Real estate in Switzerland is a very profitable business from the investment point of view. But is it complicated to rent out our owm Swiss apartment? And how many taxes you need to pay? Let's find out.
According to the analysis from last December by Global Property Guide, the profitability of renting out housing in the country is low. For example, in Zurich, you have to pay about €1.45 million for a middle-class apartment with an area of 120 sq.m in a residential area, in Geneva it is €1.38 million. You can rent such an apartment for €3,946 and €3,827, respectively. Therefore, the annual rental income will be 3.27-3.33%.
A foreigner who has a residence permit in Switzerland has the right to rent out the purchased property both for shorter and longer period of time.
Non-residents of the country can only buy and rent out real estate that is listed as a second residence ("Zweitüsitz"), or apartments/chalets that fall under the category of "tourist commercial real estate". In the latter case, the management is usually handled by a Swiss travel company.
We will talk about long-term rental rates later. As for short-term rental rates, for example, through AirBnb, the cost of a day in Zurich starts from €100, in Geneva - from €90 for studio apartments.
If we talk about two-bedroom business class apartments within walking distance from the lake or the city center, prices start from €250 per night in both cities.
Income tax. Local authorities assume that a foreign citizen acquires property in order to rent it out. Therefore, even if you decide not to rent the purchased house or apartment, you will have to pay tax on the potential rental income.
BUT! The minimum time for tourist rentals specified in the law is 183 days. Moreover, the same tenant can not stay in such housing for more than 90 days. So for almost six months, you are free to use the property yourself. In any case, this is the maximum time that a foreigner can spend in Switzerland without a residence permit.
In this case, the conditional rent for which the object could be rented is taken as a basis, and income tax is calculated from it. Plus, you can deduct all expenses related to the care and improvement of housing from the potential income: repairs, maintenance, insurance fees, investments in improving the energy saving of the house, environmental protection, etc.You can also deduct interest on debts, even if they do not directly relate to this object.
Income tax is paid at two levels: federal and cantonal. In the first case, a progressive rate is applied, which starts at 0.77% and does not exceed 11.5%. Moreover, if the annual income is lower than €13,460 for one person or €26,270 for a couple, you do not need to pay federal income tax.
In the second case, the rates vary greatly depending on the specific location and are 14-32%.
Companies that rent out real estate in Switzerland, after the reform on January 1, 2020, pay a total income tax of 12-21%, depending on the amount of income and on the specific location.
Let's say you live in an upscale apartment with an outdoor rooftop terrace, panoramic views, near Lucerne or Locarno. You can rent such housing for €5,600-6,000 per month. Thus, the amount of annual taxes for such a property will be about €14,000 - 18,700. Therefore, most foreigners prefer to rent out property purchased in Switzerland and live in rented apartments, it is more profitable.
Feature 1. There are several interesting options for non-resident investors who want to buy a property in Switzerland for personal use. For example, under the Swiss law, mortgage payments (interest and additional expenses) for private real estate are deducted as expenses when filling out a tax return. If you correctly combine a loan (a maximum of 40% of the real estate price) and the deposit of securities, you can not only reduce the tax on imputed income to zero, but even get a higher profit than mortgage interest rates.
Feature 2. Without a good knowledge of German, French or Italian, it will not be easy to fill out and file a tax return correctly. Therefore, you will need the help of a Swiss tax attorney, who charges €1,000 for a simple real estate declaration.
6 900 000 €
Villa in Ticino, Switzerland
483 sq.m
Switzerland
Canton of Ticino
Lake Maggiore
Stunning Liberty style villa
Year of construction of the villa: 1914
The villa is after a complete restoration, during which the smallest details were taken into account.
Style - "Liberty"
Land area (garden): 1000 m2
Total area of the villa: 400 m2
Living area of the villa:...
INDOM
37 000 000 €
Mansion in Geneva, Switzerland
900 sq.m
Switzerland
Geneva
A mansion in the Embassy quarter
A unique offer in the heart of Geneva!
Louis XIII style mansion in the heart of Geneva in the Embassy quarter
The building of the XIX century by the famous architect John Camoletti
The living area of the mansion is 900m2, consists of 4 apartments.
Permission has been obtained for...
INDOM
Price on request
Flat in Montreux, Switzerland
188 sq.m433
Credit
This beautiful apartment with the panoramic view on the Geneva Lake and the Alpes has very nice location in Montreux. The construction is recent, 2008, but its has very nice style Belle Epoque.
Big living room, fully equipped kitchen, 3 bedrooms, 2 bathrooms, dressing, 2 balconies and the parking place in the underground garage.
The...
Victoria Gaillard sarl
5 000 000 €
Penthouse in Montreux, Switzerland
175 sq.m322
One of the most prestigious penthouses in a historic building on the first line of the Montreux floral promenade. It is possible to purchase from 175 to 375 m2, one apartment is completely renovated, one is still in the process of renovation and there is still the opportunity to choose finishing materials. Top floor, balcony, terrace, parking...
Victoria Gaillard sarl
49 000 000 €
Hotel in Sankt-Moritz, Switzerland
8230 sq.m
CreditBusiness on sale
A package of 4 hotels in the elite ski resort of Switzerland – St. Moritz.
Total number of rooms: 134
Total area: about 8230 m2
The possibility of obtaining financing from a Swiss bank!
Engadine-St. Moritz is the oldest ski resort in Switzerland, the most fashionable and expensive of all Alpine resorts, located at an altitude of 1800 m...
Estate-Service24
2 172 085 €
Shop in Sainte-Croix, Switzerland
700 sq.m5.05% per year
Business on sale
Commercial premises for commercial purposes Canton of Valais, Sion, city center GLA 700 sq.m + 1 m/m underground Parking
Annual rental income 116,350 CHF net OPEX per tenant 17,843 CHF
Lease agreement from 2018 for 10 years + 2 extension options for 5 years each
Price 2.3 million CHF + commission 100,000 CHF from the buyer
The room...
Intermark Global
1 337 000 €
Office in Geneva, Switzerland
376 sq.m3.4% per year
Online ViewingBusiness on sale
An office in the very center of Geneva (you can buy it without a Swiss residence permit).
The tenant is a lawyer.
Intermark Global
2 644 278 €
Shop in Montreux, Switzerland
890 sq.m5% per year
Business on sale
A city with a population of about 10 thousand people in the cities of Montreux and Villeneuve, Lake Geneva region.
The city's population has been growing steadily since the late 1980s.
There is a project for the development of the facility – the construction of a residential building with the preservation of a supermarket on the ground floor.
Imagine a luxurious 3-room apartment in the beautiful ski resort of Leysan, located in the heart of the Swiss Alps. This apartment is ideal for those who appreciate comfort and luxury while relaxing on the ski slopes.
When you enter the apartment, you will feel a sense of comfort and warmth. The apartment has a cozy living room with soft sofas...
Victoria Gaillard sarl
Price on request
Villa in Geneva, Switzerland
170 sq.m643
Rental property
Luxury three-storey semi-detached house with swimming pool for sale in the picturesque chemin des vignettes 16 quarter, Crans-pres-Celigny, Switzerland.
Characteristics of the property:
Property type: Semi-detached house.
Number of floors: Three-storey.
Bedrooms: 4 spacious bedrooms.
Bathrooms: 3 modern bathrooms.
Description:...
Victoria Gaillard sarl
7 695 000 €
Villa in Lugano, Switzerland
525 sq.m1066
Rif.706
LUGANO hill side
VILLA 525 m2
GARDEN 1950 m2
Indoor pool
Cinema
Russian sauna
The villa of 1978 construction has been completely renovated with the usage of valuable and high quality materials. The house was restored according to new trends, but the original appearance of the building was preserved.
The house area is 525...
Il Globo Real Estate Lake Como
7 150 000 €
Villa in Lugano, Switzerland
660 sq.m1485
Rif.926
BIOGGIO in Switzerland
Villa of 660 m2
Land 1440 m2
8 double bedrooms
5 bathrooms
Large laundry room
Local wines
Heated swimming pool
Recent construction - 2018
High quality finishes
Carrara marble
Isolations
Air-to-water heat pumps
Solar panels
Internal lift
Garage for 2 cars + outdoor space for 2/3 more...
Il Globo Real Estate Lake Como
8 300 000 €
Villa in Lugano, Switzerland
790 sq.m946
Online Viewing
Rif.950
LUGANO LAKE
Villa with about 790m2
Private garden of approximately 1000m2
Completely renovated in 2016
Fully furnished
8.5 rooms
4/5 bedrooms depending on how the rooms are used
Beautiful completely renovated villa 5 minutes drive from the border with Italy and just 21km from Lugano city.
Very refined and renovated with...
Il Globo Real Estate Lake Como
953 000 €
Apartment in Montreux, Switzerland
75 sq.m22
Apartment size: 75 sq. m➢ 2 bedrooms➢ 2 bathrooms➢ Balcony➢ Garage➢ Location: the city of Montreux Nearby: lake, restaurants, bars, bakeries, shops, pharmacies, post office, banks, hairdresser
NF Group
1 295 000 €
Apartment in Montreux, Switzerland
170 sq.m2
Apartment size: 170 sq. m➢ 2 bedrooms➢ Balcony and terrace➢ With a private elevator➢ Location: the city of Montreux➢ Nearby: city center, shops, railway station station, highway, airport
NF Group
1 905 000 €
Flat in Andermatt, Switzerland
106 sq.m
Located in the Alpine village of Andermatt, this collection of 12 luxury residences and penthouses is ideal for a carefree life in the mountains. Andermatt is a picturesque mountain village in the Swiss Alps. Enter the bright, spacious residences and discover beautifully designed interiors using high-quality materials, cutting-edge household...
NF Group
1 757 000 €
Apartment in Andermatt, Switzerland
95 sq.m22
The complex, located in the heart of Andermatt, is a luxurious collection of fourteen residences and four penthouses. Here, the iconic Italian design is combined with the lively Piazza, set against the mesmerizing backdrop of the Swiss Alps. The windows offer incredible views of the mountain slopes. The complex has a gym and a spa complex.
New luxury modern villa with panoramic views of Lake Geneva and the Swiss Alps.
The house is located in a prestigious area near the St. Georges School and La Prairie Clinic.
Everything for a comfortable stay and a pleasant stay!
City: Chailly - Montreux
Number of rooms: 5.5
Living area: 420 m2
Land area: 2'639 m2
Volume: 1'519 m3...
Victoria Gaillard sarl
31 000 000 €
Hotel in Valais, Switzerland
1000 sq.m
A chalet in the Swiss ski resort of Crans-Montana.
An ideal property for your own use with the opportunity to host friends and family in a cozy atmosphere, as well as for use as a hotel.
At the hotel:
- rooms with balconies overlooking the mountains
- common terrace
- fireplace in the living room
- elevator
- swimming pool
-...
Estate-Service24
9 400 000 €
Hotel in Switzerland
5400 sq.m
DescriptionKey parameters:
Location: Klosters, Switzerland
Property type: Hotel
Number of floors: 6
Number of rooms: 40 (34 double, 6 family)
Plot area: 729 m²
Year of construction: 1965
Sale price: 9.295.000 ₣ (including taxes 7.6%)
Extra options:
Gym
Sauna
Restaurant
Large sun terrace
Bar with 20 seats
Public...
Benefits. If you live permanently in Switzerland, i.e. you are a resident of the country, you can deduct the following types of expenses when filling out your tax return:
Gewinnungskosten – the amount you spend to earn. That is, the cost of working life: clothing, transportation, tools, computer, etc.
Mortgage interest (this case applies to non-residents as well-loan expenses can be deducted from the profit from tourist rentals before paying taxes);
insurance costs;
expenses for children;
the cost of additional education related to your employment (the cost of training seminars, special literature, living expenses and travel, if you do not receive education remotely).
Special tax treatment for wealthy foreigners. Applicable only to Swiss residents. If you are a very wealthy person by Swiss standards, a separate tax regime is provided for you – lump-sum taxation (lump-sum taxation). This means that the annual tax is calculated in relation not to assets and income, but to the potential expenses for the daily needs of your family. Officially, this tax regime is called "taxation according to expenses" (Besteuerung nach Aufwand).
There is no fixed formula for calculating this tax – the exact amount is determined by the canton in which the foreigner intends to live.
Management companies. If you do not have the opportunity to deal with real estate issues on your own, you can contact one of the many management companies. Depending on the presence/absence of tourists and the amount of income, the rate for services varies from 10-12% to 25% of the profit.
Employees of such a company take on the payment of utility bills, search for tenants, solve mutual settlements with them, monitor the condition of real estate, etc.
By the way, the final cleaning when moving completely falls on the shoulders of the tenants in Switzerland, it is customary for the housing to be completely cleaned and cleaned during eviction. It is almost impossible to cope with this task on their own, because residents hire a cleaning company and pay about €800-900 for the final cleaning.
