Buying a Holiday Home in Switzerland

14.03.2017, 13:59

Hi all,

Me and a couple of friends have been discussing the idea of buying a 2 bed holiday flat in one of the Swiss ski resorts, main reason being to use and enjoy our savings rather than leave it sat in a bank earning very little interest. We would consider renting the property when not being used but this is open to discussion. Two of us already have mortgages on homes in Switzerland but the third not. I understand that a couple of years ago new laws were introduced to prevent the trend of holiday homes being bought up around the country but I'm not sure if this completely rules-out the option - any experts out there that can advise on the restrictions we may face from a legal perspective?

I'm always interested to hear from the people on the forum but additionally we will need to appoint somebody to officially advise and execute should we go ahead � would be great if anyone has a contact they could recommend��.

Many thanks in advance!

14.03.2017, 14:13

Nice idea, but I fear you will be way out of pocket at the end of the year, and how many weeks skiing will you get if say 6 of you are sharing the flat?

Think about buying blue chip stocks, and using AirBnB, you could all ski together then.

14.03.2017, 14:30

Quote:

Sbrinz

Nice idea, but I fear you will be way out of pocket at the end of the year, and how many weeks skiing will you get if say 6 of you are sharing the flat?

Think about buying blue chip stocks, and using AirBnB, you could all ski together then.

Hi Sbrinz,

Thanks for your reply and I take your point. We would use the place year-round (separately) and not just for skiing so I imagine we would get a fair amount use out of it � we all have families and live within 1.5 hours drive.

Anyway, I'll try and steer away from the pros and cons of the idea itself, as I'm sure everybody has their own view on that, and focus on the legalities, otherwise it could be a lengthy thread! ;0)

14.03.2017, 15:02

	Quote:	Tinkiwinki
	I would make sure you know what happens when one of the three or their partners divorce, need money, move to Florida, etc.

Nothing...... the usage of the flat will drop so the other 2 will get more availability. The person who leaves either has to sell his share for whatever he can get or carry on paying.

14.03.2017, 15:45

	Quote:	fatmanfilms
	Nothing...... the usage of the flat will drop so the other 2 will get more availability. The person who leaves either has to sell his share for whatever he can get or carry on paying.

I'm not a property expert, but if I was doing this I'd want to see:

* a clause giving the remaining partners first refusal on the leaver's share, to avoid them selling it to someone the others don't like.

* a mechanism to force a sale of the entire property on the open market if two out of three want to sell, so you don't get stuck with one vetoing any change.

14.03.2017, 15:46

	Quote:	Boo Radley
	Two of us already have mortgages on homes in Switzerland but the third not.

Before we converted to C permits, we could only own one property. I believe that is a nationwide requirement.

	Quote:	Boo Radley
	I understand that a couple of years ago new laws were introduced to prevent the trend of holiday homes being bought up around the country but I'm not sure if this completely rules-out the option - any experts out there that can advise on the restrictions we may face from a legal perspective?

This only applies to new built apartments/houses. If you find a property that was built before the law went into effect then this shouldn't be a problem. For new builds, if an old property was torn down and rebuilt, this law wouldn't be applicable either. If an old building was torn down and a new multi-apartment building was built in it's place, there will usually be at least one apartment that can be sold as a second home but the rest will have restrictions.

There may be some specific local rules as well so check into that before going too far. If you chat up a real estate agent in the place you are interested in, this information should be easily obtainable.

14.03.2017, 16:18

Quote:

newtoswitz

I'm not a property expert, but if I was doing this I'd want to see:

* a clause giving the remaining partners first refusal on the leaver's share, to avoid them selling it to someone the others don't like.

* a mechanism to force a sale of the entire property on the open market if two out of three want to sell, so you don't get stuck with one vetoing any change.

Normally people use a company to buy the property & just sell the shares. It's much easier to do & no CGT to pay in CH. Of course any sale is then down to the Directors of the company & signing rights of the company.

14.03.2017, 17:48

	Quote:	fatmanfilms
	Normally people use a company to buy the property & just sell the shares. It's much easier to do & no CGT to pay in CH. Of course any sale is then down to the Directors of the company & signing rights of the company.

As EF user Cashlessboy recently learned...

14.03.2017, 18:33

	Quote:	fatmanfilms
	Normally people use a company to buy the property & just sell the shares. It's much easier to do & no CGT to pay in CH.

No, they cracked down on this loophole already long ago. Sale of a majority stake in a company will trigger CGT on underlying property

14.03.2017, 18:43

I think (but only that, I'm no expert) the new laws enable a given Gemeinde to refuse purchases as second homes, and they possibly also introduced the 50% deposit requirement for mortgages on second homes.

Where are you thinking of looking? I'd stay by looking at specific requirements in different places, as to whether it would be allowed, and/or practical.

As it happens we're just starting to think about selling up our places in Elsass and Engelberg and moving somewhere new, so we may have a nice 3.5 (plus newly furbished Dachzimmer) flat right next to the lifts on the market in the next month or two.

14.03.2017, 20:38

	Quote:	ivank
	No, they cracked down on this loophole already long ago. Sale of a majority stake in a company will trigger CGT on underlying property

Is a 33.3% stake considered a majority stake?

14.03.2017, 20:45

	Quote:	fatmanfilms
	Is a 33.3% stake considered a majority stake?

No, but if two such owners would sell in a short period of time, I don't know - that might get the tax office excited as well

14.03.2017, 20:46

	Quote:	ivank
	No, but if two such owners would sell in a short period of time, I don't know - that might get the tax office excited as well

Will if it's held through an AG is that still an issue?

14.03.2017, 20:54

Yes, I was about talking about the sale of shares of an AG, that owns the property. When you own directly, there'll be CGT always no matter how small your ownership percentage was.

If you sell shares of an AG that owns an AG that owns property - I guess the tax office will be interested whether there's a beneficiary who ultimately lost or gained 50+% controlling interest of the property after share sales. The concept is called "wirtschaftliche Hand�nderung", if you want to research it.

Buying a Holiday Home in Switzerland

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