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Old 09.04.2009, 16:18
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house purchase montreux

Hi everyone, this is my first time using a forum, so apologies if my protocol is not up to speed! we moved to Switzerland 8 months ago and are now considering buying rather than renting a house in montreux area. However from reading some of your threads it seems like a complete minefield! As a starter on my quest for knowledge on this subject, would anyone know the answer to the following -

1.the rate of tax that they charge in montreux on future potential rental earnings
2. my husband heard something about foreigners are not allowed now to purchase property in montreux or is that just holiday homes.

I am blown away by the complexity of the whole process so any help would be gratefully received.
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Old 09.04.2009, 16:40
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Re: house purchase montreux

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1.the rate of tax that they charge in montreux on future potential rental earnings
2. my husband heard something about foreigners are not allowed now to purchase property in montreux or is that just holiday homes.
to give you simple answers to your questions (your personal circumstances will make it much more complicated!)

1.) whether you live in your apartment/house yourselves or not you still have to declare a 'deemed' possible rental income in your annual tax return. it depends on square metres, location and the CH 'tax/deed' value of the property. an equation I have seen is something like think: 5% of the property purchase price, per year is applied to second foreign homes, because the tax value and the deeds cannot be properly 'sanctioned' of a foreign country .

it then gets classed as income so there is no tax rate as such. it will be added to your salary and other deductions will be taken off and then that annual total is taxed at a rate.

if you actually rent it out, then its the same thing but there are more hoops to jump through as far as i know.

but you do get mortgage interest payments deducted from your taxes


2.) depends on your passport. EU'ers can do pretty much what they like now. but serious property investment is still restricted (and is expensive, especially in montreux too).

you really want to spend the time going through both the tax and property threads here. there a huge amount of information that will be very expensive to obtain from a professional. but of course you can also approach a professional for that advise if you wish (c;
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Old 09.04.2009, 21:29
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Re: house purchase montreux

many thanks for that Bill , will do so
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Old 21.06.2009, 16:59
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Re: house purchase montreux

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considering buying rather than renting a house
I moved to Switzerland,(Baden Area) few months ago and having read through various information on the web, I gathered that about 70% of swiss population lives in rented accommodation rather than owning one. Any known reasons if this is true ?

What are the pros and cons for an EU citizens with almost stable/foreseeable employment assurance for 5 years...?

All inputs appreciated
Thanks in advance
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Old 21.06.2009, 18:15
Nev
 
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Re: house purchase montreux

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I gathered that about 70% of swiss population lives in rented accommodation rather than owning one. Any known reasons if this is true ?
Yes it's true - somewhere between 65% to 70% depending on which survey you read for the following reasons:
1. It costs big bucks to buy a place here. Part of the reason is that historically the supply has been limited.
2. You need to put in serious money yourself - at least 20% of the purchase price
3. The buyer has to stump up fees and taxes of up to 4% on top of the purchase price, depending on your canton.
4. Apart from the money, I know people here who could afford to buy but won't because they don't want the commitment. The property market here crashed in the 1990s. In some areas prices haven't recovered and this frightened people off buying. There's not the cultural imperative of owning your home here like the US and the UK.

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What are the pros and cons for an EU citizens with almost stable/foreseeable employment assurance for 5 years...?
Pros:
1. Rent is dead money. Mortgage payments go towards something you own.
2. Relatively low interest rates and interest only mortgages make buying more achievable even though capital prices are steep.
Cons:
1. Owning property here is commitment. Any maintenance that involves labour is expensive
2. Lack of mobility. It can take a while to sell a house. They are not always a liquid investment
3. You won't make quick money. Property values are relatively stable and capital gains will be taxed though these reduce the longer you own the property.

In a nutshell I think buying a property only makes sense if you're here for the long haul. Some of this has already been discussed here:
[Ins and Outs] Buying Property in Switzerland
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Old 22.06.2009, 08:22
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Re: house purchase montreux

[quote=Nev;479293]
3. The buyer has to stump up fees and taxes of up to 4% on top of the purchase price, depending on your canton.

In Vaud it's closer to 5%. The Canton/Commune take 3.3% which is collected by the notary (in advance, of course) and the notary fees are between 1.2-1.7%. Don't even think about negotiating, the notaries are in an association (read Cartel) and you need one to buy a house.

When i'm reincarnated, i'm comming back as a Swiss notary, it's a license to print money !
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  #7  
Old 22.06.2009, 08:43
Nev
 
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Re: house purchase montreux

To make buying more affordable in recent years I've seen a lot more "estate" type developments sprouting up - where developers buy a field and build lots of small detached villas in a high density grouping, where in the past they might have built flats or condos. These seem really popular and seem to get snapped up quickly. The plus is that it brings home ownership within the reach of more people. The downside is that these houses are really built on top of each other, there's no privacy and the gardens are the size of a postage stamp. But someone who bought one told me that locals prefer small gardens because they like to have a bit of space for a terrace to eat outside but don't want to spend a lot of time gardening. And paying a gardener to do the maintenance is so expensive here. You hardly ever see these places up for resale in local estate agents windows like you would in England.
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