Buy to rent is an excellent investment. Just make sure you are prepared to own the property for a long time as the tax paid on profit made from sold properties which you've owned for a short time is high.

Oh and for a property you own and live in yourself you will have 'eigenmietwert' added to your tax return. Still makes it attractive to own but shouldn't be forgotten when doing your calculations.

Thx everyone for the nice replies!

I went to Post Finance to ask about the mortgage details.

They also told me about the 20% "cash" and the possibility of using a third pillar account for making the amortization payment.

What was interesting to finally understand is what happens to my debt once the mortgage reaches its limit. As it was answered to me in this thread I can have the debt forever. However, the interest rate for the new mortgage will need to be evaluated once my first mortgage comes to an end. In fact your entire situation is once again evaluated. As the lady explained to me, in the worst case scenario I may have to sell the house to pay my debt (unlikely). Another interesting point she raised is that currently it is more interesting to buy a house then to rent because the interet rates are really low. This may not be true once I have to renew my mortgage.

Yet another interesting point is that when the mortgage interest rate goes up, so do rents. When the rate comes down, do rents come down??

Mortgage interest is at its lowest level for well over 20 years in Switzerland - has any renter actually been informed of a rent reduction? I think not...

Yes, I have. If your landlord doesn't lower the rent you have to insist. At least make sure that the rent won't be increased once interest rates go up again.

In terms of buy to rent, I thought there were restrictions on us foreigners owning more than one property.. or at least tax penalties to dissuade us.

I am under the impression that foreiggners can only buy in certain cantons and there is often a waiting list for foreigners to buy in a canton.
I also understand that a foreigner is restricted to a max of 200 square metres of accomodation.

Old thread, but I hope OP is still happy to answer posts. Given the economy is still going pear shaped, I'm thinking to put cash into real assets.

I'm familiar with the property buying process in the UK and was wondering what are the pitfalls/differences compared to the UK?

Transaction costs

For example, what are the transaction costs on buying and selling. My understanding that there will be a percentage to be paid by both buyer and seller to the Treuhand. Also, are there any transfer taxes or land registration taxes? What other ancilliary transaction costs e.g. legal?

On-going costs

What are the costs of owning which I don't (directly) see right now? Presumably some form of buildings insurance. Land taxes? I guess also wealth taxes, but anything else specific to home ownership?

I guess there's eigenvermietwert too. Anything else?

Disposal costs

I guess you get to pay a whole load of transaction costs again if you ever sell the property. Also, if you're lucky enough to make a gain on selling, you have some tax on the gain. Anything else?

The other point is if you're not able to sell, and you have to rent out the property, aside from paying tax if you manage to make a profit from this - is there anything else to be aware of?

I guess I would never want to be a landlord in France, but not sure what the situation is like in Switzerland e.g. when it comes to enforcement/eviction and also whether there are any hoops to jump through to become a landlord e.g. registration, legal hoops on deposits etc.

AIUI if you are an EU citizen with a B permit and/or C permit holder, you have the same property purchase rights as a Swiss citizen.

I would say that (as I have been posting on this forum) that there are still many more repercussions in the financial markets/banks in the world in coming months and years.
I would not invest in property anywhere in the world at the moment. I still think property has to fall further.
However saying that; Switzerland in my opinion would be the least effected.
The reason that I would concider buying property in Switzerland would be:
(1) Not sure that money in banks is safe.
(2) I want the property for myself and family to live in for at least 10 years.
(3) Better than having the money tied up in Swiss Pension scheme if you can take it out.

Maintenance costs are the biggest cost for us. Replacing rotten window 3k, stove top 2k+, dishwasher 2.6k, sun shade maintenance a few thousand over 5 years and now 3.6k to replace just 4 blinds. Appliances here are expensive.

That is so so true.

If you are good at DIY; then buying property is OK.
But you tenents out there think us Swiss landlords are having it away ignorant of the maintenance costs for even simple things that most landlords have to pay as they generally always pay "professionals" to do the jobs.

Hi,

I am looking at buying a ski apartment as an investment; to rent out, for my family to use at quiet times and to use more and more as retirement approaches.

I currently rent in Geneva; I have been there for 5 years, so was hoping that the apartment would class as my prime residence so that I could pledge the funds form my pension pillar 2. [I don’t own any other property in Switzerland]

I understand that there might be a discussion to be had over where my taxes are paid, that’s OK I’m not moving for tax reasons and will be ‘happy’ to pay my taxes wherever I am legally obliged to.

My, question … I have been told, by a friend, that, as the daily commute from the ski resorts isn’t feasible I can’t declare the apartment as my prime residence and therefore cant pledge my pillar 2.

Does anyone know if this is true? If it is … are there any solutions?

Regards,

MC

I am interesting in knowing what ongoing tax costs are once you own the property outright, in the ZH canton. Anyone got the answer how it works here?

Remember houses in CH don't go up in price very much- not like they did in the UK for the past 30 years!! However for those who intend to return to the UK at some point - you could make a lot of money on the exchange rate! Would be about 40% up for us!

To take advantage of that you would have had to have bought prior to the pound going down.

Lucky for some then

Yep we did. But not very funny now as we are here on UK pensions in Sterling.

I can't tell you about using a ski chalet as your primary residence.

But what I can say is that you can't pledge your retirement account for property that you rent out or use as a holiday home/second residence and getting a mortgage on a rental property usually means a substantial down payment of 50% or more depending on a whole bunch of things.

Solution: Cash down payment.