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Old 27.05.2007, 13:07
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Residential and Commercial property investment in Switzerland

I wondered if anyone here had experience of buying and owning property investments here. I already own an own occupied apartment, but I would like to buy another couple for investment. Are there any restrictions on B permit holders buying? Also, where is the market place for Swiss commercial property to be found?

I have quite a bit of experience in UK and German property investment so am not a novice, but I have found it very difficult to find listings here - Homegate has a few multi-family houses but no commercial for example - it feels like I am just not looking in the right places?
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Old 27.05.2007, 14:25
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Re: Residential and Commercial property investment in Switzerland

remax is quite a big one - they have a commercial section
http://www.remax.ch/PubScripts/Inter...s=Com&Lang=ENU
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Old 27.05.2007, 14:36
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Re: Residential and Commercial property investment in Switzerland

Just looking on google there are examples like
http://www.switzerland-4you.com/secure-investment.htm
What exactly to you want to do - buy an apartment block and let this out, or convert a building first? I looked into converting old farmhouses into flats - seemed interesting, but the paper work and legal issues detered me. I just bought and renovated a house for myself.
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Old 27.05.2007, 20:28
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Re: Residential and Commercial property investment in Switzerland

Hi Felix, have sent you a pm. Interesting thread for me.
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Old 28.05.2007, 20:18
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Re: Residential and Commercial property investment in Switzerland

Hi, unfortunately I don't know anything about whether there are restrictions on B permit holders, but I may be able to put you onto some people who are selling property, investing, building etc.
What type of commercial & residential real estate are you exactly interested in? Multi-family houses, single apartments or houses, comm. buildings? Would you build as well or prefer just to purchase and are there any particular areas you wish to buy in?
I would have contacts for you in & around Luzern, Adligenswil, Dierikon, Root.... etc.
PM me anytime if you would like more info.
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Old 28.05.2007, 21:37
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Re: Residential and Commercial property investment in Switzerland

Hi,
we are thinking of doing something similar eg. buying small apartment block /farm to do up and sell on/?rent. or new build.is this posssible on a B permit? what pitfalls / legal probs has anyone come across.
jo
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Old 29.05.2007, 11:09
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Re: Residential and Commercial property investment in Switzerland

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Hi,
we are thinking of doing something similar eg. buying small apartment block /farm to do up and sell on/?rent. or new build.is this posssible on a B permit? what pitfalls / legal probs has anyone come across.
jo
Hi Jo,

As a B permit holder you need to be an EU holder to do this. The concept of buy and do up is negated by the extremely high tax charged on any profit. It will only work if you buy it do it up and then buy another with the money AND you are registered as living in them both ie it is your abode. Or alternatively you can form a company to do it... Tax on profits made through selling a house are ridiculous...

Would be good to get an idea on how many are interested in this idea. I know someone looking for investment for property portfolios. Someone who is far from being an idiot that is (which counts me out then...)
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Old 29.05.2007, 13:55
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Re: Residential and Commercial property investment in Switzerland

Hi,
my other half is looking at setting up a company to do this.He is a chartered builder/civil engineer ( with MBA)and has many years construction experience - project managing. We are both EU citizens. Going over to Switzerland this week for a look , to see what the possibilities are.

Any idea where I can get info on tax issues about property development?
jo
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Old 30.05.2007, 11:46
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Re: Residential and Commercial property investment in Switzerland

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Hi,
my other half is looking at setting up a company to do this.He is a chartered builder/civil engineer ( with MBA)and has many years construction experience - project managing. We are both EU citizens. Going over to Switzerland this week for a look , to see what the possibilities are.

Any idea where I can get info on tax issues about property development?
jo
Hi Jo, firstly this is canton and Gemeinde relevant so you would need to know whereabouts you intend to do this. The tax varies enormously. As an example on a profit of 200000 Swiss Francs it can be 160000 ie 80%. Now as a company specifically setting out to buy and improve properties to be resold I think but I am not 100% sure that the special property tax is not relevant. This means you would fall under the normal company tax system which is circa 20% of the profit.

This particular point will either make or break your business idea and it is absolutely essential that you discuss this with a tax expert in the area you want to do business in. It is a very complex area of tax law and often challenged in the courts so also taking out legal insurance would be very sensible...

Sorry that I cannot help you more but this is over my head.
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Old 30.05.2007, 13:17
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Re: Residential and Commercial property investment in Switzerland

Hi Richard,
thanks. It would be a construction compnay specifically to do this sort of thing, canton of Vaud? fribourg- basically French speaking Switzerland.Might try and speak to tax expert when I`m over next week.
Jo
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Old 30.05.2007, 16:15
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Re: Residential and Commercial property investment in Switzerland

I have done a little research.......There seems to be nothing available in Zug city - the market here is as tight as a tick. Offerings arriving in the past two days have been mainly in the French and Italian parts, average yields from 'mehrefamilienhause' are about 6%. A typical property is 7 apartments in a fully let 1993 built, 645 sqm block in Bellinzona 1,43m Sfr 5.7% yield. At 204,000 sfr per flat this would seem to be below build cost.
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Old 04.06.2007, 11:20
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Re: Residential and Commercial property investment in Switzerland

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I have done a little research.......There seems to be nothing available in Zug city - the market here is as tight as a tick. Offerings arriving in the past two days have been mainly in the French and Italian parts, average yields from 'mehrefamilienhause' are about 6%. A typical property is 7 apartments in a fully let 1993 built, 645 sqm block in Bellinzona 1,43m Sfr 5.7% yield. At 204,000 sfr per flat this would seem to be below build cost.
I don't think you'll find the Swiss property market one to make a killing on. Though there are many big and small landlords, as you would expect in a country where 70% of the population are renting, the investment is regarded as 'steady' and often as a social obligation more than gold mine.

Essentially you have to forget what's going on in the UK - which may well in tears...
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Old 26.07.2007, 15:02
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Re: Residential and Commercial property investment in Switzerland

I think Switzerland looks good. 6% yield, with good leverage, and 4% financing is viable, especially if you are after longer term buy-hold strategy. Good tax breaks on renovation and maintenance, and a stable high quality tenant base, relatively honest management companies that charge <5% fully managed. It looks better than Germany to me. No quick money, but many sound buy fix let opportunities I suspect.

I would like to find property Auctions though. I have bought in the UK and Germany at Auction and have yet to find a single auction house over here...
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Old 30.07.2007, 15:32
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Re: Residential and Commercial property investment in Switzerland

I am about to buy an apartment near Zurich just outside the city limits.
The sale contract proposal splits the 1% selling price taxes and 2% Notary fees evenly between buyer and vendor.

Is this usual?

Thanks.
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Old 30.07.2007, 15:44
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Re: Residential and Commercial property investment in Switzerland

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I am about to buy an apartment near Zurich just outside the city limits.
The sale contract proposal splits the 1% selling price taxes and 2% Notary fees evenly between buyer and vendor.

Is this usual?

Thanks.
Yes it indeed is...
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Old 02.08.2007, 10:23
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Re: Residential and Commercial property investment in Switzerland

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I have done a little research.......There seems to be nothing available in Zug city - the market here is as tight as a tick. Offerings arriving in the past two days have been mainly in the French and Italian parts, average yields from 'mehrefamilienhause' are about 6%. A typical property is 7 apartments in a fully let 1993 built, 645 sqm block in Bellinzona 1,43m Sfr 5.7% yield. At 204,000 sfr per flat this would seem to be below build cost.
Alternatively there are plenty of Swiss property funds available (both residential and commercial) . Would imagine over the long term they must be returning between 3 – 5% Hassle free and far less tax payable on any profit.

Nick.
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Old 02.08.2007, 10:32
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Re: Residential and Commercial property investment in Switzerland

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Alternatively there are plenty of Swiss property funds available (both residential and commercial) . Would imagine over the long term they must be returning between 3 – 5% Hassle free and far less tax payable on any profit.

Nick.
How do you work out that there is far less tax payable on the profit. The profit would be subject to income tax declared as earnings from other sources. If in fact you own the property then you can write off considerable amounts of costs. The key to the whole thing is that you need to have a substantially higher return than any interest paid to purchase the property. With yield around the 6-7% this is not so easy to achieve.

Comparing this situation to Germany where the yield is typically 10% and you see a reason for not actually investing in the Swiss property market. As a relevant aside, both country's property markets are equally "sluggish"...
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Old 02.08.2007, 11:40
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Re: Residential and Commercial property investment in Switzerland

Richard
What I was trying to allude to, was that tax on profit made from funds would be declared on an income tax return and so would end up being about 20-30% as opposed to the 80% that you mentioned in one of your above post. Also if these funds can return 3-5% over the long term it's not much less than the 5.75% yield quoted only without the hassle and headaches of owning a property in CH.

Nick
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Old 02.08.2007, 18:10
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Re: Residential and Commercial property investment in Switzerland

Hi

we have bought a property in a ski resort which doesn't have as many restrictions as buying in Zurich - this might be an easy route to start with as the properties are cheaper although with global warming who knows how long the skiing will last....

We have B permits (EU) which has meant that we have bought an appartment block in Zurich and we have to live in this building if we want to rent the other appartments out. We cannot buy anymore properties in Zurich until the law changes (been told anything between 2 years and never) or when we get a C permit - or that may be full residence. I think that if we want to buy more property at the moment we have to form a company and I'm not sure if we want to do that at the moment. You have to put down at least 20% on each property you buy - they won't let you use the existing properties to guarantee the new acquisitions like they do in the UK

The market here is very different to the UK but it has worked out cheaper & more fun (for me anyway) to buy a place here - we can still invest in the UK if we get money. We plan to stay here so this was a way of us putting down roots - but I think if you are going to leave in a few years its not that wise an investment

Hope this helps
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Old 06.08.2007, 08:09
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Re: Residential and Commercial property investment in Switzerland

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Richard
What I was trying to allude to, was that tax on profit made from funds would be declared on an income tax return and so would end up being about 20-30% as opposed to the 80% that you mentioned in one of your above post. Also if these funds can return 3-5% over the long term it's not much less than the 5.75% yield quoted only without the hassle and headaches of owning a property in CH.

Nick
The 80% I mentioned earlier is relating to the profit on the capital investment. ie the profit on the difference between the selling price and the buying price. In a fund this does not exist at all... As you say if the funds return 3-5% then you are headache free.

The return on investment from a purchase is however much greater due to leverage of investment. ie you invest 100K for a 500K property and your return is 6.5% of 500K which equates to 35% of the 100K investment. Unfortunately you also have to pay the interest on the loan amount but never mind, you should still net over 10%... In Germany this figure is typically over 30% - that is the difference that 1 or 2% makes on the yield...
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