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-   -   Holiday Apartment Purchase (https://www.englishforum.ch/housing-general/291973-holiday-apartment-purchase.html)

Graham S 17.05.2019 14:16

Holiday Apartment Purchase
 
Hi All

We are looking to purchase a holiday apartment for our own use in Switzerland (not to be rented out) and we are UK residents. We have been in touch with the local Gemeinde and the local Regierungsstatthalteramt with regards to permissions, restrictions and taxes.

We are aware we will need to pay the Nebenkosten, Liegenschaftssteuer, Schwellentelle and Kurtaxen along with any utility bills (electric, water) and house insurance.

We are also aware we would need things like the Universal License for TV / Radio. Is there anything else we need to be aware of or need to consider?

Any information would be much appreciated.

amogles 17.05.2019 14:33

Re: Holiday Apartment Purchase
 
Are you paying cash or using a mortgage?


Swiss banks may be particular about mortgages so make sure to read the small print. For example if the appartment depreciates in value they may require that you repay part of the mortgage to protect their risk exposure.


Also make sure that your bank actually allows you to have an account as a non Swiss / non resident. I understand some banks are a bit difficult in that department. You will probably need an account to pay the various bills by direct debit.

Graham S 17.05.2019 14:57

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by amogles (Post 3068992)
Are you paying cash or using a mortgage?


Swiss banks may be particular about mortgages so make sure to read the small print. For example if the appartment depreciates in value they may require that you repay part of the mortgage to protect their risk exposure.


Also make sure that your bank actually allows you to have an account as a non Swiss / non resident. I understand some banks are a bit difficult in that department. You will probably need an account to pay the various bills by direct debit.

Thanks for the response. It would be a cash purchase, no mortgage involved.

We would assume a bank account would be needed for the bills. I had a quick look and I think most of the larger banks should be fine with us.

Guest 17.05.2019 16:32

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by Graham S (Post 3068995)
Thanks for the response. It would be a cash purchase, no mortgage involved.

We would assume a bank account would be needed for the bills. I had a quick look and I think most of the larger banks should be fine with us.




Why ? Use Revolut, far more economical for your situation

AbFab 17.05.2019 16:41

Re: Holiday Apartment Purchase
 
You should be aware of capital gains tax (Grundstuckgeweinsteuer) on property sales when that time comes and if there's a profit...

Graham S 17.05.2019 16:46

Re: Holiday Apartment Purchase
 
Quote:

Why ? Use Revolut, far more economical for your situation
Would that work for paying monthly bills? I would have assumed you would need to pay by direct debit from a bank account.

heckenhocker 18.05.2019 22:06

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by Graham S (Post 3069030)
Would that work for paying monthly bills? I would have assumed you would need to pay by direct debit from a bank account.

I don't think we pay any of our utility bills by DD. The bill comes (in the post or electronically), we pay it online.

DD do exist in Switzerland - our health insurance is on one so the co-pay can be collected automatically, just doesn't seem to be a typical way to manage utilities.

Check what the Nebenkosten includes - often water and electricity are in there, with an annual "true-up" of actual bills vs the monthly / quarterly NK payments.

Other costs:
1) medical coverage: make sure you have travel insurance appropriate for the amount of time / frequency you plan to be in CH. And if you will be in the mountains for hiking / winter sports, take out REGA membership (they'll send a medical helicopter as needed to scrape you up after an accident ....bargain at CHF 30 per year for a adult, CHF 70 for a family)

2) will you drive here? or arrive by plane / train? might be worth getting a Halbtax if using trains a lot. It's an annual card at around CHF 180 giving zou 50% off public transport fares

Snoopy 19.05.2019 00:21

Re: Holiday Apartment Purchase
 
In an apartment you may be required to make an annual contribution to the buildings maintenance fund (Erneuerungsfond). It would be worth ascertaining how much that would be.

roegner 19.05.2019 07:09

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by Snoopy (Post 3069220)
In an apartment you may be required to make an annual contribution to the buildings maintenance fund (Erneuerungsfond). It would be worth ascertaining how much that would be.

Good point. And check what already has been paid in (and if the previous owner paid and on time) and if any repairs are planned for the future.

RTN 19.05.2019 08:57

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by Snoopy (Post 3069220)
In an apartment you may be required to make an annual contribution to the buildings maintenance fund (Erneuerungsfond). It would be worth ascertaining how much that would be.

This has a strong effect on the price especially on older apartments. There are a few apartments built in the 70s coming on to the market now as the original owners can't or don't want to put in the money to upgrade. Items to check are heating, windows, roof insulation and facade, most of these are at the end of their serviceable life with increasing energy costs as a result rather than actually creating problems. Eyes wide open and there are bargains to be had as renovations can be expensive if you do it in the traditional Swiss way.

Guest 19.05.2019 09:06

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by Graham S (Post 3069030)
Would that work for paying monthly bills? I would have assumed you would need to pay by direct debit from a bank account.




The only obligation you have is to pay the bill, how you do it is up to you, sure DD is easiest but you can also pay by a simple bank transfer if you want to.

Graham S 19.05.2019 22:45

Re: Holiday Apartment Purchase
 
Thanks all, most helpful. It shas given us a few things to ask and check on.

Only other thing is insurance for the property. From what I can tell we would need content insurance and possibly public liability but not physical building. Is this correct?

Also would it be advisable to get a Swiss company rather than a UK based firm to do the insurance?

doropfiz 20.05.2019 06:41

Re: Holiday Apartment Purchase
 
Check how the apartment block is managed.

Some owners keep costs down by doing the management and some if the work, e.g. accounting, fire inspections, gardening and refuse disposal themselves, with every owner having certain recurring duties.

Others elect a committee from amongst the owners, who do the work as volunteers or sometimes for compensation.

Yet others delegate the whole matter to an agency, for a fee.

In any event, there will be at least an Annual General Meeting of all the owners. Ask to see the minutes of the past three years, as well as the financial statements and planning. Those will show you whether things are up-to-date, whether someone is taking the trouble to set aside adequate funds for future maintenance and repairs, and most especially whether there are factions engaged in ongoing unresolved disputes. You don't want to be buying into a dysfunctional family.

doropfiz 20.05.2019 06:47

Re: Holiday Apartment Purchase
 
Here's another thread with related ideas:
https://www.englishforum.ch/housing-...checklist.html

Klostersgirl 20.05.2019 17:23

Re: Holiday Apartment Purchase
 
If you are buying in a ski resort, you may also want to check on the cost of snow clearance. We have a holiday apartment in Klosters and snow clearance can be quite costly depending on the situation of your property. In our case our building has a private drive leading to the garage and entrance to the building and external car park. This area has to be clear of snow to allow access and the snow has to be disposed of. Although this is all arranged by the Managing Agent through the building caretaker it does add to our costs. In years of heavy snowfall we also have to pay for the windows in the roof to be checked by a roofing company which is also quite pricey.

Depending on the access to any property you might choose, these costs can vary greatly so it just might be something to check up on.

Graham S 21.05.2019 14:19

Re: Holiday Apartment Purchase
 
Thanks for all this. I will enquire about the AGM minutes as the building is managed as a StWEG.

Urs Max 21.05.2019 15:03

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by Graham S (Post 3069902)
Thanks for all this. I will enquire about the AGM minutes as the building is managed as a StWEG.

The meeting can decide on expenses and how they're paid for. You want to make sure your interests are protected thus you want to be able to be present, or be represented, at every owners meeting.

RTN 20.06.2019 09:56

Re: Holiday Apartment Purchase
 
Just for information, I ran through an cost exercise for a client recently so I thought I would share it. The idea being to buy a 2Br apartment and renovate it and sell in 18 to 24 Mths whilst making a profit after all costs without renting it out. As with any investment exercise past performance can give you an idea for potential outcomes but nothing is guaranteed. The "profit" comes more from tax savings than selling the property at a price higher than actual costs, this (tax saving) of course is individually variable depending on income and tax rate of residence.

Residence Meilen, Salary 250K

Apartment in Flims purchase 500k aimed selling price 700k.
Costs
200k Deposit (40% of purchase price for holiday homes)
Interest @ 1% of 300k for 2 years 6k
Neben cost for 2 years 11k
Renovation 150k
Capital gains tax 6% up 100k 6k
Capital gains tax 11% above 100k 11k
Agent fee to sell 3% (or sell it yourself) 15k
Total Cost 199k

Tax saving.
250k Salary 46.6k year
100k Salary (deducting renovation cost) 6.4k year
175k Salary (deducting renovation cost over two years) 22.6k year

So in this summary, you could have a holiday apartment and be 20k a year in front! But not a lot of people have access to 350k and a salary of 250k with very few tax deductibles but if you do I could assist you, pm me.

3Wishes 20.06.2019 14:38

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by RTN (Post 3077026)
Just for information, I ran through an cost exercise for a client recently so I thought I would share it. The idea being to buy a 2Br apartment and renovate it and sell in 18 to 24 Mths whilst making a profit after all costs without renting it out...

I thought I had read there are penalties for selling so soon after buying, to avoid this type of property speculation?:confused:

RTN 20.06.2019 16:35

Re: Holiday Apartment Purchase
 
Quote:

Originally Posted by 3Wishes (Post 3077096)
I thought I had read there are penalties for selling so soon after buying, to avoid this type of property speculation?:confused:

All cantons have capital gains tax which is the "penalty", the rate varies depending on the canton and time owned, GraubŁnden has one of the lowest maximum rates which is 11% on gains above 100k at the end of the first year which makes it attractive. Depending on what is actually done and how it is described in invoicing it could be more renovation or capital works, one cuts down your personal tax the other lowers capital gains tax but I am a carpenter not an accountant.


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