Investing in Swiss real estate.

A property attains the status of a primary residence when it is inhabited by at least one individual liable for local municipal taxation, who has formally established residency and is duly registered in the land registry.

For those seeking to acquire residential real estate in Switzerland for permanent residency, with an intention to stay longer than 90 days, securing a Swiss residence permit (B or C) is imperative, irrespective of EU/EFTA citizenship. Establishing domicile in Switzerland and fulfilling Swiss tax obligations are fundamental prerequisites in this pursuit.

In Switzerland, a second home is a house or apartment that is neither used by a person who is resident in the commune concerned nor used for work or education purposes. Second homes are often used either as holiday homes or are rented to private tenants.

The terms "second home" and "holiday home" are occasionally employed interchangeably. To maintain clarity and distinctiveness, we will use the term "holiday homes" to refer specifically to properties acquired by individuals without primary residence in Switzerland.

Switzerland imposes a national quota system to regulate the sale of holiday homes or units within serviced apartment buildings to foreign nationals. Presently set at 1,500 annually and allocated among the cantons, this system ensures careful management of property transactions.

In select cantons such as Geneva and Zurich, the sale of this category of real estate to foreign nationals is not permitted at all.

Foreign nationals residing abroad may only purchase a holiday residence in a location with which they share exceptionally close ties deemed worthy of protection. However, the interpretation of this legal requirement by the cantons is not always uniform.

A potential real estate object must meet following criteria:

• The holiday home must be located within defined tourist areas in the following cantons: Appenzell Ausserrhoden, Bern, Fribourg, Glarus, Grisons, Jura, Lucerne, Neuchâtel, Nidwalden, Obwalden, St. Gallen, Schaffhausen (only for serviced flats ), Schwyz, Ticino, Uri, Vaud and Valais

• The annual quota of holiday homes available for sale to foreigners in each canton must not be surpassed. Should the quota be exceeded, prospective buyers must await authorisation in the subsequent year.

• In general, the net living area is restricted to 200 sqm (including kitchen, hallway, bathroom, indoor swimming pool, sauna, and hobby room, but excluding cellar, balconies, stairs, and attic), while the land area should not exceed 1,000 sqm. However, exceptions can be made, allowing for up to 250 sqm of living space and 1,500 sqm of land area upon justification of additional surface needs

• Foreign nationals may not own more than one holiday home in Switzerland.

An income property represents a strategic investment in real estate, acquired and cultivated with the express purpose of generating revenue through rental or leasing arrangements. Beyond providing a steady income stream, these properties also offer the distinct advantage of appreciating in value over time, thereby enhancing their overall worth. In essence, income properties are procured with the aim of generating cash flow.

Income properties encompass both residential and commercial sectors. Unlike residential properties, commercial real estate investments in Switzerland are not subject to purchase restrictions.