Switzerland is a small country with limited area of usable land. In consequence the acquisition of property in Switzerland by persons residing abroad requires a permit. Decisions of such permits are made by the cantons. Person resident abroad must apply for a permit to the relevant authorities. This may be done after the conclusion of a legal transaction, but the permit must be obtained before its execution.
Foreigners can invest in HLM buildings in some cantons. These are new apartment buildings with below-market rentals. You will be exempted from local taxes for a period of up to 20 years after which you will be allowed to raise the rents.
If, after studying the investment, you want to go ahead with the purchase, you must sign a convention with the seller stating that you want to buy the property. Finally, the sale will be authenticated by a certified notary public who records the change of ownership in the Swiss retail property record book – registre foncier.
A solicitor/lawyer is recommended to protect your interests and conveyance the property title when buying real estate in Switzerland They will be in addition to the Notary who is mandatory for property transactions.
There is nothing comparable to the British Stamp Duty on property deals, but a cantonal tax is imposed on corresponding profits. As so much in Switzerland, this varies from canton to canton, as does their division between seller and buyer.
CAPITAL GAINS TAX
Due to the federal structure of Switzerland there is no centralized tax system, with some taxes being levied exclusively by federal authorities whereas others are levied by the cantons, the communes and the federal authorities concurrently. Even among the cantons there are significant differences in both the taxes levied and the rates payable though there is current legislation that aims to reduce these differences.
There is capital gains tax on real estate transactions averaging 18%, and a capital transfer tax on real estate transactions averaging 4% – however there are wide variations between cantons.