The Hidden Rules of Swiss Real Estate
What You Need to Know Before You Move
There are countries you visit, and there are countries that change you. Switzerland is one of the latter. The first time you set foot here, you might notice the snow-capped mountains, the clean streets, the quiet efficiency of its trains. But the deeper you look, the more you realise that this little Alpine nation plays by its own rules—especially when it comes to property and real estate.
If you’re planning a move to Switzerland, real estate will inevitably become a huge part of the conversation. The home you have now, the home you might buy here, the legal and tax framework around property—it all matters. And it’s not like anywhere else.
Over the years, I’ve met countless people dreaming about building a life here. I’ve also seen the shock on their faces when they discover how differently the Swiss treat property ownership, taxation, and even the financing of their homes. What I’m about to share with you could save you from expensive mistakes—and might just open your eyes to the strategies that make Switzerland such an unusual, and at times brilliant, place to own property.
The First Surprise: Foreign Property Doesn’t Bite You
Let’s start with something that surprises almost everyone—what happens to your property outside Switzerland when you move here.
Many countries will tax you on your worldwide assets. Your rental income from an apartment in Spain? Taxable. Your holiday home in Florida? Taxable. Even the capital gain when you sell those properties? Taxable.
Switzerland, by contrast, takes a softer approach. Foreign property is generally exempt from Swiss wealth tax and income tax. If you own a villa in Portugal or an apartment in Dubai, you won’t pay Swiss tax on the rent you collect or the profit you make when you sell.
There is one catch: the progression proviso. You still have to declare these properties and their income in your Swiss tax return—not to tax them directly, but to help determine the tax rate applied to your other Swiss-based income and wealth. In other words, that foreign property can push you into a higher tax bracket, but the property itself remains untouched.
This is a subtle distinction, but it’s one of the reasons Switzerland attracts globally mobile entrepreneurs and investors. They can keep their international holdings without getting hit twice.
The Second Surprise: The “Lex Koller” Barrier
Now comes the part that can frustrate newcomers: foreigners can’t just buy any property they like in Switzerland.
The “Lex Koller” law exists to prevent what the Swiss call “Überfremdung”—a flood of foreign ownership that could drive locals out of the market. If you’re not a Swiss resident, your buying options are severely limited.
There are exceptions:
You can often buy a holiday apartment, but the supply is tiny—sometimes just a handful of units per canton each year. And they’re usually far more expensive than equivalent primary residences.
If you move to Switzerland and have the right residency permit, you can buy your primary home freely. But this freedom only applies to your main residence, not to investment properties or second homes.
Countries like Thailand and the Philippines have similar restrictions, but in Switzerland, the rules are ruthlessly enforced. You can’t get around them by setting up a holding company or using a Swiss corporation. If you’re foreign, you’re playing by Lex Koller’s rules.
The Swiss Mortgage Mindset: Never Fully Pay It Off
In most countries, owning your home outright is a point of pride. In Switzerland, it’s almost the opposite. The Swiss rarely pay off their mortgages completely.
Why? Two main reasons:
Wealth tax optimisation – Wealth tax in Switzerland applies to your net worth. If your home is worth CHF 3 million and you owe CHF 2 million on it, you’re taxed only on the net CHF 1 million. Keep a large mortgage, keep your taxable wealth lower.
Eigenmietwert (Deemed Rental Value) – Here’s the twist that shocks foreigners. If you live in your own home, the government assigns it a hypothetical rental value—the amount you could earn if you rented it out—and taxes you on that “income.” But you can deduct your mortgage interest from this amount. So keeping a mortgage can wipe out most or all of that taxable “phantom” income.
For many Swiss homeowners, leaving 65% of the property financed is a perfectly logical financial strategy. It’s not about debt—it’s about tax efficiency.
Selling Property: No Escaping the Tax Man
Another rude awakening for newcomers: in Switzerland, there’s no “sell after X years and avoid tax” loophole like in some countries.
When you sell a property here, the profit (not the total sale price, just the gain) is always taxable. The tax rate can be brutal—up to 50% if you sell within a couple of years of buying. Hold the property longer and the rate drops, sometimes down to 20% or less after many years.
The exact rate and rules vary dramatically from canton to canton. In Switzerland, tax is not just a national issue—it’s a cantonal and even municipal one. That means moving just a few kilometres could halve your tax bill.
Transaction Costs: Surprisingly Low
Here’s a bit of good news: Swiss property transaction costs are often lower than in many other countries.
Notary and land registry fees typically run around 1% of the purchase price.
Many cantons have no transfer tax at all. In places like Zurich and Schwyz, you can skip it entirely.
In other cantons, the transfer tax is usually 2–3%, which is still low compared to some countries.
This might not offset the high cost of Swiss real estate itself—prices here are famously eye-watering—but it’s a small mercy in a system where other costs can pile up fast.
Inheritance and Gifts: A Canton-by-Canton Story
Nationally, Switzerland has no federal inheritance or gift tax. But at the cantonal level, the story changes.
Some cantons—again, Zurich and Schwyz are good examples—have no inheritance or gift tax at all, even for unrelated heirs. Others have taxes but exempt transfers to direct family. Still others will tax even close relatives.
One thing that’s consistent: if property changes hands, you’ll still have to deal with the Handänderungssteuer (transfer tax), even if the transfer is via inheritance or gift.
Switzerland’s Property Market: More Than Numbers
All of these rules—the Lex Koller restrictions, the Eigenmietwert, the mortgage norms—are not just technicalities. They’re the architecture of a national mindset.
Switzerland values stability over speculation. Property is not treated as a quick profit vehicle, but as a long-term commitment. Laws are designed to keep ownership balanced, to prevent foreign overreach, to ensure the tax system stays robust.
For someone moving here, this can feel frustrating. You might see a dream chalet in the Alps and find you’re not allowed to buy it. You might think paying tax on a home you live in is insane. You might balk at the idea of never paying off a mortgage.
But if you step back, you start to see the logic. These rules have helped Switzerland avoid the property bubbles that have ravaged other countries. They’ve kept homeownership rates stable. They’ve ensured that wealth—whether in bricks, land, or bank accounts—remains integrated into the tax system.
The Emotional Side of Buying in Switzerland
Buying a home anywhere is emotional. Buying one in Switzerland is even more so, because you’re not just buying a structure—you’re buying into a way of life that is fiercely protected.
I’ve seen clients walk away from deals because the numbers didn’t work. I’ve also seen them buy anyway because the view from the balcony at sunrise made them feel something no spreadsheet could capture.
And perhaps that’s the real takeaway here. Yes, you must know the rules. Yes, you must get professional advice (in Switzerland, more than almost anywhere else). But ultimately, your home here will be part of your identity. Whether it’s a sleek apartment in Zurich, a lakeside villa in Lugano, or a mountain retreat in Graubünden, it will shape your experience of Switzerland itself.
My Advice: Don’t Go It Alone
Real estate in Switzerland is a minefield if you try to navigate it without guidance. Between the tax nuances, the cantonal differences, and the rigid ownership rules, a wrong move can cost you dearly.
That’s why I tell anyone considering a move: build your team before you buy. That means a top-tier local lawyer, a tax adviser who understands both Swiss and international rules, and—if you’re serious about investment—a mortgage broker who knows how to structure debt in the Swiss style.
The beauty of Switzerland is that once you’ve done it right, you can enjoy one of the most stable, secure, and beautiful real estate environments in the world. But you can’t skip the groundwork.
Consultation
If you’re ready to explore a move to Switzerland—or if you’re already here and wondering how to optimise your property strategy—now is the time to get expert help. My team and I have worked with entrepreneurs, investors, and families for nearly two decades, guiding them through international moves, wealth protection, and tax optimisation.
Switzerland rewards those who prepare. Let’s make sure you’re one of them.
