Foreign nationals, how to buy a property as a second home?

In Switzerland we distinguishe several "categories" of foreign citizens according to their nationality and residence permit.

If you do not have a Swiss residency permit or a valid residence permit (L, B or C), you will be considered as a foreign person in the sense of the law and will be subject to the Law on the Acquisition of Real Estate by Persons Abroad of 1983. You will have to apply to the authorities for a permit to acquire your property intended to become your second home.

What are the main conditions?

• Purchase authorization issued by the competent authorities.
• Only within a tourist commune (according to the list). Attention, the "Lex Weber" (see figure A) imposes since 01.01.2016 a communal quota system of a maximum of 20% of second homes (see paragraph).
• Private use only. Rental is allowed on a periodic basis and not permanently (maximum 6 months per year).
• Only one vacation property per family: husband & wife and/or minor children. From the age of 18, the child of an owner may acquire a property in his or her name provided that he or she can prove financial independence.
• Max. living area of 200 m2 (or 250 m2 in some cases).
• Maximum land area of 1,000 m2 (or 1,500 m2 in some cases) in the case of the purchase of a chalet or detached house.
• Prohibition of resale for 5 years, except in case of force majeure (illness, death, etc.) but without profit.

Below are two more questions frequently asked to the experts at Cardis Sotheby's International Realty:

May I acquire commercial real estate in Switzerland without being domiciled in Switzerland?

OYes, a person resident abroad can acquire commercial real estate in Switzerland without any restrictions. It can be used either for the exercise of an activity or for rental. There are no restrictions as to the location and number of properties acquired. Likewise, the purchaser may purchase it in his own name or through a Swiss or foreign legal structure.

Will there be a lot of taxation on my second home?

In Switzerland, taxes are levied by 3 authorities, namely the Confederation, the Canton and the Commune. For individuals, only the real estate assets and the related income (rental value) are taxable. All other income as well as the assets remain taxable at the taxpayer's principal residence. However, these last elements must be brought to the attention of the Swiss tax authorities in order to be used to determine the overall rates of the various taxes unless the owner agrees to be taxed at a flat rate, which can sometimes be advantageous. The tax value of the property constitutes the basis for determining the taxable assets. In addition to this, there is the direct federal tax, the annual property tax and a visitor's tax.