Switzerland is appealing to the international community because of its overall economic and political stability, well-protected natural sceneries, world-class education system, and low crime rates. With that comes a strong demand from foreign buyers to purchase a residential property for their own use or for investment diversification purposes. The purchase of residential properties in Switzerland comes with its challenges for foreign buyers. How hard is it to buy a residential or holiday home in Switzerland if you are not Swiss? Very hard. In fact, almost impossible without a permit. Unlike other Alpine countries such as France and Austria, Switzerland is not part of the EU and has enacted laws restricting foreign property acquisition.
In Switzerland, the Lex Koller rule is a long-standing law that essentially bars foreign property acquisition subject to a permit. Lex Koller distinguishes between categories of real estate such as a commercial and residential and types of purchasers. Hence, a person looking to relocate to Switzerland is different from a person who wants to buy a holiday home. Alpine holiday homes are slightly less challenging to purchase, but only 1500 permits shared between the various cantons are granted to foreign buyers each year. Other restrictions differ from area to area, but certain regions prohibit the reselling of a property owned by a foreign national if it has been held for less than five years. In other developments, foreign buyers can only buy residences from other foreign buyers. A foreign buyer may buy an apartment in a third area but only if foreign occupancy is less than 50%.
Subsequently, Switzerland passed the Lex Weber Referendum in 2012. This law prohibits new builds of holiday homes where 20% or more of the area’s residential properties are already holiday homes. This basically means that new holiday homes cannot be built in popular ski- resorts as these areas already have a high number of second homes. Since this law led to less second homes being built, further restrictions were imposed on foreign acquisition to ensure that Swiss buyers are not pushed out of the market.
The bottom line is that buying a residential property in Switzerland is an exclusive once-in-a-lifetime opportunity for foreign buyers due to these laws’ existence. It certainly is difficult, but this article is the bearer of excellent news.
A renowned Swiss developer has transformed a scenic mountain village in Central Switzerland into the ultimate year-round Alpine destination. Nestled within a striking valley in the heart of the Alps and boasting an 18-hole championship golf course, luxury hotels, apartments, and exclusive chalets, it is an unbeatable skiing destination in the winter and an impeccable summer retreat. A significant redevelopment of the ski area is taking place alongside this project, which will connect this mountain village to its neighbours. In a seamless blending of old and new, this resort has been flawlessly integrated into the historical town, resulting in world-class facilities set in rural mountain charm.
And now for the excellent news: This development has managed to secure an exemption from the Lex Koller Law, thus allowing foreign nationals to buy residential properties within the resort without a permit. Property restrictions that exist throughout Switzerland regarding foreign buyers have also been lifted for this particular project. There are no quotas for foreign owners, no size restrictions, nor any minimum holding time before foreign buyers can resell. To top it all, this development is exempt from the Lex Weber Referendum, which puts a cap on constructing second homes at the 20% mark of the total number of properties built. This means that local interest in this development is also high.
These exemptions are unique because the Federal government never grants them, and it is predicted that they will not be granted again in the near future. This essentially means that the development in question is the only area in Switzerland where foreign buyers are free to buy Swiss properties without any restrictions whatsoever.
As a result of these exemptions, interest in this particular development is, understandably, great and a large percentage of investors are foreign nationals. So, why is this Swiss project precious within the international market?
Here are eight compelling factors non-Swiss investors are considering when investing in this development:
1. Switzerland as a safe haven for real estate investments: The stability of the Swiss housing market and the stable Swiss franc are appealing factors when considering a property investment opportunity. Further, the Alpine town in question has seen a highly dynamic growth since the inception of this project.
2. Low density and natural areas are high in demand: The increasing demand for properties in low-density locations with more green spaces and less housing units on a piece of land results from COVID lockdowns, and the trend is growing. Considered a low-density area, this project is set in a mountain village in the middle of the Swiss Alps and gives homeowners and visitors alike direct access to nature in both summer and winter. With sweeping views of the valley, residents will be able to experience a snow-blanketed Alpine winter and a vibrant summer amidst endless greenery.
3. High demand throughout the Pandemic: Sale prices have increased by 16 % since 2018. Further growth is forecasted as sale prices remain favourable compared to competing resorts. The increase in sale volume and price rises was also evident in 2020, despite the COVID pandemic.
4. A once-in-a-lifetime opportunity: This is the only Swiss project that allows foreign buyers to buy residences without the permit requirement or any other restriction to speak of. Irrespective of nationality and residency, foreign buyers may buy and sell apartments and houses freely within this project, particularly rare. They may also trade with no minimum holding time.
5. Long-term value growth of assets: The demand for real estate in this Alpine village has grown exponentially since the inception of the real estate project in 2012. Ninety per cent of the completed inventory is sold with over CHF 500M in sales to date. The result is a steady capital appreciation of 6% within the last five years.
6. Upside potential for rental yields: Due to a substantial undersupply of rental accommodation, this project offers a unique investment opportunity for investors seeking yield-generating properties. The developer provides guaranteed Return on Investment for selected properties ensuring steady returns.
7. Strategic Location: Supported by a robust road, train and air travel infrastructure, Zurich and Milan are reachable within 1.5 to 2 hours. Transfer times from Luzern and its neighbouring private airport are available within 45 minutes.
8. All-year-round destination: Listed as the best performer in the Savills “Ski Resilience Index”, this project is a snow-safe resort with a long ski season throughout the winter. Combining a state-of-the-art skiing infrastructure with the elegant simplicity of endless meadows and hiking trails, this charming Alpine village is rightly a year-round destination, attracting visitors throughout the seasons for both leisure and business.
A rare window of opportunity – the time is now!
The combination of this rare buying opportunity with the picturesque nature offered on the table makes this development a winning combination. Further investments, designed to create value for property owners and visitors alike, are planned across the different sectors within this destination that has already seen a transformative change over the last ten years. The properties on offer include chalets, luxury apartments, penthouses, and world-class hotel-serviced apartments and can be bought freehold. There is also a rental scheme with guaranteed rental yields available to buyers seeking an investment opportunity.
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We are looking forward to welcoming you to Switzerland!