Switzerland bucks the trend of falling property prices thanks to foreign buyers who are attracted by the favourable fiscal conditions. Switzerland’s benign tax regime has long made it a favourite with pop stars and racing drivers, but these days its appeal is growing for foreign high net worth buyers.
Monaco and the Cayman Islands may be more glamorous, and Gibraltar has the lowest corporate tax in Europe, but convenience and lifestyle play a big part in Switzerland’s appeal. Switzerland is an accessible location in the centre of Europe, with a stable economy, and a good selection of schools and housing.
Each of Switzerland’s principal cantons sets its own residency rules and tax levels. Income tax rates are usually below 30 per cent. Most people don’t have to pay capital gains tax and few cantons levy inheritance tax.
In non-tourist areas such as Zurich and Geneva, which are of most interest to wealthy buyers, foreigners must gain residency before they can buy. Obtaining residency normally requires a contract of employment or proof of sufficient wealth. The rules for buying in tourist areas, including most ski areas, are different and residency is not a requirement. However, non-residents are allowed to buy only one property and it can not be larger than 200 sq metres.
New measures are planned for next year, allowing each canton to set its own property ownership laws rather than current rules set by the federal government. These new rules would simplify the home-buying process, making Switzerland even more attractive to foreign buyers.
Most Britons considering making the move look for cosmopolitan, French-speaking Geneva or the towns and villages along the northern shore of Lake Geneva. Yet housing is expensive and in short supply because of the influx of relocating foreigners – almost 50% of Geneva’s residents are ex pats. Lausanne, capital of neighbouring Vaud canton is another popular option, partly due to lower taxes.
Another option with lower taxes than Geneva is Zurich, Switzerland’s largest city as well as its financial centre and near ski resorts such as Klosters, Davos and Flims. A residency is required to buy a property in Zurich but most sellers will allow you to rent the property until the permit has been being sorted out.
Zug, a tiny canton 45 minutes south of Zurich airport, income tax is the lowest in Switzerland — just 10% on average. The quality of life is constantly rated among the best in the country, there are several international schools and a growing foreign community.
Ticino, a canton in the Italian-speaking part of Switzerland has a much smaller smaller financial centre than Zurich or Geneva, but is still attracting its fair share of foreign buyers with its beautiful scenery and Latin spirit. What’s more, Milan’s shops, galleries and airport are close by.
The lakeside towns of Lugano and Locarno are other areas where a residency is not required and property prices are lower than in in Zurich and Geneva.
View Luxury property for sale in Switzerland at International Luxury Real Estate.
