With the arrival of a new year I thought that I'd start a single thread covering Switzerland.
With all the interest in the MIddle East and Eastern Europe, I'd still maintain that Switzerland is worth considering for a certain profile of investor. Switzerland £/m2 is often cheaper than France, with better build quality and buying is not difficult compared to many other countries. Mortgage interest rates are significantly lower than in the EU - usually around 3%-4% less.
If you're thinking of somewhere where you make use of the place yourself; if you like winter and summer outdoor activities like skiing, mountain-biking and walking; and if you don't have to rely on rents to pay the mortgage, then it may be worth looking at.
Conversely, if you are loking for a bit more return and are willing to take a risk, then it might not be for you.
For a run-down on our experience of buying in Switzerland, take a look at our personal website for our apartment at 'www.laforet35.com' and click on the link to 'Buying in Switzerland' at the bottom.
Agree with all you say about an investment in Switzerland. We`re in the process of buying an apartment at Hameau de la Gare in Les Diablerets (canton Vaud). We`ve heard the Swiss authorities have recently imposed a halt on the request for permits to purchase for 12 months until they`ve caught up with the outstanding applications. We made an application last year so we think our application should be decided by the end of this year (or so our notary has indicated).
Can I ask if you took out a swiss mortgage for your property? If so, are they relatively easy to arrange? We have been put in contact with a finance company who will arrange a mortgage for us but they charge a fee - just wondering if it`s easy enough to do ourselves?
There's absolutely no reason to pay anyone a fee for merely introducing you to a bank. Our immobilier simply gave us the name of a guy at the local UBS bank (in Sion). He spoke good English and organised a mortgage, just like in the UK. There's no mystique to the process.
You should be able to just complete an enquiry form and somone from UBS will contact you via email. I daresay the same would apply with most of the local banks, like Reiffessen or Banque Cantonal du Valais - you can probably just walk into one of the branches in Villars.
To be fair, the company was offering to take care of the paperwork involved and actually set up the mortgage on our behalf rather than just introduce us to the bank, but as you say if the process is just as simple as it is here in the UK then there`s no reason why we shouldn`t do this oursleves.
Bear in mind that if you do it through the bank directly, you should also get a Swiss Bank Account for free as well (well, this is the case wuth UBS). This includes on-line banking and a free Debit Card. The web banking is really useful, especially if you're not going to be resident in Switzerland that much. The Debit Card is also a boon, as a surprising number of Swiss shops only take Swiss plastic.
We have just agreed to buy a new appartment in Morgins. Can anyone advise me on what security there is in the Swiss system to protect my money? The stage payments mean that I hand over 70% without actualy getting anything in return. If the thing goes pear-shaped, or even if construction justs stops/slows, what remedies/levers do I have. I know I have a contract with the developer & I can sue them for breach....but the cosntruction monies I assume will have been spent on the build. I also know that the bank will manage the build account so that it only pays bone-fide bills. Is my only option faith & crossed fingers?
I cant even take partial ownership due to the wait for the permit. I dont mind paying the full ammount when finished - becasue at least I will have a full right to use the place, even thought I have to wait for the state to send a bit of paper until I can be the legal owner. It's the bit in the middle that concerns me.
Ian
PS - thanks to all for the other posts on the other threads. Useful stuff.
Are you paying your lump sum payments to a Notary? The Notray in Switzerland acts for both vendor and purchaser, and if your contract is like ours, you should find he holds the deposits/downpayments in his account and only on completion (and usually on condition that you receive your permit to buy also) is the money handed over to the developer. In this way your money should be safe until the development is complete.
Our own contract indicates that if we do not obtain a permit to purchase, the deposit is retuned to us by the Notary (although we do not receive the interest on the amount that may have accumulated). Your contract may be similar - it`s definitely worth checking.
It was the same for us. Our notary handled everything and we transferred the funds from the UK to him, not the agency or seller. The same Notaire later did the legal work when we got a mortgage from UBS in Sion. Also consider making out a Swiss will via the Notaire.
I will double check with the notary. I will be sending the funds via him, but when talking to the bank about the mortgage, I got the impression that the cash will be used to fund the building by the developer & not just sit in the notaries bank account.
The will tip was helpful too - our UK lawyer said the same thing.
I can speak both as a buyer in Nendaz and as a seller of property in Valais.
The reservation deposit you pay on a new build is paid into the Notarys account as at this point you have signed nothing and the notary is protecting your money. This amount is usually 5%.
Once you have signed the Deed of Sale the Notary has in effect completed his/her job and the contract you have is with the developer/constructor.
The phased payments during the new build in Switzerland tend to go:
- 5% Reservation deposit paid Notary's account - Sign Deed of Sale - 5% further deposit to Notary's account to give you the full 10% deposit which is then paid to Constructor. - 20% paid to constructor at start of project - 30% roof on - 30% kitchen installed or plastering - 10% key hand over.
If the project is at the roof stage when you buy for example you will be expected to pay the catch up payment after the 10% deposit within 30 days (ie 50%)
The mortgage redemption fee you pay when taking out your mortgage is a form of protecting your investment and I'd suggest only dealing with constructors/builders that have been trading for a sizeble peiod of time but being Switzerland it is extremly RARE that a builder goes bust or doesn't finish the project.
Never pay anyone a fee for introducing you to a Bank in Switzerland. We introduce clients of ours all the time to the Fortis Bank in Sion as a service during their purchase but dont charge them nor do we get paid for this service by the bank, its illegal.
Dave in your case, I cant remember did you buy a re-sale or off plan? If a re-sale then you would pay all the money into a Notary's account as the Deed of Sale is signed with all money transferred through their account.
We have just agreed to buy a new appartment in Morgins. Can anyone advise me on what security there is in the Swiss system to protect my money?
Should you not understand what happens to your money *before* you agree the purchase?
Your contract should be quite clear about what happens to the money. Get a draft in electronic form and copy it through a translation website into English so you are quite clear about what you are legally agreeing to.
Your notary should be able to answer any questons you have as well.
TopperT: We bought an existing property off a UK owner, and so buying was streamlined, and the license was simply transferred to us. We got a UK mortgage initially, and then got one from UBS Sion to replace it.
I'd absolutely underline that there's no point in going through a third party to get your mortgage. There's nothing that they can do for you that you won't have to do yourself. You should get free banking, a debit card (may be a CHF 20 or so charge for this) and free on-line access from your mortgage provider.
As for the mechanics, you should feel confident from the explanation provided by the Notaire. Even if you have the contract translated, you'd still need a legal expert familiar with Swiss, Cantonal and even Commune laws i.e. an English-speaking Notaire.
It happens from time to time. Just wondering if it's because I asked the Swiss operators for their contact details. I'm guessing they responded and it was frowned upon - just a guess though
Well, the latest question was about prices, if I recall. To which my answer was along the following lines.
Prices in the big UK papers always seem inflated to me, and always seem to refer readers to just the same 3 or 4 big UK-Alpine agencies with property in Verbier, Zermatt, Villars etc.
By contrast, prices in somewhere like La Tzoumaz are about £70K for a 40M2 studio, say £90-£120K for a 2-bedroom 70M2 apartment (underground parking and better facilities take it to the upper end) and around £200-£400K for a chalet (depending on size, obviously). Multiply these numbers by between 2.5 and 4 for the same property in Verbier.
What does surprise me is that prices in relatively small places like Ovronnaz are more M2 than, for example, La Tzoumaz. And while the former is an attractive village with thermal springs, and nice in the summer, it only has about 40Kms of piste compared to 55Kms for La Tzoumaz, which is directly connected to the 400Kms in the rest of the 4 Valleys. My understanding is that this is also true elsewhere in the Valais, so it's probably worth looking around (e.g. Morgins as well as Champery, or the bits around Crans).
My other point was that ths location and open seasons for the telecabines is a key factor. Prices within 200m or less of a chairlift or telecabine are higher for a reason - in winter, it's problemmatic to trudge more than that sort of distance in your skiboots. And isolated locations may be picturesque, but not so great if you arrive at 11pm on a winter's night, or want to go out for a meal or groceries.
Research the open season for the lifts - especially in the summer. They carry both pedestrians and bikes, and hugely extend the area available for walking and cycling. So in our village, for example, all the residents are lobbying hard for the telecabine to be opened longer than just the current July-August period.
Finally, if you do visit La Tzoumaz be aware that the old telecabine is being replaced this summar and won't be running at all. Upside is that we'll have a spanking new 6-seater high-caacity bubble from this winter.
