying property in Switzerland is a highly formalised but secure process. It requires solid financial preparation and patience with the administrative steps. From the financing certificate to the notary to the land registry, each step in the process of buying property in Switzerland logically builds on the previous one.

Never underestimate the additional costs and affordability rules that characterise buying property in Switzerland. If you are well informed and know the rules of the game, buying property in Switzerland will be the start of a secure future.

Let Loft support you in making your path to home ownership efficient and secure.

Glossary

• Buying property in Switzerland: The entire process of acquiring real estate in Switzerland, characterised by strict financing rules and the requirement to use a notary.
• Public notarisation: A mandatory step in buying property in Switzerland, in which the purchase agreement is certified by a notary.
• Promissory note: An irrevocable guarantee from the bank that the purchase price will be paid. Without this document, no notarisation can take place when buying property in Switzerland.
• Transfer tax: A cantonal tax that is often levied when purchasing property in Switzerland and is included in the incidental purchase costs.
• Mortgage note: A security to secure the mortgage. Its creation is one of the typical costs involved in buying property in Switzerland.