Q. Should we first look for a house, or sort out schools? What happens if we do one and cannot fix the other? Will our tax then be the same wherever we are?
ANS. This eternal triangle is what most families face when moving here. The simple answer is that available housing stock in Switzerland is much lower than in US, UK or much of France for example. In recent years the international community has swelled putting pressure on all manner of local resources – although the quality of life here still remains very high. This has led to a shortage of school places, changing logistical and transportation issues and sometimes harder choices to make. We always suggest that before you do anything we discuss in detail all your family needs, including but by no means limited to:
Will one or both of you be working?
If yes, will this be in Switzerland directly or alternatively will Switzerland be just a home base for you to look after your international affairs?
Do you have children and will they go to school here? Are they always likely to stay at school in Switzerland or move to a boarding school overseas at some stage?
Are you moving as part of a corporate or international institution or as an individual?
Do you regularly have to commute to a local destination?
Do you need regular airport access?
Will you or may you, buy another home, for instance to ski?
How much time will you spend in Switzerland?
Do you have an initial ‘feel’ for a location in the area? Why do you think this?
Will you be seeking a pre agreed tax agreement or pay tax from your income?
It is only after we have fully discussed all these issues with you that we can give real guidance on the eternal triangle: house/location versus tax versus schooling questions.
Q. Does it make a difference which canton I live in? I have heard there are three main cantons in Western Switzerland.
ANS. There are in fact more than this although these three are where most international buyers move to. It can make a big difference, in many respects, in which one you live and we would discuss this with you at the outset.
Q. Why are houses apparently so expensive here? Is this a good investment?
ANS. Good properties are very expensive in western Switzerland both on the lake and in the mountains – perhaps on a par with central London as a guide. This reflects the scarcity of larger Anglo Saxon type and size of accommodation and frankly the demand from overseas buyers to buy property. Houses can sometimes take longer to sell here but they nearly always do sell eventually as someone will be prepared to pay the price! However interest rates are very low by international standards in Switzerland and mortgages can be rather long term so that actual outgoings can be similar, or even cheaper, than a great many other locations. This is in fact one attraction in buying a property in Switzerland as this market normally achieves steady appreciation and historically has proven one of the most stable property markets in the world (Note: here we have to point out to our clients the usual disclaimer that of course prices can in certain circumstances go down as well as up). The outlook for Switzerland in terms of property prices is encouraging. The Swiss Franc is strong as it is seen as a safe haven currency and property investment in the country is considered by many to be as about a solid investment as they can make. By the same token rental accommodation Switzerland is very expensive and few who are not just temporarily based in Switzerland will wish to rent long term. It is important for those seeking to fix a pre agreed tax agreement that it is understood that the calculation for your taxation will start by looking at the deemed rental value of the house you own or are renting. If this applies to you this is something we should discuss with you at an early stage.
Q. Is it easy to find good proportioned houses here with modern layouts, kitchens and bathrooms?
ANS. This can be very difficult to answer as so often tastes and expectations differ. In general terms Swiss houses are smaller than many areas of the world- even the larger ones! Older ones can have smaller rooms and often small kitchens and formal dining rooms which is often not how modern families live. It is a strange feature of such older houses that however inconvenient, the front door is very often on the north side of the house. Modern houses can sometimes be insufficiently or inappropriately finished for the discerning buyer, or poorly located. Of course there are some wonderful properties and it is our job to find the property which suits you. If we can’t find it exactly we have close relationships with an international but local, developer who has renovated some extraordinary properties in the region and can work with local architects to make something which is tailored personally for you.
Q. 5&M charges an upfront fee whereas other agents do not. I don’t understand why?
ANS The first thing we should point out is that this fee is deductable from the eventual sale as we will be paid a commission, as all agents are in Switzerland, by the vendor or their primary agent if it is not us. So by the time of purchase using Five & More costs you nothing just like any other real estate agency. However as we provide considerable upfront services and assist pro actively with all aspects of your move: considering tax, schools, other professional services and everything relating to the suitability of a location or property for you, then we have to protect ourselves against people who take all that knowledge and input and either don’t buy at all or buy elsewhere. If you are a serious purchaser we can provide fantastically more than a straightforward agent – all for no cost. We really will look at the suitability of what and where you are buying. We will always start from the eternal triangle of schools tax and house we look at means of transportation to work and timings and which schools you might get into. We are not just selling you a house! You just will not find this expertise and service elsewhere geared to the inward bound buyer.
Q. Is the buying process straightforward?
ANS. In normal cases it is. Quite often our clients are pressed for time and only able to visit Switzerland for short, intensive visits. We have experienced instances where clients have visited several houses over a couple of days and been to the notary, signed and left again – job done! For most this is not going to happen. It is often possible to agree an option on a house, usually only for a couple of days and usually without cost. This does enable time to reflect if it’s a short visit but where one property does seem particularly attractive. In Switzerland the notaire acts for buyer and seller and usually as the buyer you can choose the notary, should you have a preference. We tend to recommend one notaire with whom we have worked for many years and know to be thorough and efficient. Both Notaries (Father and daughter at this practise speak English). Most notaries and in particular our recommended one, will take you through the pitfalls of the process and even comment on terms of loans and other related factors, should they consider these to be inappropriately onerous. Signing initially for the property commits the purchaser to pay a non refundable deposit, usually 10% and then a ‘completion‘ date is set for the final sale. In the mean time the notaire will carry out local searches, look at any obvious legal issues with the property and examine any relevant servitude which may affect the property. A servitude is simple a legally binding agreement previously entered into by an owner of the property. For example where they may have agreed to keep a hedge below a certain height to avoid obstructing a neighbour’s view. Purchasers should also be aware that in this regard Switzerland’s reputation for exactitude comes to the fore and most communes will have regulations about how high your trees are allowed to be, when you may not cut your grass (usually the ‘Sabbath’ day of rest!) and other sometimes unusual requirements. Some communes are quite onerous in their restrictions and some have relatively few. In general terms we can comment on many of these issues and if you require it can prepare a detailed report for that property and commune for a small fee. Mostly the buying process is straightforward and well governed in Switzerland.
Q. I need a loan either long term or temporarily to complete this purchase. How do I go about this?
ANS. This is one of the many reasons why choosing Five & More is a good idea. We have excellent relationships with all the relevant Cantonal banks, and main Swiss and international banks as well as a host of private banks throughout the country.
Q. Is it normal to have a structural survey completed of a property in Switzerland?
ANS. Surprisingly it often isn’t. New house come with a sellers guarantee of 2 years. For existing properties this does not exist. Our advice is that it is always prudent to have either an architectural or a full structural survey, unless it is certain that other guarantees apply. We can arrange this if it is required.
Q Can I buy in Switzerland if this is not my main residence?
ANS. It depends! In most ski stations it is possible but only for some properties as quotas exists. This also may mean that such properties command a higher price although this is not always the case as in some smaller villages there is a desire to encourage inward investment and there is less competition to buy. In Geneva and along the lake this is usually not possible although such discussion need to take place at our first meeting so that we can comment or seek appropriate advice.
Q. What is the real cost of living in Switzerland?
ANS. Switzerland is often perceived, unfairly in our view, as a having a high cost domestic economy. This is not necessarily so compared to world metropolitan centres such as NYC, London & Paris and most definitely not compared to Moscow. It is also regarded by most as much cheaper than Monte Carlo. Much of the cost of living is similar to the UK, with many clothes, consumer durables and definitely petrol, being much cheaper. One of the biggest outgoings for many people is healthcare. Switzerland has a compulsory private healthcare system which is expensive but generally excellent! Anything which requires labour is very expensive in Switzerland as the labour market is very well protected. One by product of this though is that many craftsmen and artesian skills now missing in other economies are still readily available here. Given that cars and certainly petrol, are much cheaper than elsewhere, taxi’s are for some reason very expensive. In general terms though the overall cost of living is comparable to many others areas of the developed world. And, we have a wonderful lifestyle, climate, great chocolate, and stunning views!
Q. Is Switzerland safe?
ANS. Nowadays we might say is anywhere safe? Any answer to this certainly makes us a hostage to fortune. However in general terms Switzerland is very safe and it is a key attraction of living here. You will still see small children walking to and from school by themselves, and random crimes against people are very low. One of the key attractions of living in Switzerland is that it is a safe, orderly and secure environment. House crime is increasing but compared to major metropolitan centres is very low. Society is very civil here. People usually give way at pedestrian crossings and say hello and good bye on entering and leaving shops and other public places. The way of life can be slower but most people very happily adapt to that quite quickly and appreciate the virtues of a more polite and civilised society.
Q. That sounds like Switzerland is rather boring which it has a reputation for! Is it true?
ANS. Downtown Geneva is never going to be NYC or London on a Saturday night. On the other hand many would claim that Verbier is even better! It all depends on your stage and circumstances in life. Switzerland is an ideal place to bring up a family and then live thereafter. If you are in your 20’s and seeking the bright lights then maybe there are other places to go. Many families choose to build their family lives around skiing on winter weekends or sailing or biking in the summer; the outdoor possibilities are endless. More conventional sports abound also. There is high level soccer, rugby and cricket played as well as tennis, ice hockey and basketball. It is certainly not all about sport however and the area is far from the cultural wasteland some outsiders imagine it to be. There are more museums per capita from Geneva to Montreux than virtually anywhere else in the world. Opera, Philharmonic and chamber orchestras are accessible if less so than in Paris or London. There are umpteen galleries in all towns, particularly Geneva and many visiting exhibitions of world renown. There is a thriving jazz and rock scene and infinitely more entertainment available than is generally perceived from outside or than it is possible to avail oneself of. In summer there are three major rock and jazz festivals headlined by the Montreux festival. Many major rock bands now visit Geneva and there is global class tennis and golf. Is it the Left bank or West End of London? No it isn’t but the general lifestyle is pretty unbeatable. And just remember: Paris and London are just an hour away on Easy (or Executive!) Jet and Paris and Milan only 3 to four hours by train.
Q. I am told that Switzerland is very bureaucratic?
ANS Like any country Switzerland can appear bureaucratic to those uninitiated in the local customs and practises. Contrary to their stereotypes (or maybe not) the US, UK and France are very bureaucratic places to live and work. Russia can be a minefield of bureaucracy to live in, for both native and foreigner alike! Switzerland has its own ways and we can help you with those (see fees section), if you wish, but it is in fact no better or worse than many places in terms of dealing with day to living administration, insurances, taxes, residency and the like.
Q. I have heard that Switzerland can be unfriendly to foreigners and difficult to integrate into. Is it?
ANS. Like most centres with large foreign populations there is both a local and expat side to society in western Switzerland. Sometimes they mix but more often they are separate. Here language (French) is a great advantage as it allows immediate access to all aspects of the community and communication is the first part of being accepted. In the large ski resorts there are few barriers to immediate community assimilation. Along the lakeside, some communes have up to 40 % foreign registered residents. These may be working for NGO’s, corporate executives or high net worth individuals. The great thing is that they all tend to mix up in their social lives. There are fewer nationality ghettos than in many ex pat communities and surprisingly fluid socio economic mix of communities. It is quite possible to be at a dinner or party with a billionaire and an aid worker on leave from a refugee camp! Conversations can be interesting. However most well off families either from Switzerland or moving here, tends to be discreet about their wealth and in this respect society here is rather different from the Cote d’Azur or Monte Carlo or even the Channel Islands. Much of this depends where you live. Geneva or Crans Montana are more formal and in parts obviously wealthy, than say the lakeside or Verbier which tend to be more discreet (despite the UK ‘redtop tabloid‘ image of the latter). Most people who come here to live from abroad have interesting things to do and say and many are rich in experience. This makes for a diverse set of communities where it can be surprisingly easy to find those of like mind and similar interests as well as introducing some challenging new ones. You may not be invited around to a Swiss neighbour for fondue in the first few months but others in the international community will be more immediately welcoming. Show your local Swiss neighbours that you mean to be a genuine, ongoing and committed part of the community and they will unbend gradually. If you are not so inclined they may continue with a polite, but not unfriendly reserve, but then you probably won’t care anyway!
Q. I HAVE HEARD THAT BANKS ARE MORE CONSERVATIVE IN THEIR LENDING IN SWITZERLAND THAN ELSEWHERE ?
ANS. You should try a Canadian bank ! Seriously though banks are somewhat conservative in Switzerland although this is less noticeable now than before the recent recession as all banks have become much more cautious. Generally in Switzerland the loan to value ratio for a bank is about 60%. Banks generally therefore will start from an actual property valuation that may only be 60% of the market of the property as this fits their internal governance. This is usually a start point and with our introductions we can generally move this considerably, provided of course you are a bankable client ! We recently had a salaried client where the start point was 60% and we moved this enormously, after our guidance as to the actual provenance and employment situation of our client. Of course many of our clients do not need any loans and use capital to buy outright. Just occasionally such clients want to fund part or all of the purchase temporarily whilst they manage FX considerations. Such high net worth clients can often present the biggest problem to the bank as your assets are not always immediately visible – usually deliberatly ! Be patient we can usually get you through this process given our intimate knowledge of what the banks need and how to give them the comfort they require.