SHARE
COPY LINK
For members

LIVING IN SWITZERLAND

Reader question: Does buying a home make financial sense in Switzerland?

Switzerland has the lowest home ownership rate in Europe. Does it make sense to buy a house or apartment?

A small wooden house on the grass
Does it make sense to buy property in Switzerland? Image: Pixabay

Less than 50 percent of Swiss residents own their home, making it the only country in Europe where more than half of the country rents. 

The reasons for this are many and varied, from high house prices to a large foreign population who live in the country on a medium-term basis. 

But for those who are thinking of buying a home in Switzerland – whether on a short or long-term basis, or as an investment – there are several questions to answer. 

Here’s an overview of the biggest issues and questions you should consider when thinking of buying a home in Switzerland. 

Do Swiss really prefer to rent than buy?

Approximately 59 percent of Swiss people rent – making it the highest percentage of renters anywhere in Europe. 

One misnomer in considering renting and buying is that in many cases people in Switzerland and other parts of Europe where rental rates are higher is that they “prefer” to rent. 

Successive studies have shown that high numbers – i.e. above 80 percent – of people would prefer to own their own home rather than rent. 

The high percentage of renters is instead probably more accurately described as people being ‘content to rent’, rather than actually preferring it.

Another factor is the number of foreigners who are only in Switzerland for the medium term. 

Around one quarter of the Swiss resident population is foreign. 

While it is difficult to determine how many of those do not see themselves staying long term, Switzerland’s strong employment sector and difficult naturalisation processes often act as a barrier to settling. 

COMPARE: Which European countries have the toughest rules for gaining citizenship?

With buying a home seen as a major sign of a long-term commitment, it is clear that this plays a role. 

Is buying a home in Switzerland a good decision?

Whether buying a home in Switzerland or anywhere is right for you will depend on your specific circumstances. 

One surprise for new arrivals – particularly those from English speaking countries – is the strength of tenants rights protection laws in Switzerland. 

In Switzerland, tenants are typically given long-term leases with significant permission to change and alter aspects of the house or apartment. 

There are also restrictions on rent increases in some parts of the country. 

READ MORE: What are The Local Switzerland’s reader questions?

Tax is another factor which can discourage people from purchasing a home. 

Despite its reputation, Switzerland’s income tax rates are not as high as some might expect. Other taxes are however quite high in comparison – and contribute to the Swiss being more content to rent than people in other countries. 

Some cantons allow rent to be deducted from tax, while cantons also provide subsidies for renters in some situations. 

Researchers Bourassa and Hoesli write that “income tax rules in Switzerland seem less favourable to home ownership” than those in the United States and elsewhere. 

This sometimes amounts to a high percentage of the overall cost (i.e. as high as 3.4 percent in Geneva). 

Swiss home owners on the other hand are often hit with taxes, including income tax, property tax and capital gains tax. 

Several Swiss cantons also levy a wealth tax, which disproportionately hits home owners. 

Will anything change in the future? 

One important factor to consider is whether you are buying a home purely as an investment, or whether you intend to live there. 

A consequence of the stronger tenancy laws and lower rates of home ownership is that property becomes a less attractive option for investors, which in turn means fewer properties are built. 

But while Switzerland may not be a property investor paradise, buying a home can still be a good investment in comparison to renting, as investing is not the sole purpose of the purchase. 

Recent interest rate rises haven’t quelled rising demand for properties, nor has the impact of the pandemic. 

Speaking with Swiss news organisation Tamedia, property expert Patrick Schnorf said demand is set to continue. 

“We assume that due to immigration, high birth rates and household divisions, demand will remain the same in the near future,” Schnorf said. 

“People have saved a lot (during the Covid pandemic), many have a secure income, these are the driving factors.”

In fact, the Covid pandemic has not dampened demand, but has channeled it towards a different type of property. 

Larger properties with more rooms and gardens have seen greater demand as a consequence of lockdowns and working from home requirements 

“The radius of the real estate search has therefore also extended to the surrounding rural regions,” explained Schnorf.

READ MORE: What does the coronavirus mean for Switzerland’s property market?

While lockdowns look to be over and the working from home rules have come to an end, experts argue that some of these changes are more than mere trends and are likely to be permanent.

Think we’ve missed something? Got something to add? Have you bought a place in Switzerland or are you thinking about it? Get in touch at [email protected].

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

FAMILY

EXPLAINED: Why so many baby names are banned in Switzerland

These days, it’s not just celebrities who seem to have a penchant for ruining their child’s life by bestowing him or her with an odd moniker. In Switzerland however, there are several rules about what you can - and cannot - name your child.

EXPLAINED: Why so many baby names are banned in Switzerland

Whether its hanging out your washing on a Sunday or flushing your toilet after 10pm at night, Switzerland has several rules which can be surprising to foreigners. 

One such example is what you are allowed to name your kids.  

While from time to time, parents’ failed attempt to give their child a unique name might make the news, there are in fact an extensive variety of rules about which names can actually be chosen in Switzerland.

Sticklers for the law as they are, the Swiss have several rules controlling what baby names can be given. 

No names which will damage a child’s well-being

Although this appears incredibly difficult to define, there are several actual examples which have been rejected for breaching the well-being rule. 

In considering this, Swiss authorities will look at whether “the child will be exposed to ridicule because of its name.”

This includes ‘Grandma’, ‘Rose Heart’, ‘Prince Valiant’ and ‘Puhbert’. 

REVEALED: The most popular baby name in each Swiss canton

They specifically prohibit giving your kid a name which will damage his or her “well-being”. Names aren’t allowed to be offensive either. 

Twins

Twins must not have names that are too similar to each other. 

The names must not be either spelt or pronounced in the same way. 

Swiss media gives the example of calling two boys “Philip” and “Philipe”. 

No villain names

Switzerland – or at least large parts of it – remain relatively religious, which is probably why choosing a bible villain name for your child is verboten. 

Newspaper Telebasel reports that the name Judas has already been rejected by Swiss registry offices – and will likely be rejected again. Satan, Cain and Lucifer are also banned. 

Boys are boys, girls are girls

Ever the traditionalists, Switzerland has tight gender rules for naming children. 

Specifically, a name must clearly indicate a person’s gender. 

Girls cannot be given a boy’s name and vice versa. 

If a name does not clearly indicate the person’s gender, then the child must be given a hyphenated double name or a second name to make this clear. 

Numbers or letters

In 2017, a Swiss court said ‘J’ was not appropriate as a middle name. 

The court held that allowing ‘J’ would be similar to letting people have a name made up of numbers – although ‘Jay’ a la Homer ‘Jay’ Simpson would presumably be fine. 

No place names

While the world might be debating how to cater to non-binary people who want to be identified as ‘their’, identifying as ‘there’ is a big no go in Switzerland. 

Place names for people are forbidden in Switzerland. 

This may not be interpreted incredibly strictly – Dakota Fanning and Brooklyn Beckham will be OK for now – but if you want to name your little boy ‘Matterhorn’ you may come across some resistance. 

READ MORE: How much does it cost to raise a child in Switzerland?

No product names either

No matter how much you love a particular product, you will be prevented from honouring the brand by naming your child after it. 

That means Ovaltine, Rivella, Chanel or Ferrari are off the table. 

You’re also banned from naming your child after a plant or after an animal. 

What about foreign names? 

One major question – particularly among Local readers – is whether foreign names are banned. 

The main question is whether the name appears in the ‘Internationalen Handbuch der Vornamen’ – the International Handbook of First Names. 

This book – which does not appear to exist in English – expressly lists acceptable first names. 

If it appears in the book, it’s OK with Swiss authorities. 

Which names have actually been banned in Switzerland? 

Suissebook has listed several baby names which have been banned in Switzerland for breaking at least one of the rules listed above. 

In addition to all of those mentioned so far in this article, it includes Bierstubl (place name), Troublemaker (well-being), Mercedes (brand name) and Sputnik (not sure if that is a place or a thing, but either way it’s banned).

SHOW COMMENTS