Buying a flat in Switzerland

Accomodation, House and Garden
1
So... looking (for ages) to buy a nice flat (Lugano area).

Done with being lazy and now actively on the market. Browsing through all the typical real estate sites each day and have found a place I like a LOT for around 800.000 CHF

Questions:

* is it "acceptable" to put in a lower bid in Switzerland?

* do buyers pay a fee to the real estate person advertising the property or is that fee for the seller?

* what % taxes etc. come on top of the purchase price?

* any other (hidden) costs that I might be missing?

Thanks,

Cheese Lover

2
Do you have 20% to put as downpayment?

3
go down to the bottom of this page. your questions are all answered there.

Welcome to the forum!

4
Yes I do, the benefit of managing an exit package from my previous employer - thank you very much!

5

You can put whatever offer you like in, but theres no obligation for the seller to accept ! You need 2 to make a deal and as we are in a sellers' market there is not much incentive to reduce the price. In Switzelrand a lot of people have "sufficiant money" and don't need to sell for the money so you get property that takes ages to sell.

6
Yeah, that thought occured to me. The place I am looking at was renovated several years ago and still a few appartments are not sold. Equally, some of the first buyers are now reselling. All in all, roughly 40 or so flats in the building and 6-7 are on sale on any given moment in time. The good thing is it's easy to track/compare prices online.

7
Welcome to the forum.

What Anthony says, read the "similar threads" at the bottom and use the search function, loads of good info already here.

8
Thanks all - my takeaways so far also from other threads:

* mostly a sellers market (not due to lack of supply, but due to tax system favoring ownership)

* 20% downpayment required by most banks

* another 3-5% in fees (notary, etc.)

9
yes that is why not to many people here buy. and the housing market is quit stable here so no real profit when selling unless you look over years and years

10
I understand appreciation is slow, on the other hand the interest rates are very low as well and with the tax breaks, buying appears to be a fairly decent deal.

800k flat - 200k downpayment = 600k

1.5% interest per year on 600k = 9k (i.e. assuming pure interest mortgage)

9k /12 = 750/month

Honestly, I'd be surprised (but I admit to not knowing Switzerland very well) if I could rent an 800k flat for 750 a month. Buying sounds like a good deal to me, as long as you are able to fork up the downpayment.

11
well that be 750+ however much you loaned from the bank right.

But I do know people who pay 1600 for a nice 3^-4 room apartment while I pay 1500 2.5 bedroom but in the end it is not mine....If I had the down payment id be on the other side of that also.

12
But don't forget you have an additional tax burden with ownership - this is usally balanced by mortgage interest though. All repairs are yours, al the painting must be done by you etc etc.

Having bought here a few years back, I have to say it's great. Mainly because we can paint the walls when we want, we can do laundry when we want, we have a small garden - it's really cool to call a place a home. I didn't have that when renting here the first x years.

13
This would worry me here - close to 20% of the building is up for sale on a regular basis? Somewhere else this may be usual but in a country where people do not tend to move all that often, and certainly not sell on a regular basis, this would make me a little concerned and wonder what's wrong with the building.

14
It is a seller market...and difficult one...

Smell the facts...and do what you feel!

No cookbook is available....

15
You said:

800k flat - 200k downpayment = 600k

1.5% interest per year on 600k = 9k (i.e. assuming pure interest mortgage)

9k /12 = 750/month

Honestly, I'd be surprised (but I admit to not knowing Switzerland very well) if I could rent an 800k flat for 750 a month

Just be a little cautious about that.

1. 1.5% is a historically low interest rate which is expected to start rising soon - look back a few years at the way rates climbed steeply before crashing again and make sure you can afford it when rates hit e.g. 5% (standard long term average used by mortgage companies to assess you) - if your payments at this rate would then exceed >30% of your earnings you're unlikely to get a mortgage approved anyway. Don't forget if interest rates rise above what you can afford, getting out of the deal can be difficult as house prices tend to stagnate or fall in that scenario, and in switzerland properties can take many months to sell in normal times.

2. you will normally be expected to amortise (pay off) approx. 1% of the purchase price each year so that after 15 years you only have a 65% mortgage (varies depending on deposit amount etc.) you didn't include that cost in your calculation (could be 500-1000 per month extra, which for some people is significant)

3. don't forget, what you pay each month for your apartment will already include buildings insurance costs, heating, water etc. When buying you will have to pay all these in addition to the interest and amortisation payments, and the level will typically be higher e.g. maybe you pay 200 pcm towards heating, water etc. - likely to be more in your own place (esp. if buying a house rather than apartment in a block) unless you have a very modern build

16

indeed capital gains are not that great unless it is over several years. I heard there is a penalty as well if the house is sold before x ( ?) years.