The purchase and rental prices for real estate vary greatly from region to region. In highly sought-after areas or large cities, you have to dig deeper into your pocket than if you want to live in a more rural area.
A look at the statistics shows how different the price structure is in the various cantons. In 2019, the square meter for a rental apartment in the canton of Zug cost an average of CHF 19.5. In the same year, one pays CHF 11.8 for it in the canton of Jura. The situation is similar for real estate purchases: In the canton of Geneva, buyers pay an average of CHF 13,750 for a square meter, while in the canton of Jura, only CHF 3,520 is due.
Renting is popular
Renting a house or apartment is very widespread in Switzerland. 2.3 million households lived in a rented apartment at the end of 2019, which corresponds to a total share of 60% of households in Switzerland.
In general, the rental rate is higher in urban areas than in rural ones. In Basel-Stadt, the rental rate in 2019 was 83% and in Geneva 78% – well above the national average. In contrast, the rental rate in more rural cantons such as Appenzell-Innerhoden was 38%. It is mainly single people and childless couples who choose to rent.
Rent property – what you need to consider
Broker can help with mediation
In highly sought-after areas, it is rare for a property to remain vacant for a long time. There, rental properties are often not even published on the Internet, but immediately referred by an agent or the landlord himself. So if you want to rent a property in a region that is in high demand, it is advisable to do so through a real estate agent. This can often drastically reduce the time needed to find a suitable property.
Use other sources as well
Even if you use a realtor, however, you should also go apartment or house hunting on your own to make sure you exhaust all your options and have the widest selection. Use real estate portals on the Internet as well as rental advertisements in local newspapers. Often, advertisements for rental properties are also posted at the municipal administration.
When you visit an apartment and are interested in it, it is always the landlord who decides whether or not to rent to you – even if you have hired an agent. Usually, a lease agreement is drawn up between you and the landlord, setting out the basic conditions for the tenancy.
A security deposit is often required when moving in, usually up to three months’ rent. The deposit is returned to the tenant upon moving out, provided the apartment is returned in the condition required by the lease. The lease agreement states both the exact amount of the monthly rent and the amount of the service charges. The monthly rent is usually equal to the cold rent, which means that heating costs for the rented apartment are included in the service charges.
The additional costs
Service charges usually include the costs for heating and hot water consumption. Depending on the tenancy, other things may also be agreed as ancillary costs, which must also be listed in the tenancy agreement, e.g. fees for garbage collection, Internet/TV connection, garden maintenance, snow removal, etc. Incidental costs that are not mentioned in the rental agreement are generally included in the rental price. How the ancillary costs are paid is also specified in the rental agreement. A distinction is made between the payment on account and the lump-sum payment:
Payment on account
The tenant pays a certain amount for the ancillary costs in advance each month (usually this is transferred together with the rent). The landlord then prepares a service charge statement annually. Service charges that have been paid too much are then refunded. In the event of additional consumption, an additional payment is due accordingly.
At the end of the year, check the service charge statement carefully. You do not have to pay service charges for an item that is not specifically mentioned in the lease. Repairs and maintenance work may not be billed as service charges. Likewise, it is not permissible to mark an item as “other operating costs”.
Lump sum payment
In the case of lump-sum payment, the tenant also pays the service charges monthly, but does not receive a statement at the end of the year. This means that no refund is made for under-consumption, and no additional payment is due for over-consumption.
Buying residential property – paying attention to taxes
Residence status decisive for real estate purchase
Anyone holding a C permit has the same rights as a Swiss citizen to purchase residential property in Switzerland – whether as a primary or secondary residence, or as a vacation home/apartment.
EU/EFTA nationals are allowed to buy a property if they have a B or C permit. For cross-border commuters (G permit), it is permitted to purchase residential property if this is for work purposes (e.g. to stay in their own property during the working week).
Costs when buying real estate
The purchase of a property must be financed from at least 20% equity, as the taking out of a mortgage is only allowed for a maximum of 80% of the purchase price. Please note that in addition to the purchase price, you will also incur other costs:
- Notary fees
- Registration fees for entry in the land register
- Real estate transfer tax (varies from canton to canton)
- possible brokerage costs
If you are retired and want to buy a property in which you will have your main residence, you can use your pension withdrawals from pillar 2 (pension fund) and pillar 3 (retirement pension) to pay off the mortgage.
Tax implications of the acquisition of residential property
If you buy residential property, this changes your tax situation considerably. From now on, the acquired property will be added to your assets. This changes both your wealth tax rate and the value of your taxable assets. Since property tax is set at different levels and the tax rate is calculated differently depending on the canton, the purchase of residential property can be a costly affair from a tax perspective. It is advisable to assess the changing tax situation before purchasing a property to avoid any nasty surprises after the purchase.
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