Hi, I have a high end 3.5 room apartment in central Basel that I've decided to sell as I am looking to leave Switzerland. It's 3.5 years old and I've lived in it for 3 years. I'd be very appreciative on any guidance on this topic please in terms of points to be aware of and pitfalls to avoid. I had planned to have Engel & Volkers and maybe another estate agent come and do a valuation and then go from there. I am vaguely aware that selling in less that 5 years has some kind of penalty as does terminating the mortgages with the bank, a colleague mentioned that it is possible to sell the mortgages remaining to the buyer. It has increased at least 20% in value since I bought it, I will be happy to walk away with the amount I invested in it in the down payment, I didn't buy it to make a profit, but I understand there is also some tax to pay on any profit. I'd just be extremely grateful if anyone can shed any light on this whole topic. The good news is it is the kind of propety that is in great demand and should sell fast and I am not racing to sell it but would like to leave Switzerland and have it done and dusted by the end of the year. Thank you so much for any advice.
From the following link (in German), it looks to me that the tax you pay on any profit from the sale will be 60% if you have owned it for 3 years. You can deduct from the profits the cost of sales (eg agent costs) and any investments you have made (new kitchen etc.) . . .
Ouch, 60% ....strewth, thank you for that link, it was a very informative read. i knew it wouldn't be cheap but I can't stay somewhere just for tax reasons, I'll need to take this one on the chin and hope I walk away with no losses...
Good question and thanks for raising it - i thought extremely briefly about the renting it out option but it is gorgeous and either I live in it or I sell it. Thankfully it won't be hard to sell. I don't want the stress or hassle of being a landlady, i'd rather be done and dusted of it and get my money out... However much of a hit that ends up being. I fear the whole thing could end up being an expensive lesson learnt
Could well do as the whole idea is to stop people making quick profits by selling early. The longer you can hang on to it the better it’ll be for your wallet. Just hope you make something on your investment to help you in setting up your next place. Have you thought about having an agency act as your representative and they’d let it out for you?
I really don't want to rent it out, even with an agent taking care of it, although that is a good idea and I appreciate you mentioning it. I didn't buy it to make a profit, I thought I would stay in Basel for a long time so it was a considered decison when I bought it but life changes... I don't want to transfer the mortgage or buy another place, I prefer the freedom and flexibiblity of renting, wherever I end up
Highly recommend you hire a property manager and rent it out. Will be more cost effective to you in the long run. You should be able to get cash flow each month by having the renter pay your mortgage and you pocketing a percentage of the cash each month, after you pay your property taxes and insurance and your 4% to your property manager. Property goes up quick quickly here in CH although you should not consider this as part of your strategy. Personally, I would not recommend selling it.
You can either get an agent to value it and sell it for you. It looks like this is what you are doing and is one option. Another is to just stick it on Homegate yourself and see what happens.
It depends how much hassle you want and how much % you want to give away to the agent who will basically just put it on homegate for you.
I understand wanting to be "done" with it, but I will say that if you can get a good property manager then you essentially WILL be done with it - except for the money coming into your account every month (assuming that you can get more than the mortgage?).
I'm renting out my house in the States and it is nice to know that it is there, making me a little money and yet could be sold at any time. If five years is the magic time to not lose 60%, then that mean you'd only have 1.5 years of rental time to cover. It might be worth looking into.
I've looked into renting our house rather than selling, as property prices in my area have fallen to the point where the house is now down to what we bought it for 10 years ago. (Without figuring in the 50% additional I put into renovating it, little of which is deductable as it has amortized...)
Anyway, the monthly (flat) fee a property manager in our area charges is about 40% of the rent this type of property is going for. Add in maintenance, taxes, etc., and I can't see any benefit to hanging on to the property, especially as since I am non-EU I will not be able to come back to Switzerland and use the property in the future. To my mind, owning property in Switzerland when no longer resident here would be akin to carrying dead weight.
Perhaps property managers in Basel charge less than they do here, but I will be better off taking the loss* and getting on with my life.
* Fortunately what I have saved on mortgage payments vs rent, and on taxes, means that I break even overall, although I will sell the property at a loss.
You certainly could do it yourself - as long as you are still resident in Switzerland or are still close enough to be able to respond in a tmely fashion to any issue that comes up and have the necessary skills.
(And are willing to put up with the headaches that a tenant brings.)
If one is an ocean away, though, it's often best to have someone on the spot who is authorized to act when necessary.
Also - check with the bank holding the mortgage and with the insurance company providing coverage. When the property is no longer owner occupied, you might find that either or both require professional management.
Totally agree and that someone must be someone you can trust, handy at fixing minor issues and more importantly have common sense. Otherwise it will be very costly if local tradersmen get involved with issues that could be easily resolved.