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PROPERTY

Buying property in Switzerland: Can foreign nationals get a mortgage?

If you are a foreign national and want to buy property in Switzerland, you may be wondering whether you are eligible for mortgage. The answer depends on several factors.

Published: 22 August 2022 16:41 CEST
Updated: 22 November 2023 14:46 CET
Buying property in Switzerland: Can foreign nationals get a mortgage?
Depending on your passport, you may need permission to apply for a Swiss mortgage. Image by Randy Jost from Pixabay

The most important condition for being able to obtain a Swiss mortgage is your residency status. So the question should be not whether you qualify for a mortgage but, rather, if you can purchase property in Switzerland in the first place.

Logically, if you are allowed to buy a house or an apartment in Switzerland, then you can apply for a mortgage as well.

Who can and can’t buy a house / get a mortgage?

A citizen of an EU / EFTA state can freely purchase real estate (home or land) in Switzerland. This applies to both primary residence and holiday homes.

The same is true for third-country citizens, say US or UK nationals, who have a valid permanent residency B or C status — there are no restrictions placed on them either.

However, rules are in place for people from outside Europe who don’t have either of the two above-mentioned residency permits.
They will need a permission to purchase housing in Switzerland — a measure intended to prevent Swiss properties from falling into foreign hands.  

Additionally, they can only buy a house which will be used as the primary residence — this means that they can’t buy it as an investment and rent it out.

And if you are a cross-border worker in Switzerland (G permit), you can buy a second home in the vicinity of your  place of employment without authorisation. However, you are not allowed to rent out this property for as as long as you work in the region as a cross-border commuter.  

Conditions are even stricter if you a foreigner living abroad — rules for such purchases are set out in a law called Lex Koller and are quite complex.

Unless you are looking to buy holiday homes in Appenzell Ausserrhoden, Bern, Freiburg, Glarus, Grisons, Jura, Lucerne, Neuchâtel, Nidwalden, Obwalden, St. Gallen, Schaffhausen, Schwyz, Ticino, Uri, Vaud and Valais, you will need a special permission as well.

READ MORE: ‘Lex Koller’: What are Switzerland’s rules for foreigners buying property?
 

Where can you ask for authorisation to buy a house?

If you are among those who need a special permission to own a house, you should apply for permission to cantonal authorities in the municipality where the property located.

Page 13 of this PDF document indicates contact addresses for each canton.  Officials will indicate what paperwork you need to submit for consideration of your case.

What about mortgages?

Needless to say, if your application is rejected, you will not be given a mortgage either.

If it is approved, then you can apply in pretty much the same way as Swiss citizens do, though you will be asked to provide additional documents, such as your work / residency permit, for example, along with the canton’s authorisation.

From then on, it is up to you and your financial abilities to choose the mortgage that suits you best from among several types available in Switzerland, such as SARON and LIBOR mortages, which are detailed here:

EXPLAINED: What is Switzerland’s ‘SARON’ mortgage

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PROPERTY

Why renters in Switzerland still struggle to buy an apartment

Prices of properties in Switzerland are out of reach of most residents and they may continue to be so in the near future.

Published: 12 April 2024 10:47 CEST
Why renters in Switzerland still struggle to buy an apartment

It is a well known fact that more people in Switzerland are tenants than homeowners, and it all comes down to money. 

This is confirmed by yer another study, by UBS bank, which found that fewer and fewer households can still afford to buy a house or apartment. 

While 20 years ago, 60 percent of households in Switzerland could still afford to purchase property, today the percentage of residents owning property valued at 880,000 francs or more dropped to merely 15 percent.

READ ALSO: Why do so many in Switzerland rent rather than buy a home

In order to afford cheaper properties, people have been moving from cities to the suburbs, where homes had typically been less expensive, but the growing demand in those regions has increased the prices there as well.

And short-term outlook is not favourable either: UBS experts expect the prices of apartments to increase by another 1.5 percent this year, and 1 percent for single-family houses.

This may not seem like much, but if a property costs 1 million francs or more (a usual price in major cities), the 1 or 1.5 percent adds up to a lot of money.

Why are properties getting more expensive in Switzerland?

There are number of reasons for this phenomenon, including scarcity of land for new constructions, the steadily high demand, and inflation, among other reasons.

How much do you need to earn to afford a property these days?

READ ALSO: Can foreign nationals in Switzerland get a mortgage? 

As prices vary from one region, and even from one town to another, the income you’d need depends on where you live.

In Geneva or Zurich areas, for instance, where housing is notoriously expensive, a household would need a gross income of 300,000 francs a year to buy a home or an apartment, though in traditionally cheaper regions like Jura, Neuchâtel, Ticino, or some areas of central Switzerland, an annual salary of between 100,000 and 200,000 francs may suffice.

What is the forecast for residential properties the future?

READ ALSO: Why living in Switzerland’s smaller towns beats the bigger cities

More price increases are expected from 2025.

This hike would be driven by the economic recovery as well as the general housing shortage.

UBS pointed out that as long as there are enough potential buyers, prices will continue to rise.

And it is a fact that the demand for houses and apartments is still there, despite the cost.

On the one hand, that is because an increasing number of wealthy people from abroad are settling in Switzerland. 

And on the other, because the income of people belonging to the upper class has increased.

READ ALSO: Where in Switzerland property prices are rising the fastest

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