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Old 11.03.2010, 07:25
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Re: Buying a house in swizerland

Castro

It sounds like you mean 'Baurecht' - essentially it's a leasehold purchase with, as you say, ground rent payable to the freeholder. I think the variables are similar to UK leasehold - ie term of lease and amount of ground rent per year. From the ones I have seen the 'Baurecht' often seems to be a much shorter term than a normal UK leasehold and can be 'bought out' after a period of time (bit like the final payment to own on a leashold car). All from casual observation of the market - never researched thoroughly.
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  #82  
Old 11.03.2010, 07:42
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Re: Buying a house in swizerland

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the lady's English wasn't great but she explained that the land the building was on belonged to someone else and therefore every apartment had to pay monthly rent.
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It sounds like you mean 'Baurecht' - essentially it's a leasehold purchase with, as you say, ground rent payable to the freeholder.
Exactly, Baurecht and it should be avoided at all costs as this type of property is very difficult to resale here in Switzerland.
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  #83  
Old 11.03.2010, 08:08
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Re: Buying a house in swizerland

Thanks guys, she said that the Baurecht is fixed for the next 99 years and I have to say that the property is priced accordingly, similar properties are around CHF 200k more.

The one thing that puzzles me though is the unusually high nebenkosten (CHF 450/month), in the rental market its usually around half that. Is this because the real amount is somehow rolled up into the rent?

Cheers
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  #84  
Old 11.03.2010, 08:25
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Today i went to CS and the bank told me that if i choose a fixed rate planning I will NOT be allowed to amortize my mortgage during the underline period, this is insane!! Is it true with all you home owners?
The bank avoids taking too much risk with mortgages so when you take a fixed rate mortgage in order to ensure they do not lose money they then borrow on the international markets at a level that allows them to make a small margin, but it's at fixed terms, which are passed on to you, plus their margin at the exact same terms.

If you want to pay off your mortgage, you'll need a fixed rate with amortisistation on a fixed basis. If you fall behind the penalty payments can be horrendous.

If you want fixed interest mortgage and amortisise, youre best off taking a 3rd pension fund which you can pay in about Chf 6'500.-- per year and after 5 years you can use this to amortisie your house. One or more partners can do this but you ALL have to be owner of the house, ie if your married you both need to be onb the purchase doxs as otherwsie you cannot cash in the 3rd pension fund before pensionable age.

You coulds always set up a savings account and pay in regularly; when the fixed rate morgage finished you use your saving to begin paying off the mortgage.
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Old 11.03.2010, 08:43
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Re: Buying a house in swizerland

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Thanks guys, she said that the Baurecht is fixed for the next 99 years and I have to say that the property is priced accordingly, similar properties are around CHF 200k more.

The one thing that puzzles me though is the unusually high nebenkosten (CHF 450/month), in the rental market its usually around half that. Is this because the real amount is somehow rolled up into the rent?

Cheers
It could be that redecorating of all 'common' areas and maintenance and repair fund is included in that amount, which does seem high otherwise. The sellers/agents should be able to give you fulll details of what's involved...
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Old 11.03.2010, 09:17
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Re: Buying a house in swizerland

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It could be that redecorating of all 'common' areas and maintenance and repair fund is included in that amount, which does seem high otherwise. The sellers/agents should be able to give you fulll details of what's involved...
You are right, its now coming back to me. She did say about CHF90 of the monthly nebenkosten is put into a fund for building maintenance.

Hopefully I'm going to be a lot more clued up the next time I go to see a place
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Old 11.03.2010, 09:21
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The one thing that puzzles me though is the unusually high nebenkosten (CHF 450/month), in the rental market its usually around half that. Is this because the real amount is somehow rolled up into the rent?
Nebenkosten will always be higher for homeowners because renters only see them mostly as regular maintenance/cleaning and heating costs. Costs that a homeowner have are, insurance on the building, administration costs, electric for common areas (hallways, gardens, garage) and the big one, Erneuerungsfonds (savings account for future repairs). My total for this year are just over 6,500.- so 450.- a month is actually on the low side.
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Old 11.03.2010, 09:31
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Re: Buying a house in swizerland

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Today i went to CS and the bank told me that if i choose a fixed rate planning I will NOT be allowed to amortize my mortgage during the underline period, this is insane!! Is it true with all you home owners?

Just to add to Charlie's comment, the other thing to remember is that you don't have to have your whole mortgage in one chunk.

We're splitting our 65% block into different slices (or tranches as our mortgage bloke calls them). Each tanche has to be a minimum 100k CHF (this is with COOP).

So we have a 20% variable (poor rate but needs to be variable to be paid off), the rest in 20% chunks at LIBOR rate +1% - locked in for 3 years. If we need to come out of the LIBOR rate (you can opt out once if the LIBOR rates spike), then we have to choose another fixed rate product for a remainder of the 3 year period.

What this means is that only have a minimum amount at a variable rate.
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Old 11.03.2010, 12:58
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Re: Buying a house in swizerland

is the assumed rent tax burden canton specific ? thanks
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Old 11.03.2010, 13:01
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Re: Buying a house in swizerland

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is the assumed rent tax burden canton specific ? thanks
Yes

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Old 12.03.2010, 11:22
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Re: Buying a house in swizerland

I'm still really torn about this issue of Baurecht, the apartment we saw was quite literally perfect and priced below the market rate because of the lack of Freehold. Is it really the kiss of death when it comes to resale? As a Londoner the idea of buying leasehold doesn't really spook me, but for the Swiss it may a much bigger issue. We've already asked if its possible to buy out the baurecht and the answer was no, the local Property company which owns it are not interested.
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Old 12.03.2010, 11:32
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I'm still really torn about this issue of Baurecht, the apartment we saw was quite literally perfect and priced below the market rate because of the lack of Freehold. Is it really the kiss of death when it comes to resale? As a Londoner the idea of buying leasehold doesn't really spook me, but for the Swiss it may a much bigger issue. We've already asked if its possible to buy out the baurecht and the answer was no, the local Property company which owns it are not interested.

When in Rome, do as the Romans, who cares what is the norm in London when you're buying in CH, it's irrelevant.

You'll lose a shed load of money doing this, the bank will ask for a higher up front deposit as the shorter the lease becomes, the less valuable the house becomes.

You better start a thread now in the complaints section about how unfair it all is and how nasty the Swiss are.

This is not a common practice here and it's almost certain you'll lose money.
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Old 12.03.2010, 11:33
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Re: Buying a house in swizerland

Hi, I live in Suisse Romande so I have just now figured out what you ara talking about is 'droit de superficie'. I think that actually this may not such a bad arrangement.

It depends on where you live -- in Geneva, for example, houses are so expensive that 'baurecht', as you call it, is sometimes the only affordable option for people with normal incomes. Recently there was a new development in a good Geneva suburb where approximately half the flats were sold under this arrangement and the other half were offered at market prices. The result: the former were sold within weeks, the regularly-priced ones lingered for months because they were approximately 30% more expensive.
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Old 12.03.2010, 11:43
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Re: Buying a house in swizerland

200k cheaper than equivalent property sounds good, but...

My quick calculation tells me that instead of paying Fr.490 per month to the landowner, you can increase your mortgage payment by the same amount and increase your budget by CHF200k, if interest rates is at about 3%.

With the current low interest rates, your budget is actually much bigger.

Then again, is the bank going to approve a higher mortgage payment for you?
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Old 12.03.2010, 13:40
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Re: Buying a house in swizerland

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When in Rome, do as the Romans, who cares what is the norm in London when you're buying in CH, it's irrelevant.

You'll lose a shed load of money doing this, the bank will ask for a higher up front deposit as the shorter the lease becomes, the less valuable the house becomes.

You better start a thread now in the complaints section about how unfair it all is and how nasty the Swiss are.

This is not a common practice here and it's almost certain you'll lose money.
I would ask the advice of your mortgage lender. Mine is the ZKB (Kantonal Bank) and my advisor is excellent for such advice...
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Old 05.10.2020, 16:54
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Re: Buying a house in swizerland

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We bought a house with < 20% down.

Paid 1% transaction costs split between buyer and seller in Zug. This can be different for other Kantons with our friends in Freibourg paying around 30k transaction costs for a CHF 500k apartment.

Paid a couple of hundred francs to register the debt (Schuldbrief).


Hidden costs:

Maintenance - the bank's assumption of 1% of the purchase price per year has been accurate for us over 4 years with a house <10 years old. Everything seems to start breaking 10 years Things are also VERY expensive to replace. Eg. Miele Dishwasher CHF 2,600, V-Zug cooker top CHF 2,300, 1m wide rotten wooden window CHF 3,000, Aircon split system CHF 4,300 (still broken).

Gardening - a total pain with tree and hedge height and neighbour's boundry issues

Increased tax burden - the deemeed rental value is calculated (in Zug based on purchase price) and this is added to your income. That amount is a similar figure to my part-time salary in Zug.
Hi,

this is not just for you (as you already have a house). But, I would like to share is with others.

I am an architect, I love my job, and as much I love it, as much I suffer seeing new houses with teribble mistakes. (even in Switzerland)

Some things, which I saw are not even apologizable at all.

So one tip:

Before buying a "new" house <8-10 years, visit also other realizations from this architect (construction company). - observe, if they have some construction mistakes.

When buying an old house, really watch every stain on the wall and ask about everything you see on the building, which doesn´t seem right enough. Mostly, if the older buyilding has good walls and roof - its very likely to be builded in a good way.

Also, while buying a property, think about visiting the properties with somebody from the field of construction - who will look on the real state of the house and give you advices. - because honestly even a thousand francs for consultation are less then possible reparation of a house, where some construction was not made well.

And ... even in swiss, I really saw things, which for repairing take thousands and thousands of francs
For example: A house, which costs to build were 2 milions and after 6 years the owner has to pay 600 thousands of francs just to repair it. (water isulations problems) AND, without the promise, that it will be able to repair it at all.

So, think twice, before buying some property
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Old 05.10.2020, 17:18
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Re: Buying a house in swizerland

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Hi,

this is not just for you (as you already have a house). But, I would like to share is with others.

I am an architect, I love my job, and as much I love it, as much I suffer seeing new houses with teribble mistakes. (even in Switzerland)

Some things, which I saw are not even apologizable at all.

So one tip:

Before buying a "new" house <8-10 years, visit also other realizations from this architect (construction company). - observe, if they have some construction mistakes.

When buying an old house, really watch every stain on the wall and ask about everything you see on the building, which doesn´t seem right enough. Mostly, if the older buyilding has good walls and roof - its very likely to be builded in a good way.

Also, while buying a property, think about visiting the properties with somebody from the field of construction - who will look on the real state of the house and give you advices. - because honestly even a thousand francs for consultation are less then possible reparation of a house, where some construction was not made well.

And ... even in swiss, I really saw things, which for repairing take thousands and thousands of francs
For example: A house, which costs to build were 2 milions and after 6 years the owner has to pay 600 thousands of francs just to repair it. (water isulations problems) AND, without the promise, that it will be able to repair it at all.

So, think twice, before buying some property
Wouldnt a building insurance cover the cost, at least part of it?
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