Switzerland Mortgage Guide for Non‑Resident HNWIs

• Introduction
• Eligibility Criteria for Non‑Resident Buyers
• Types of Mortgages in Switzerland
• Lender Criteria and Requirements for Non-Resident Borrowers
• Interest Rates and Financing Costs
• Tax Implications for Non-Resident Property Owners
• Legal Considerations and Property Purchase Process
• Step-by-Step Mortgage Process for Non-Residents

Introduction

Buying property in Switzerland as a non-resident high-net-worth individual (HNWI) can be an attractive investment and lifestyle choice. Swiss real estate offers stability, privacy, and prestige – from luxurious ski chalets in the Alps to prime apartments in Zurich. However, financing a Swiss property as a foreigner comes with unique eligibility requirements, legal restrictions, and financing conditions that differ from other markets.

This comprehensive guide is tailored for non-resident HNWIs looking to purchase property in Switzerland with the help of a mortgage. We will cover everything from eligibility criteria and mortgage types to lender requirements, interest rates, tax implications, legal considerations, and a step-by-step purchase process. Throughout the guide, you’ll find tables, examples, and bullet points to illustrate key points. An FAQ section at the end addresses common questions from foreign buyers.

Whether you’re eyeing a Geneva lakefront villa or a Verbier ski retreat, this guide will prepare you for the Swiss property journey.

Eligibility Criteria for Non‑Resident Buyers

Switzerland heavily regulates foreign property ownership. As a non-resident (someone living abroad without Swiss residency), your ability to buy residential real estate is limited by the federal law known as “Lex Koller” (officially, the Federal Act on the Acquisition of Real Estate by Persons Abroad). This law, along with local regulations, defines what you can purchase and under what conditions. In this section, we outline who qualifies to buy, what types of properties are allowed, and the preliminary requirements you must meet.

• Swiss Laws Restricting Foreign Buyers (Lex Koller & Lex Weber)
• Who Qualifies as a Non-Resident (and Alternatives)
• Eligible Property Types for Foreign Buyers
• Preliminary Financial Requirements

Swiss Laws Restricting Foreign Buyers (Lex Koller & Lex Weber)

Lex Koller (Foreign Ownership Law): Lex Koller is the key legislation restricting property purchases by foreigners. It generally requires non-resident buyers to obtain authorization from cantonal authorities before buying Swiss real estate. Each canton (state) has an office that decides if a given purchase by a foreigner can be approved. The intent is to prevent excessive foreign acquisition of Swiss land. Under Lex Koller:

• Permitted Property Types: Non-resident foreigners are limited to buying holiday homes and certain investment (commercial) properties. You cannot freely buy a primary residence unless you become a Swiss resident. Holiday homes (vacation properties) in designated tourist areas are typically allowed with permission. Commercial real estate (such as offices, hotels or factories) can often be purchased without special permit as long as used for business (not for your personal housing).
• Authorization Process: If you find a property that qualifies (e.g. a holiday chalet in an approved resort), the purchase must be authorized by the canton. The notary handling the sale will usually apply for this Lex Koller permit on your behalf. The canton reviews whether the property fits the criteria (location, type, size) and whether annual quotas for foreign buyers aren’t exceeded. Only if the permit is granted can the sale proceed.
• Quotas: Some cantons have annual quotas limiting how many foreign-buyer permits are issued per year. Popular touristic cantons (Valais, Vaud, Graubünden, etc.) often have a fixed number of holiday home authorizations they can grant each year. Competition for these slots can be high, so planning ahead is crucial.
• Property Size Limits: Lex Koller imposes size restrictions on holiday homes for foreigners. Generally, the property’s living space cannot exceed 200 square meters and the plot size must be under 1,000 square meters. In other words, very large luxury estates might not be eligible. (It’s sometimes possible to get an exception for a slightly larger house, but this requires special approval and is not common.) Areas like balconies, garages, or basements may not count toward the 200 m² living area limit, but the main habitable floor space must be within the cap.
• One Property per Non-Resident: As a non-resident, you are typically not permitted to own more than one Swiss residential property at a time. For example, you cannot buy two different holiday apartments in Switzerland concurrently under the standard rules. (If you wanted to purchase another, you’d likely need to sell the first one.) This rule ensures foreign buyers don’t accumulate multiple Swiss homes purely as investments.

Lex Weber (Second Home Law): In addition to Lex Koller, Switzerland’s Lex Weber law (Second Homes Act) impacts foreign buyers indirectly by limiting supply of holiday homes. Lex Weber, passed by referendum in 2012, caps the proportion of second homes in each commune at 20%. In municipalities where over 20% of homes are already second residences, no new holiday homes can be built. This means that in many popular resort towns, new constructions intended for leisure use are restricted. How does this affect you as a buyer?

• Availability of Properties: If you’re looking to buy in a high-demand ski resort village that’s at the 20% cap, you’ll mostly be choosing from existing properties (older chalets or apartments) that come onto the market. New developments in those areas might not be available to anyone as second homes.
• Location Constraints: It’s important to know that not every Swiss town is open to foreign buyers, even for holiday homes. Cantons designate specific tourist zones where non-residents may buy. For instance, world-famous resorts like Verbier or Zermatt are open to foreign buyers (with permits), whereas a home just a few minutes away in a non-tourist village might not be eligible. This can be surprising – you could visit two adjacent towns in Switzerland and have the legal ability to buy in one but not the other due to these rules. Always confirm a property’s eligibility when searching.

Key Takeaway: As a non-resident HNWI, you can purchase Swiss property, but only in specific categories (typically vacation homes in approved areas or certain commercial investments). You’ll need a cantonal permit under Lex Koller, and you’re limited in size and number of properties. It’s essential to work with local experts (realtors, notaries) who understand these restrictions. The legal framework may seem complex, but many foreigners do successfully buy magnificent Swiss homes each year by following the rules.

Who Qualifies as a Non-Resident (and Alternatives)

For the purposes of Swiss law, a “non-resident foreigner” generally means:

• Persons Living Abroad: If you do not live in Switzerland and hold no Swiss residency permit, you are treated as a foreign buyer subject to Lex Koller. This includes citizens of any country (EU or non-EU) who reside outside Switzerland. Even if you are Swiss by nationality but tax-resident elsewhere, special rules can apply (though Swiss citizens have the right to buy without permit, their foreign residency might affect mortgage considerations, not the purchase right).
• Residents without Permanent Status: Foreigners living in Switzerland on a short-term L permit (or certain non-resident diplomats) may also be treated as “persons abroad” in terms of buying property. In contrast, foreigners living in Switzerland on a long-term B residence permit (or a C permanent resident permit) are not subject to Lex Koller for their own housing. So if in the future you obtain a Swiss residence (for example, through a cantonal investor program or retirement residency deal), you would then be allowed to buy property as a local, including a primary residence, without needing special authorization.
• EU/EFTA Nationals: Switzerland has agreements with the EU/EFTA, but when it comes to buying property, EU/EFTA citizens are treated like any other foreigners if they are non-resident. Only if they move to Switzerland (and get a residence permit) do they gain the same property purchase rights as Swiss. There is no automatic right for an EU citizen living abroad to buy Swiss real estate – they still must qualify under the holiday home or commercial property rules.
• Corporate Purchases: What if you plan to buy via a company or trust? Swiss law will look through the entity – if a foreign non-resident ultimately controls a company, that company is considered “a foreign person” under Lex Koller. You cannot bypass the rules by simply purchasing through an offshore company. A foreign-owned company faces the same restrictions (and needs the same permits) as an individual foreign buyer. (One exception: foreign companies can buy real estate that is strictly used for business operations – e.g., buying an office building for your company’s Swiss branch – but not residential property for the shareholders’ use.)

In summary, if you currently live outside Switzerland and lack a Swiss residence permit, you will need to follow the non-resident purchasing regulations outlined here. If obtaining Swiss residency is an option for you (some HNWIs do pursue a Swiss residence for tax or lifestyle reasons via family reunification, employment, or lump-sum taxation agreements), doing so would later grant more freedom to buy property.

Eligible Property Types for Foreign Buyers

Under the restrictions, here are the key property categories non-resident buyers can consider:

• Holiday Home (Secondary Residence): This is the most common route for non-resident HNWIs. A holiday home is a house or apartment in a designated tourist commune, intended for your own vacation use (and/or rental to tourists). Examples: a ski chalet in Verbier, a lakeview villa in Montreux used for holidays. As discussed, size is limited (≤200 m² living space typically), and you generally can only own one at a time. Holiday homes cannot be your primary residence since you don’t live in Switzerland full-time, and by law you’re not allowed to rent them out year-round – but you can rent them out on a short-term basis when you’re not using them (such as weekly holiday lets), which can help offset costs. In fact, the permit often explicitly allows renting to third parties when you are absent, so long as the property remains for secondary residence use.
• Example: You buy a 150 m², 3-bedroom apartment in a designated ski resort zone. With the permit granted, you can use it for family ski holidays. When you’re abroad, you hire a local agency to rent it to tourists. You enjoy the property several weeks a year and generate rental income in other weeks (note: rental income will be subject to Swiss tax – covered in the tax section).
• Investment Property (Buy-to-Let): Pure buy-to-let residential investments (where you buy an apartment solely to rent it out long-term, without using it personally) are generally not permitted for non-residents under Lex Koller. Switzerland doesn’t want foreign speculators buying up ordinary housing stock. The holiday home must be for personal use (with ancillary short-term renting allowed). However, commercial properties are treated differently: If you buy, say, a hotel, a retail space, an office building or development land for a commercial project, those may be exempt from Lex Koller or more easily approved because they are seen as business investments rather than housing acquisition. For example, a foreign company or individual can typically buy a hotel and run it (subject to local business permits) since it’s a commercial enterprise, not a private dwelling – but buying an apartment building just to earn rental income would fall foul of the rules unless special approval is given (which is rare).
• Residence for Future Relocation: Some HNWIs plan to eventually relocate to Switzerland. If you intend to move to Switzerland in the near future (for instance, you’re applying for a residence permit or citizenship by descent), you might want to purchase a home in advance. Generally, until you actually obtain the residence permit, you’ll be treated as a foreign non-resident buyer. That means you couldn’t buy a regular primary residence pre-permit. One workaround used is to first buy it as a “holiday home” (if it’s in an eligible area and meets size limits), then later, once you become a resident, get it re-designated as your primary home. Another scenario: some cantons offer special residence programs for wealthy retirees (lump-sum taxation schemes); under those, when you become a resident, you can buy a house as any resident would, possibly even during the application process with prior agreement. But these cases are specialized – in general, without residency you stick to holiday homes.
• New Developments (Tourist Residences): Occasionally, developers create projects specifically aimed at foreign buyers that have prior approval. These might be in resorts where the canton has granted an allocation for foreign-owned units. As a buyer, it’s easier since the path is paved legally, but you still count under quotas. Always verify that a new development promising “available to international buyers” truly has the approvals in place.
• Agricultural or Alpine Land: Purchasing farmland, vineyards, or large plots of land in the mountains is heavily restricted even for Swiss citizens, and essentially off-limits to foreign non-residents. There are separate laws protecting agricultural land (Lex Friedrich) with stringent rules. So if your dream was a large farm estate or an entire mountain, realize that those are not going to be permitted under normal circumstances.

By understanding what you can buy, you can focus your search on viable properties. Most foreign HNWIs end up buying upscale holiday homes – which Switzerland has plenty of – under the authorized categories.

Preliminary Financial Requirements

Aside from legal eligibility, consider the financial prerequisites early on:

• Minimum Investment/Property Value: While there’s no official minimum price for foreigners, in practice banks and authorities treat very small purchases with caution. Many foreign buyers in Switzerland are purchasing luxury properties (often CHF 1 million and above). Cantons might be more inclined to approve a permit for a high-end holiday home that clearly fits the “tourist economy” rationale, rather than a low-cost apartment. Moreover, Swiss private banks often prefer larger loan sizes (some have internal minimums like CHF 500k or CHF 1M for mortgages) especially for cross-border clients. As an HNWI, this is usually not an issue – but it means that if you were, say, looking at a small studio flat, you might face more obstacles both in approval and financing.
• Liquidity for Down Payment and Fees: You will need substantial cash on hand – at least 30%–40% of the property price as a down payment, plus about ~5% for fees/taxes (explained later). We will discuss financing in detail in the next sections, but it’s important at the outset to ensure you have the liquidity ready for the equity portion. Swiss regulations require significant buyer equity in any property purchase, especially for non-residents.
• Creditworthiness: Swiss banks will scrutinize your financial profile (income, assets, debts) as part of mortgage approval. Start gathering documentation (bank statements, income statements, tax returns) early so you can demonstrate you are a low credit risk. If you have an existing banking relationship with a Swiss bank (perhaps through your wealth management), that can be a big plus in smoothing the process.

In the following sections, we dive deeper into mortgage options available to you and what lenders will expect. First, let’s explore the types of mortgages in Switzerland and how they work, so you can choose the financing structure that best suits your needs.

Types of Mortgages in Switzerland

Swiss mortgages come in several forms, and as a borrower you can often choose a combination of products to tailor your loan. The mortgage market in Switzerland might differ from what you’re used to in other countries. For example, 30-year fixed mortgages are not the norm; instead, Swiss loans often have shorter fixed-rate periods (5, 10, or 15 years) and unique features like interest-only tranches. Here we outline the main mortgage types and features available, which generally are accessible to non-resident buyers as well (subject to lender policies). Understanding these options will help you decide how to structure your financing.

• Fixed-Rate Mortgages
• Variable and SARON (Floating-Rate) Mortgages
• Interest-Only vs. Amortising Structures
• Split Mortgages and Customized Plans
• Table: Common Mortgage Types & Features

Fixed-Rate Mortgages

Fixed-rate mortgages are extremely popular in Switzerland. With a fixed-rate loan, the interest rate is locked in for a defined term, providing stability in your interest costs.

• Common Fixed Periods: Typical fixed-rate terms range from 2, 3, 5, 10, even up to 15 years. The 10-year fixed is often the most chosen term, striking a balance between rate and security. Some banks may offer even longer terms (up to 20 years), though 10 years is a sweet spot in the Swiss market. Unlike some countries, you won’t find a standard 30-year fixed fully amortizing mortgage; instead, you might renew or refinance after the fixed period ends if you still have a balance.
• Interest Rate: The rate remains constant throughout the fixed term. If you lock in at, say, 2.0% for 10 years, you will pay 2.0% annual interest for those 10 years regardless of market fluctuations. This insulates you from rate increases. As of late 2024, 10-year fixed rates for top-tier borrowers were roughly between 1.2% and 1.8%, reflecting Switzerland’s low-interest environment. For example, if you took a 10-year fixed mortgage in December 2024, you might secure a rate around 1.5%. (Rates do change over time; in early 2022, 10-year averages were closer to 1.9%, then rose and fell again.) Banks may offer different rates depending on your loan-to-value and relationship, but overall Swiss fixed rates have been very attractive historically.
• Pros: Stability and predictability of payments. Many HNWIs like fixed rates for large loans because it eliminates interest-rate risk. If you plan to hold the property long-term, locking a low rate for 5–10 years can be very beneficial for budgeting and peace of mind.
• Cons: Less flexibility. If you want to pay off the loan early or sell the property during the fixed term, penalties (break fees) usually apply. Swiss banks impose hefty fees to break a fixed-rate mortgage early, as they’ve set aside funds at that rate. These penalties can run into tens of thousands of francs, essentially the interest differential for the remaining term. So, you need to be relatively confident you won’t need to exit the loan early (or be ready to absorb the penalty). Another con is that if interest rates drop further, you’re locked in at the higher rate (though given how low Swiss rates have been, there’s limited room to drop much further; indeed in recent times the risk has been more that rates might rise from historic lows).
• Use Case: If you’re risk-averse or expect rates to climb, a fixed-rate mortgage is ideal. For example, an HNWI buying a CHF 5 million chalet might opt to fix CHF 3M of the loan at a low rate for 10 years, to know exactly what the interest outlay will be, and maybe leave another portion variable (a strategy we’ll discuss).
• Example: You take a CHF 2,400,000 mortgage on a CHF 4,000,000 property (60% financing). You choose to fix the entire loan for 10 years at 1.5% interest. Your annual interest cost will be CHF 36,000 (1.5% of 2.4M) each year for the next 10 years. This equates to CHF 3,000 per month in interest. You can plan around this expense; even if market rates shoot up to 3% or more, you continue paying 1.5%. After 10 years, you’ll need to either repay or refinance the remaining balance at prevailing rates. During the 10-year period, you may amortize a portion (as required by the bank) but interest is steady. This gives you stability in your cash flow and protects you in a rising rate scenario.

Variable and SARON (Floating-Rate) Mortgages

Switzerland also offers variable or floating-rate mortgages, though they are less common today than fixed.

• Traditional Variable Rate: A true variable-rate mortgage has an interest rate that can change at any time at the bank’s discretion or in line with some reference rate adjustments. Historically, Swiss variable mortgages were linked loosely to banks’ base rates and could be adjusted with notice. In practice, very few new mortgages are pure variable now, because they tend to carry higher rates (banks price them high to encourage people into fixed or SARON products). They also often lack a clear benchmark, making them somewhat non-transparent. Some older loans or specific cases use variable rates, but most borrowers either fix or use SARON-based floating.
• SARON (Floating) Mortgages: SARON stands for Swiss Average Rate Overnight. It’s the rate that replaced LIBOR in Switzerland. SARON-based mortgages are the common form of “floating-rate” loans now. Here’s how they work: the mortgage interest rate = SARON reference rate + margin. SARON is an overnight interbank rate published by SIX, and banks often use a compounded 3-month or 1-month SARON as the base, resetting periodically (e.g., every 3 months). The margin is fixed over the loan’s life (based on your risk profile, LTV, etc.), but the SARON portion fluctuates with the market. For example, if SARON is 0.5% and your margin is 1.0%, you pay 1.5%. If SARON rises to 1.0%, your rate becomes 2.0%. Rates typically adjust quarterly (though daily changes are averaged).
• Current SARON context: The Swiss National Bank’s policy rate influences SARON. In the late 2010s, SARON was negative (around -0.75%) meaning some SARON mortgages had effectively 0% + margin (banks often floor it at 0). In 2022–2023, SNB raised rates above zero, so SARON climbed. As of early 2025, SARON is around 1% (hypothetically), so a typical SARON mortgage might be ~1% + margin 0.8% = 1.8%. These are just illustrative; actual margins vary. The key point: SARON loans have been relatively low-cost but can move up if the SNB hikes rates.
• Pros: Floating rates (especially SARON) often start lower than fixed rates. When the yield curve is upward sloping, a floating rate might be, say, 1.2% versus a 10-year fixed at 1.8%. You save on interest if rates stay stable or decrease. There’s also typically no or low prepayment penalty – you can usually exit a SARON mortgage with a few months’ notice at an interest period end, giving flexibility if you decide to sell or refinance. This flexibility can be valuable for an investor who might sell the property in a few years or who expects to pay off the loan from a liquidity event.
• Cons: Interest rate uncertainty – you carry the risk of rates rising. If SNB raises rates, your mortgage interest will increase at the next reset. Swiss rates have been low for decades, but as recent events showed, they can rise. If you take a SARON mortgage at 1.5% today, it could be 2.5% in a couple of years if inflation surges and the SNB tightens policy. You must be comfortable with possible fluctuations. Also, budgeting is harder with a variable loan since your payments can change.
• Use Case: Suitable if you expect stable or falling rates, or if you plan to pay off or refinance in the short term. Some HNWIs opt for SARON mortgages if they have a large cash position or investments – they might prefer to borrow at a low floating rate while their money is invested elsewhere, and they know they can always pay off the loan if rates spike too high. SARON loans can also be good if you intend to sell the property in a few years (e.g., you bought pre-construction and plan to flip, or you only want to keep the chalet for a short horizon), because you avoid big break fees.
• Example: You take a CHF 1,000,000 SARON-based mortgage on a property, initially at 1.3% (with SARON near 0.5% + 0.8% margin). Your initial annual interest is CHF 13,000 (about CHF 1,083 per month). If over a year the SNB raises rates by 0.5%, and SARON follows, your new rate might be ~1.8%. Then your interest becomes CHF 18,000 per year (~CHF 1,500 per month). You would see your costs rise, but perhaps you anticipated this or are willing to accept it. Conversely, if the economy weakens and SNB cuts rates, SARON might drop and so would your payments. Throughout, you have the right to terminate the loan at each interest period end (often quarterly) without a heavy penalty – you might just owe a small administrative fee or interest to the end of the current period.

Interest-Only vs. Amortising Structures

A distinctive aspect of Swiss mortgages is the split between interest-only (standing) debt and amortizing debt. Banks often allow part of the mortgage to be interest-only (no regular principal repayment), especially for higher-end properties, but require amortization on a portion.

• Standard Swiss Practice (1st and 2nd Rank Loans): Typically, a Swiss mortgage is structured in two tranches:
  • The “first rank” mortgage, up to a certain Loan-to-Value (LTV) ratio (often 60-65%), which can be interest-only indefinitely.
  • The “second rank” mortgage for the amount above that threshold (up to the maximum LTV the bank grants, e.g. up to 80%). This second part must be amortized (paid down) within a certain timeframe (commonly 15 years or by retirement age) to bring the total LTV down to the first rank level.
  For Swiss residents, it’s common: if you borrow 80%, you must amortize 15% over 15 years (to get from 80% to 65%), while 65% can remain outstanding without needing repayment during the term. For non-residents, since the allowed LTV is often lower (say 60%), the entire loan might be considered first-rank and thus interest-only payment is possible on the whole balance. However, lenders may still prefer you pay down some principal over time as a form of discipline, depending on your profile.
• Interest-Only Option: With an interest-only mortgage (also called standing loan), you only pay interest each period, and none of the principal is repaid until a later date (often the loan maturity or when you sell/refinance). This keeps monthly payments lower, as you’re not gradually repaying the loan. For HNWIs who prefer to keep cash free for investments or who have low-cost borrowing, this can be attractive. In Switzerland, leaving a mortgage outstanding is common because mortgage interest is tax-deductible (for Swiss residents) and many prefer to invest excess funds rather than pay down a cheap loan. As a non-resident, the tax break might be less relevant, but you might still choose interest-only to maximize leverage or liquidity.
• However, note that banks might require additional collateral or a higher interest rate for interest-only loans, especially if you’re older or the loan extends long-term. They want to ensure the loan will be repaid eventually (e.g., from sale of the property or your assets). Often, for HNWIs, banks are comfortable with interest-only if the LTV is conservative and the client has substantial other assets.
• Amortising Loan: An amortising mortgage means you are paying back principal over time, usually in equal instalments (plus interest). Swiss mortgages often use direct amortization (principal reduction) or indirect (contributing to a pledged investment or insurance that will pay off the principal later, more common for residents with life insurance policies). For non-residents, typically it would be direct amortization if required.
• If your loan is, say, 50% LTV, a bank might not require any amortization at all (since it’s low leverage). If it’s 70% LTV, they may ask you to amortize 5% over 5-10 years to reach 65%.
• The amortization schedule can be negotiated, but generally at least something like ~1% of original property value per year if you need to reduce LTV. So, on a CHF 2 million property with a CHF 1.2 million loan (60%), they might ask you to pay down CHF 200k over 10-15 years (which is around CHF 1,300 per month).
• Choosing a Structure: Many foreign buyers, especially those who are financially savvy, choose to combine interest-only and amortizing portions. For example, you might keep a base loan of 50% LTV interest-only, and agree to amortise any amount above that. Or if LTV is low, make the whole loan interest-only for flexibility, and you can always prepay principal later if desired (subject to terms). Some banks will allow interest-only up to a certain age (e.g., they may want you to start amortizing as you approach retirement age if your exit plan is unclear).
• Example Structure: You purchase a property for CHF 3,000,000. The bank is willing to lend 60% (CHF 1,800,000). The loan might be structured as:
  • Tranche A: CHF 1,500,000 interest-only (no regular amortisation, perhaps a 5 or 10-year interest-only term that can be renewed).
  • Tranche B: CHF 300,000 amortising, to be paid off over 15 years. That means about CHF 20,000 per year principal payment, which is ~CHF 1,667 per month (plus interest on the remaining balance).
  In this setup, your monthly interest (if rate is 1.5%) is CHF 2,250 on Tranche A + interest on Tranche B (which gradually declines as you amortise). You also pay CHF 1,667 towards principal on Tranche B monthly. The bulk of the loan (1.5M) doesn’t shrink, but 300k will gradually reduce to 0 after 15 years. At the end of 15 years, you’d still owe 1.5M (plus any refi of the remaining part of B’s interest perhaps), which you could then refinance or payoff from other funds. This way, you keep more cash flow during the term but still reduce some debt.

Split Mortgages and Customized Plans

Swiss banks often allow you to split your mortgage into multiple parts with different terms. This is a strategy to hedge interest rate risk and gain flexibility:

• Mix of Fixed and Floating: You could, for instance, take half your loan as a 10-year fixed and the other half as a SARON floating. This way, you lock in a low rate on part of the debt and gamble (or strategize) on the other part. If rates rise, the fixed portion protects you; if rates stay low or fall, the floating portion saves you money. Many borrowers do a combination, such as 50% fixed, 50% floating, or 70% fixed, 30% floating.
• Staggered Maturities: Another tactic is to stagger fixed-rate tranches. For example, on a large loan you might take CHF 1M fixed 5-year, CHF 1M fixed 10-year. The advantage is that all your debt won’t come up for refinancing at the same time, reducing interest rate timing risk. If after 5 years rates are high, only part of your loan re-rices; the rest is fixed till year 10. Staggering creates a ladder of maturities.
• Multiple Currencies: In some cases, private banks might even offer mortgages in different currencies (particularly if your income is in a currency and you want to avoid FX risk). However, for a Swiss property, a CHF mortgage is standard to match the asset. We mention currency only as a theoretical option; practically, most non-resident buyers will borrow in Swiss francs to fund a Swiss franc-denominated purchase. (You wouldn’t want a scenario where the property is in CHF but your loan in another currency fluctuates – that adds currency risk on top of everything.)
• Lombard Loan Complement: HNWIs might use a Lombard loan (a margin loan against an investment portfolio) in conjunction with or instead of a traditional mortgage. For example, you might not take the maximum mortgage on the property; instead, you pledge some of your stocks or bonds to the bank and they give you a loan secured by those, which you use to help buy the property. The benefit can be 100% financing effectively (property + securities collateral), but the structure and rates differ. We’ll touch more on this in the lender criteria section, especially because some private banks require asset collateral.

Table: Common Mortgage Types & Features

(Note: Often a mortgage will be a mix – e.g., part fixed-rate interest-only, part fixed-rate amortizing. Swiss banks customize based on your needs.)

Lender Criteria and Requirements for Non-Resident Borrowers

Securing a mortgage in Switzerland as a non-resident involves meeting stringent lender criteria. Swiss banks are known for their prudent lending standards, and these can be even more rigorous for foreign borrowers. In this section, we detail the key requirements lenders will evaluate: your down payment and loan-to-value ratio, income and affordability, creditworthiness, and any additional conditions particularly relevant to HNWIs (like asset pledging). By understanding these criteria, you can prepare a stronger application and know what to expect in the approval process.

• Loan-to-Value (LTV) and Down Payment Requirements
• Affordability: Income and Debt Service Ratios
• Credit History and Financial Profile
• Private Banking and HNWI Requirements
• Documentation Checklist for Non-Resident Mortgage Applications

Loan-to-Value (LTV) and Down Payment Requirements

Loan-to-Value (LTV) is the percentage of the property’s value being financed by the loan. Swiss banks usually require the borrower to put down a significant down payment (equity) to ensure the LTV is below a certain threshold.

• Standard LTV for Residents: Swiss residents often can borrow up to 80% LTV on a primary residence, meaning a minimum 20% down payment from the buyer. However, even for residents, at least 10% of the purchase price must come from the buyer’s own cash (not indirectly from pension loans) by regulation. The remaining 10% could potentially come from a pension fund withdrawal or pledge if they are Swiss-based, but for foreigners that’s not applicable.
• Typical LTV for Non-Residents: Banks exercise more caution with non-resident borrowers. It is common that the maximum LTV offered to a non-resident is lower – often around 50% to 70%, depending on the bank’s policy and the property. Many banks cap at around 60% LTV for a holiday home purchase by a foreigner. This implies you should be prepared to contribute 40% or more of the purchase price in cash. Some private banks or international banks might stretch a bit higher (e.g., 70%) if you are a very strong client (especially if you bring assets under management or additional collateral), but expecting 50-60% is prudent.
• Example: For a CHF 5 million chalet, a 60% LTV mortgage would be CHF 3 million loan and CHF 2 million (40%) down payment from you. For a CHF 2 million apartment, 60% LTV means a CHF 1.2M loan and CHF 800k down. This is a hefty equity requirement compared to some countries, but Swiss banks want foreigners to have substantial skin in the game.
• Why Lower LTV? Non-residents are viewed as higher-risk because if something goes wrong (default), it might be more complicated to pursue a borrower across borders. Also, foreign-owned holiday homes might be harder to liquidate quickly. By lending only 50-60%, the bank ensures that even in a downturn they could sell the property and recover the loan since you’ve covered a big cushion.
• High-Net-Worth Considerations: If you are a HNWI with excellent financials, you might negotiate a higher LTV by offering extra guarantees. For instance, if you only want to put 20% down (like CHF 1M on a CHF 5M property), a bank might say: we’ll lend 80% (CHF 4M) provided you place additional assets (stocks, bonds, cash) with the bank as collateral to effectively secure that excess portion. This could be structured via a Lombard loan or pledged assets. We’ll discuss this more in the “Private Banking” subsection. But generally, without such an arrangement, pure real-estate lending for non-residents will require that 30-50% of the property’s value is not financed.
• Property Valuation: The LTV is determined against the bank’s valuation of the property, which might be slightly conservative. If you agreed to pay CHF 3 million for a property but the bank’s appraiser values it at CHF 2.8 million, the LTV will be calculated on CHF 2.8M. In that case, 60% of 2.8M is 1.68M, meaning even if you wanted 60% of the purchase price, the bank might only offer ~56% effectively. It’s rare for valuation to be much lower than price in Switzerland’s transparent market, but just be aware.
• Summary of Down Payment: You should plan to provide at least 40% down for a non-resident purchase, unless you have specific assurances a particular bank will do more. This down payment must be your own funds (savings, sale of other assets, etc.) – you cannot borrow the down payment from another source in Switzerland (borrowing it abroad is technically possible, but then your overall finances must still pass the affordability test). Banks will ask for proof of the source of funds due to anti-money laundering rules, especially for large cash transfers coming into Switzerland.

Affordability: Income and Debt Service Ratios

Swiss banks don’t just look at collateral; they rigorously assess affordability – your ability to service the mortgage payments relative to your income. The key metric often used is that housing costs should not exceed about 33% of your gross income.

• The 33% Rule: A common industry guideline (and Swiss Bankers Association standard) is that the annual carrying cost of the property (mortgage interest + maintenance + any amortization) should be no more than one-third of your annual income. In other words, debt service ratio ≤ 33%. Some banks may stretch to 35% or even 40% if you have exceptional wealth or a strong profile, but 33% is the general rule of thumb.
• Imputed Interest Rate for Calculation: Importantly, banks do not use the actual low interest rate for this calculation, but a hypothetical higher rate (often ~5%) to stress-test your affordability. This is because they want to ensure you could pay the mortgage even if interest rates rise significantly in the future. Typically, they assume ~5% interest + 1% of property value for maintenance/operational costs + any required amortization. This conservative approach can be a shock for some borrowers. For example, even if your actual interest rate is 1.5%, the bank will calculate affordability as if it’s 5%.
• Example: You want a CHF 1,000,000 loan. They assume 5% interest = CHF 50,000/year interest. Maintenance they might add ~1% of property value (say property is 1.5M, so ~15k). If amortization is required, add that (say 10k/year). Total ~CHF 75k/year cost in their eyes. They then ask: is your annual income at least 3x that, i.e. ≥ CHF 225k? If yes, you pass the affordability test. If not, they might require a smaller loan (larger down payment) or no deal.
• Income Documentation: As a non-resident, you’ll need to document your income thoroughly. Typically, banks will ask for:
  • Last 2-3 years of audited financial statements (if self-employed or business owner) or tax returns.
  • Salary slips and an employer letter (if you’re salaried).
  • Perhaps bank statements showing the flow of income.
  If you have multiple income sources (investments, rental income from other properties, etc.), detail those. They may count some of it if it’s regular and reliable. For HNWIs, sometimes investment income isn’t straightforward (e.g., capital gains might not count, but dividends or interest could). Be prepared to explain your overall cash flow.
• Foreign Exchange Considerations: If your income is in a currency other than Swiss francs (which is likely, since you live abroad), banks might stress-test further for currency risk. Some might apply a haircut or require that your income in CHF terms still covers the 33% rule after considering possible currency depreciation. For example, if you earn in USD or EUR, they could assume a scenario where that currency weakens by X% against CHF and see if you’re still okay. This isn’t always explicitly done, but informally, if your income is in a volatile currency and all your debt is in CHF, they will be cautious. Another approach is they might encourage/require you to take the loan in the same currency as your income to avoid FX risk – but since the property is in CHF, a CHF loan is the norm. So more likely they mitigate by limiting LTV or requiring larger income buffers.
• Age and Remaining Work Life: Banks will consider your age. If you are, say, 60 years old and retired, you may not have “income” in the traditional sense, but rather assets. Some banks have a policy that the mortgage should ideally be paid down to a sustainable level by retirement age (~65). If you are older, they might require a lower LTV or proof of sufficient pension/asset income. If you are younger with a high income, you’re in a better spot. That said, many HNWIs have substantial unearned income (investments) or business income that continues beyond typical retirement, which you can demonstrate.
• Existing Debts: Lenders will ask about your other liabilities. If you have large loans elsewhere (like mortgages on other properties, business loans, etc.), they factor those obligations when computing affordability. For example, if you already spend $100k/year on loan payments for properties in other countries, that could reduce what they view as available income for this Swiss mortgage. Full disclosure is important because Swiss banks are thorough (and they may do background credit checks or request references). However, note that many countries don’t have centralized credit score systems accessible to Swiss banks, so they rely on the documents you provide. Honesty is crucial; any material omission could derail the process later if discovered.
• Joint Income: If you are buying with a spouse or partner, and both will be co-borrowers, they will consider combined income. If only one person is the official buyer/borrower (perhaps for tax reasons or otherwise), they may still look at household income if relevant. But typically, they want the borrower(s) on the hook to have sufficient income.
• For HNWIs, income sometimes can be a tricky point: you might be asset-rich but with modest formal income (some ultra-wealthy individuals don’t draw big salaries). Banks can make exceptions in such cases by looking at your overall wealth and possibly requiring more collateral, but it’s not guaranteed. In some instances, if income is insufficient but you have, say, tens of millions in liquid assets, a bank might proceed if you keep substantial assets with them (so they have comfort you can pay from those assets if needed). Essentially, the more you look like a typical salaried borrower with a high steady income, the easier; the more your profile is unconventional (e.g., low income, high assets), the more you will need to negotiate a bespoke solution or use asset-based lending.

Credit History and Financial Profile

Swiss banks will evaluate your creditworthiness. Unlike in the US or UK, there isn’t a global credit score they can pull on a foreign national, but they will qualitatively and quantitatively assess your financial health.

• Clean Financial Record: You will likely be asked to self-declare any outstanding legal or credit issues. This can include bankruptcy filings, outstanding judgments, or defaults anywhere in the world. Given Swiss banking’s reputation, they take reputational risk seriously too – so any major red flags could cause a decline. If you have a clean record, no significant negative marks, that’s expected.
• Credit Reports: In some cases, the bank might request a credit report from your country (for example, if you are from the UK, an Experian report; if from the US, a credit report or score). This is more common if you go through a subsidiary or partner that can access such info. If your local credit report is strong (no late payments, etc.), it helps. If you have any negatives, be ready to explain them.
• Assets and Net Worth: Being an HNWI is a big plus. Banks will want to get a picture of your net worth – not just the property and loan in question. They often ask for a statement of assets and liabilities. This includes cash, investments, other properties, businesses, etc. If you have a high net worth relative to the loan, that significantly boosts confidence (some banks effectively lend on a “wealthy client” basis, meaning if the loan is a small fraction of your net worth, they worry much less). They might also consider your liquidity – do you have ample liquid assets to cover payments if your income fluctuates? HNWIs sometimes have illiquid wealth (like equity in a private company); if so, emphasize whatever liquidity you do have or be prepared to allocate some to the bank as a cushion.
• Citizenship/Nationality: While officially lending decisions shouldn’t discriminate by nationality, the reality is that some banks have internal country risk assessments. For example, US persons come with FATCA compliance burdens; some banks shy away from US clients unless through their American desks. Similarly, some banks have restricted lending to citizens of certain countries deemed higher risk or with legal complications. If you come from a sanctioned country or a very unstable jurisdiction, it could be trickier. That said, as an HNWI, you may have multiple citizenships or residences, which can mitigate issues. Be aware that you’ll need to provide copies of passports, IDs, and often proof of residence (to check tax compliance etc.). Swiss banks will run anti-money laundering (AML) and Know-Your-Customer (KYC) checks on you thoroughly due to strict regulations. This is standard procedure for any significant financial relationship in Switzerland.
• Source of Funds: You must demonstrate that the money you are using (for the down payment, fees, etc.) comes from legitimate sources. Be ready with documentation like sale agreements (if you sold a company or property to fund this), investment account statements, or inheritance documents if relevant. Large transfers into Switzerland will be scrutinized. The banks’ compliance departments often request explanations for large deposits. It’s not personal; it’s the law. So, the cleaner and more documented your wealth trail, the smoother it goes. For instance, “funds derived from the sale of XYZ property in London, see attached closing statement” or “savings from annual bonus income, see past 3 years W-2 forms” will satisfy queries.
• Leverage and Guarantees: In cases where a straightforward mortgage doesn’t fit (say you want a higher LTV or your income is borderline), the bank might consider additional guarantees. This could mean:
  • Pledging additional collateral (like a portfolio of stocks/bonds held at the bank, or even a cash collateral account).
  • A personal guarantee from a third party (less common, but perhaps if you have a very creditworthy family member or business entity willing to guarantee).
  • Shorter loan term or lower amount to fit their risk comfort.
  Being flexible and showing you’re willing to work with the bank’s risk concerns can help get an approval. For example, you might originally want 70% LTV, but the bank is only comfy at 60%. If you then say, “Alright, I’ll do 60% mortgage, and perhaps I’ll take a separate Lombard loan for 10% secured by my portfolio,” the bank might then be okay because the risk is mitigated by extra collateral (two smaller loans each well-secured, instead of one big one).

Private Banking and HNWI Requirements

As a high-net-worth individual, you will likely interact with the private banking side of a lender. Many Swiss banks have specialized teams for “International Mortgage” or “Lombard lending for real estate” that cater to wealthy foreign clients. Here’s how that can affect your mortgage process:

• Assets Under Management (AUM) Expectations: Private banks often require or strongly encourage assets to be placed with them as part of the lending relationship. It’s not usually an official condition like “must bring $1M in assets,” but in practice, you’ll get better terms if you do. Some banks are explicit: for example, a bank might only grant a mortgage to a non-resident if you bring at least CHF 1 million in investable assets to their wealth management arm. This is because the bank then makes money managing your portfolio, and it also gives them extra security. If you’re not willing to do this, you might be limited to banks that focus purely on mortgage lending (like some cantonal banks or a few that don’t require AUM, but they might not deal with foreigners readily), or you’ll pay a higher interest rate.
• Tip: Consider consolidating some of your assets with the bank where you seek the mortgage. Often, having an account and assets there greases the wheels. They might even count those assets as part of the collateral or give a slight interest rate reduction. Also, as a private banking client, you get a dedicated banker who can advocate for your loan internally.
• Lombard Loan Combination: If you plan to finance more than what a mortgage can cover, or don’t want to liquidate investments for the down payment, you can discuss a Lombard loan. A Lombard loan is a loan against your investment portfolio. For instance, you have a $5M stock portfolio. The bank might lend you 50% of that value (depending on the assets) – so $2.5M – at a low rate, which you can use towards the property. This effectively increases your borrowing capacity without breaking the LTV rules on the property, because that $2.5M loan is secured by your portfolio, not the real estate. Many private banks will be happy to arrange both a mortgage and a Lombard facility. They might even package them: e.g., you put 20% down cash, get 60% mortgage, and for the remaining 20% they give a Lombard loan if you pledge sufficient liquid assets. This way, in economic terms you financed 80% of the purchase, but officially the property only has a 60% mortgage on it (the other loan is separate). Private banks often use this method to offer up to 100% financing to top clients, by securing different pieces with different collateral. Keep in mind, a Lombard loan exposes you to margin calls if your portfolio falls in value – it’s like any margin loan. So one must manage that risk.
• Interest Rates and Fees for HNWIs: Sometimes private banks have slightly higher mortgage rates than retail banks (because they are giving you a service with flexibility, etc.), but this can be offset by negotiation, especially if you’re giving them AUM. They might waive certain fees or match a competitor’s rate if you have a substantial relationship. Also, some private banks charge an arrangement fee (maybe 0.5% of loan) for complex deals – ask about this. If your loan is large (multi-million), you have room to negotiate these points.
• Tailored Solutions: HNW clients often get more bespoke underwriting. Instead of a by-the-numbers approach, the credit committee will consider your entire profile. For example, maybe your formal income is low but you have a trust fund or large dividends – they might approve despite failing the usual 33% rule if you demonstrate your cash flow in other ways. Or if the property is slightly unconventional, they might still do it to cement the relationship with you. Use that to your advantage: present a strong case, be transparent, and often the bank will find a way to make it work if they want you as a client.
• Nationality Restrictions with Private Banks: Some Swiss private banks are more open to various nationalities than others. Generally, big ones (UBS, etc.) have no issue serving clients worldwide (subject to sanctions law). But a boutique private bank might say “we currently don’t take new clients from Country X” due to compliance workload. It’s something to check with your chosen bank. If you encounter that roadblock, another bank or an international mortgage broker can direct you to one that will work with you.
• Turnaround and Service: The private banking route can sometimes be faster in decision-making (because you have a senior banker pushing it) or slower (if committees are involved). It depends on the bank. Some will practically pre-approve you quickly if you’re a known quantity. Others might take weeks to deliberate. Engage early with them.

Lender Criteria Recap: Swiss lenders demand solid equity (big down payments) and strong proof of income/wealth from non-resident borrowers. Typically, you’ll need ~40% cash down, a debt service ratio under 33%, a clean financial record, and often a willingness to bank with them. The process is more involved than simply checking a credit score – it’s a private banking style due diligence. As an HNWI, leverage your strengths (net worth, assets) to negotiate favorable terms, but also be ready to document everything.

Documentation Checklist for Non-Resident Mortgage Applications

To ensure your application process goes smoothly, prepare the following documentation (common requirements):

1. Proof of Identity: Passport copies (and residence visa for your country if applicable). If the property is being bought by multiple people, IDs for each.
2. Proof of Address: Utility bills or bank statements showing your overseas residential address (for KYC).
3. Bank Statements: Last 6-12 months of personal bank statements to show cash flow and existing savings for down payment.
4. Income Proof:
   • If employed: last 3 months’ payslips; a letter from your employer stating your position, salary, and perhaps length of employment; last 2 years of income tax returns or annual income statements (to verify bonus, etc.).
   • If self-employed/business owner: last 2-3 years of company accounts (profit/loss, balance sheet), plus personal tax returns. Possibly a letter from your accountant confirming your income.
5. Asset Statements: Recent statements for investment portfolios, stock accounts, pension funds, etc., to document your net worth. If you have significant assets, list them with approximate values (real estate holdings, businesses, etc.). This gives the bank a holistic view.
6. Liability Statements: Details of existing mortgages or loans: outstanding amount, property value (for other real estate loans), monthly payments. They might ask for loan statements or credit reports.
7. Source of Down Payment: If the down payment is sitting in an account, a statement showing the funds. If you will move funds from another account or country, a paper trail (e.g., if you recently sold something, include that sale contract or if you’re using an inheritance, a letter explaining it). Essentially, a narrative of where the down payment money comes from.
8. Property Information: If you’ve selected a property, you’ll need the details to get a mortgage offer:
   • Sales brochure or description (location, type of property).
   • Preliminary purchase contract or reservation contract if signed.
   • Price and any valuation or appraisal if you had one (often the bank will do their own valuation though).
   • Rental details if applicable (e.g., if the property has a rental history and you plan to continue that).
   • For a condominium, possibly the building financials or bylaws (some banks ask to ensure no weird obligations).
   • If it’s a chalet, maybe proof of land size and floor area (to ensure Lex Koller compliance). This might be more for the notary, but sometimes banks also check.
9. Legal Permit Confirmation: While not needed at initial application, eventually the bank will require confirmation that the Lex Koller authorization is or will be granted (they typically condition final loan approval on you obtaining the purchase permit). Sometimes a bank won’t fully approve the mortgage until they know the permit is in process or approved – since if you can’t legally buy, there’s no loan. It’s a bit of a chicken-and-egg that is usually resolved by all parties working in parallel (you apply for the permit and the mortgage around the same time).
10. Insurance (if required): Some banks might want you to have life insurance or mortgage insurance for large loans, or at least property insurance. Generally, property (building) insurance is mandatory in Switzerland (and automatically done via canton or private insurer for fire etc.), and the bank will want to be an interested party. Life insurance is not mandatory unlike in some countries, but if you are older or the sole earner, they might suggest it. Not required in most cases though.

Being organized with these documents will speed up the approval. Expect to translate some documents if they are not in English, German, French, or Italian (the bank will tell you if they need an official translation). Also, be prepared for follow-up questions – Swiss banks are detail-oriented. They might come back and ask for clarification on a specific large transaction in your statements, or ask how you plan to use the property (to ensure compliance). Responding promptly and thoroughly will keep things moving.

In the next section, we’ll examine the interest rate environment and financing costs you’ll encounter, now that you have a sense of how much you can borrow and on what terms.

Interest Rates and Financing Costs

Understanding the interest rate environment in Switzerland and the various costs associated with property financing is crucial for planning your investment. Switzerland has historically enjoyed low interest rates, especially in the last decade, though rates have seen some fluctuations recently. In this section, we’ll look at how interest rates for mortgages are determined, what current rates might be, and what other costs (fees, insurance, etc.) you should budget for when obtaining a mortgage as a non-resident HNWI.

• Current Mortgage Interest Rates in Switzerland
• Mortgage-Related Fees and Costs
• Negotiating the Best Rate and Terms
• Table: Sample Mortgage Scenarios and Costs
• Ongoing Mortgage Management and Currency Considerations

Current Mortgage Interest Rates in Switzerland

Swiss mortgage rates are influenced by the Swiss National Bank (SNB) policy rate, the Swiss franc money markets, and competitive dynamics among banks. They can change over time, so always check the latest figures when you’re considering a loan. As of late 2024 to early 2025, here’s an overview of the rate landscape:

• 10-Year Fixed Rates: These are a benchmark for long-term mortgages. In recent times, 10-year fixed rates have ranged roughly from 1.1% to 2.0% for top-tier clients. By late 2024, rates actually eased slightly after a period of rising, with many banks offering ~1.3–1.7% for 10-year fixed loans to low-risk borrowers. For example, one large bank’s December 2024 rate for 10-year fixed was ~1.55%. Keep in mind these rates assume a conservative LTV and good financials; if you are pushing limits (like high LTV or lower income), the bank might add a small margin. But generally, Swiss fixed rates remain very low compared to most countries.
• Shorter Fixed Terms: 5-year fixed mortgages might be slightly cheaper than 10-year (though the difference isn’t huge). You could see 5-year rates in the ~1.0–1.3% range, depending on the yield curve. Sometimes the curve inverts or flattens, making 10-year almost the same cost as 5-year. Check at the time; in early 2025, the yield curve had flattened with the expectation of stable SNB rates, so 5-year and 10-year were fairly close.
• SARON (Floating) Rates: Floating rates are typically quoted as “SARON + X%”. If SARON (the overnight rate) is around, say, 1.0%, and the bank’s margin is 0.8%, you pay 1.8%. If SARON moves, your rate moves. In practice, banks often give you an indication like “current SARON-based rate would be ~1.7% p.a.”. Over 2023-2024, as SNB raised rates from negative to +1%, SARON mortgages went from near-zero to around 1.5-2.0%. If SNB holds rates steady, your SARON rate will hover at that level; if SNB cuts, it can drop. Some banks have a floor (e.g., if SARON goes negative again, they might floor it at 0 for calculation). Always ask if there’s a floor or cap on the product.
• Rate Variations by Lender: You may find slightly different rates between:
  • Big banks (UBS, CS/UBS, Credit Suisse pre-merge, etc.) – competitive but might not be the absolute lowest; however, they offer convenience and an international desk for foreigners.
  • Cantonal banks – some cantonal banks offer very low rates to residents; to non-residents they might lend only in special cases, but if they do, the rate could be quite good.
  • Insurance companies & pension funds – in Switzerland, insurance companies (like Swiss Life) also offer mortgages, sometimes with attractive long-term fixed rates, as they like long stable returns. As a foreigner, accessing these might be possible if you go through a broker.
  • Private banks – might charge a bit more unless you have a huge relationship, because they emphasize service and flexibility. Or they might match the market if they want your AUM.
  The differences are usually on the order of 0.1-0.3 percentage points. Given a large loan, even a 0.1% difference matters (on CHF 2M, 0.1% = CHF 2k/year). So it’s worth shopping around or negotiating.
• Risk-based Adjustments: Swiss mortgage rates are generally very standardized (it’s not like each person gets a wildly different rate based on a credit score). However, there are a few factors that can adjust your offered rate:
  • LTV: Some banks have tiered pricing – e.g., loans above 66% LTV might have a slight premium. As a non-resident with likely ≤60% LTV, you might actually fall in the best bracket by default.
  • Loan size: Ironically, very large loans might get you a slightly better rate in private banking (because you’re a valued client), or in some cases a slightly higher rate (because the bank wants to spread risk – but usually HNW loans get preferential pricing). It depends on the institution.
  • Property type: If a property is harder to finance (maybe an unusual property, or if it's a pure investment multi-unit building), a bank could charge more. But for typical holiday homes, this isn’t an issue.
  • Nationality/complexity: While not explicitly stated, if a bank anticipates more admin work (FATCA for Americans, etc.), they might bake that into costs elsewhere, maybe an upfront fee rather than rate.
• Interest Rate Outlook: It can be useful to discuss with your banker the outlook. In mid-2020s, inflation had ticked up globally, central banks raised rates, then Switzerland started easing slightly as inflation was controlled. If you believe rates will remain relatively low, you might be comfortable with shorter fixes or SARON; if you think inflation could return, locking in a long term is wise. Economists in Switzerland often provide rate forecasts which your banker can share. For instance, by end of 2025 some expected modest rate declines, meaning forward 10-year rates were slightly lower. But predictions are not guarantees.

Mortgage-Related Fees and Costs

When taking a mortgage, you should budget for several additional costs beyond the interest rate:

• Arrangement/Commitment Fee: Some banks charge a one-time fee for arranging the mortgage (also called an origination fee). This can vary widely. Many Swiss banks do not charge a large origination fee, especially for domestic clients – they make their money on the interest margin. But for complex non-resident cases or through certain channels, you might see a fee. It could be a flat fee (e.g., CHF 1,000–CHF 2,000) or a percentage (0.25% to 1% of the loan).
• Valuation Fee: The lender may require a valuation/appraisal of the property. Many banks have internal valuation teams or use the sales price and comparables. In cases where they send an external appraiser, they might charge you for it (could be a few hundred to a thousand francs). Often for a standard residential property, they won’t do an extensive costly appraisal – a drive-by or desk valuation suffices. But budget a small amount just in case.
• Legal Fees for Mortgage Deed: In Switzerland, when you get a mortgage, a mortgage note (Schuldbrief / cédule hypothécaire) is either created or transferred in the land registry. There will be fees for registering this mortgage security. These are typically part of the notary/land registry fees on purchase. Sometimes, the bank’s lawyers will charge for drafting loan agreements if it’s a big deal. Often, however, the loan contracts are fairly standard documents provided without charge. In any event, land registry fees for the mortgage entry might cost a few tenths of a percent of the mortgage amount (varies by canton). Some cantons roll it into the purchase transfer tax bill. Ask the notary for an estimate of mortgage registration costs.
• Insurance:
  • Property Insurance: Buildings in Switzerland must be insured against fire and hazards. Many cantons have a state monopoly insurer for this basic coverage. Premiums are usually modest and often calculated per mille of value. This is not exactly a lender fee, but you’ll need to get insurance and list the lender as beneficiary up to the loan amount. If you’re buying an apartment (condo), the building likely already has an insurance policy managed by the owners’ association, so you’d just pay your share through building fees. For a chalet, you’ll take out a policy. The bank will ask for a copy of the insurance certificate. Cost is relatively low (maybe a few hundred francs a year for a multi-million-franc property – Swiss insurance is efficient).
  • Life Insurance (Optional): As mentioned, not mandatory by law or generally by banks for mortgages. But if you have heirs or specific estate planning needs, you might consider a life insurance policy to cover the mortgage in case of death. Premiums depend on age/health. Some HNWIs skip it because they have ample other assets. Swiss banks won’t typically force an HNWI to get life insurance unless the income is heavily dependent on one person and they’re concerned about repayment if that person passes. It remains optional.
• Foreign Exchange Costs: If your funds for down payment or ongoing payments need to be converted to CHF, consider the FX cost. Banks will often let you hold a CHF account you fund from abroad. If you wire, say, USD or EUR and convert to CHF for the purchase, the exchange rate spread can be a cost. For large sums, you can usually negotiate a tighter FX rate or use a specialized FX broker. Also, if you have rental income in CHF (from the property) but your main income is in another currency, you’ll be doing some conversions back and forth potentially. While not a fee per se, factor currency fluctuations and conversion costs into your budgeting.
• Notary and Property Purchase Taxes: While not a part of the mortgage contract, these are significant costs associated with purchasing that you must pay, typically upfront at closing:
  • Notary Fees: The notary charges for drafting and executing the sale deed and registering the change of ownership. In Switzerland, notary fees are often around 0.2% to 1% of the property price, varying by canton and fee structure. Some cantons regulate the fee by a formula or scale. On a CHF 2 million property, notary fee might be say CHF 10k (0.5%). In some cantons the notary also collects the land registry fee in that. Notary fees are often split between buyer and seller in some regions, or all on the buyer in others – it’s often negotiable or customary one way or the other. Clarify this in the purchase contract.
  • Property Transfer Tax: Many cantons levy a transfer tax (also called “stamp duty” or “purchase tax”) on real estate transactions. This is separate from any capital gains tax the seller pays. It’s usually a percentage of the price. For example, Geneva has about 3% transfer duty; Vaud around 3.3% plus some additional fees (effectively ~5% including notary); Zurich notably has no property transfer tax aside from minimal admin fees; Valais around 1.5%. As a buyer, you need to pay this tax at closing (often handled by the notary who forwards it to the canton). If you’re buying via a share deal (buying a company that owns the property) sometimes you can avoid it, but that’s complex and usually only done for very high-end deals and commercial assets. For personal purchases, assume you’ll pay this tax. Example: For a CHF 3 million chalet in Vaud, the total transaction costs (notary + cantonal tax) might be roughly CHF 150k (5%). In Valais, perhaps CHF 60k (2%). In Zurich, maybe CHF 15k (just fees, no tax). It’s a wide range – know your canton’s rules. We cover ongoing taxes in the next section, but note these one-time costs here because they affect your immediate cash needs (and sometimes lenders allow part of these costs to be included in the mortgage if LTV allows, but usually the expectation is you cover them out of pocket).
• Bank Account and Administration: As a foreign client, you’ll likely open a Swiss bank account to handle the transactions. Some banks have account maintenance fees, especially for non-resident accounts. Private banks might waive fees if you have high balances. Retail banks might charge monthly fees (e.g., CHF 30/month for an account package). These are minor in the grand scheme, but keep track. Additionally, if the bank requires any special services (like couriering documents internationally, etc.), they might charge those costs to you.
• Broker or Advisor Fees: If you engaged any advisor (legal or financial) to assist you aside from the bank and notary – for instance, a lawyer to review the purchase contract, or a tax advisor to structure the deal – factor their fees as well. It’s often wise to have your own legal counsel especially if you don’t speak the local language, though many foreign buyers rely solely on the notary (who is neutral) and perhaps the bank’s guidance. HNWIs might have a family office or advisor who looks at everything; their costs should be considered part of your investment cost.

Negotiating the Best Rate and Terms

Given the relatively low interest rates in Switzerland, the difference between an average and a great deal might seem small in percentage terms, but even 0.2% on a multi-million loan is significant over time. Here are some tips for getting the best mortgage deal:

• Broker Service: Especially if you don’t have an established banking relationship in Switzerland, it can pay to talk to multiple lenders. Each bank has its own approach to non-residents. Some might outright not lend to you due to internal policy, others will welcome you. Among those who will, get indicative offers. You can do this yourself or engage a mortgage broker experienced in international clients. Brokers like Enness, for example, specialize in HNWI mortgages and can approach several banks on your behalf. They’ll know which lenders are most flexible for, say, an American buying in Switzerland vs. a Singaporean, etc. Brokers often know the real rates banks can do (which might not be advertised) and can leverage competition. Just ensure any broker you use is reputable and clear about fees.
• Leverage Your Assets: As noted, offering to bring assets to the bank can improve the deal. This might not directly lower the interest rate in all cases, but it can waive an expectation of a higher margin. If one bank knows you’re considering another, and you mention that the other is your existing private bank where you have $X million, the first bank might try harder to win you by rate or other benefits. This is a bit of an art – you don’t want to seem non-committal, but you do want them to realize you have options.
• Fixing at the Right Time: If you decide on a fixed rate, note that you can often lock in a rate (fix) a few months before drawdown. For example, if your purchase closing is in 3 months, you might lock today’s rate via a “forward fix.” Some banks allow a forward period of 3-6 months at no extra cost, beyond that they might charge a small premium. In a rising rate environment, locking early can save you money. In a falling rate environment, you might wait longer. Timing the lock is a mini game – but as an HNWI, consider that trying to save a tiny amount by timing might not be worth potential risk of things moving against you. Decide your risk tolerance.
• Discuss Currency or Multi-Product Discounts: If you use multiple services (say you also need a forex hedging line, or you engage the bank’s investment management), sometimes they give a holistic relationship discount. It might not be explicit, but you can hint: “I will be bringing over CHF 5M in assets for you to manage; can we ensure the mortgage rate is the best possible?” This signals the bank to perhaps drop that extra 0.1% cushion they put.
• Read the Fine Print: A “low rate” might hide some restrictive terms. For example, some mortgages might lock you in with the bank beyond the fixed term (less common in Switzerland, but check if there’s any minimum holding period). Or they might enforce an Asset Under Management condition (e.g., if you withdraw your money from their bank, the mortgage rate increases by X). If any such conditions exist, weigh them. It could be acceptable if you plan to keep assets there anyway.
• Annual Reviews: Many banks will do an annual check (especially if interest-only) asking for an updated insurance certificate or asking if anything changed. Rarely, if your financial condition deteriorated severely, they might get concerned. But if you maintain the relationship well, you won’t face sudden changes in terms. It’s not like margin loans where they reprice overnight – mortgages are more stable.
• Refinancing Option: Down the line, if you ever feel your rate is no longer competitive, you could consider refinancing with another bank after your fixed period ends (or pay the penalty if worthwhile). Swiss mortgages can be refinanced, though switching banks as a non-resident requires repeating much of the process and costs. If you maintain good standing, your existing bank will often offer to renew at competitive prevailing rates. But it’s good to keep an eye on market rates at renewal time and negotiate then too.

Table: Sample Mortgage Scenarios and Costs

To illustrate how interest rate and costs come together, here are two example scenarios:

(Figures are illustrative; “Notary & Tax Costs” combine estimated notary fee and property transfer tax for that canton.)

These examples show how an HNWI might structure financing differently based on goals: one maximizing leverage (but still limited by Swiss norms), another optimizing cash flow with interest-only and benefiting from relationship pricing.

Ongoing Mortgage Management and Currency Considerations

Once your mortgage is in place, plan for its management:

• Payments: Set up automatic debit from your Swiss bank account to pay interest (and amortization, if any) on schedule. Since you’ll likely not be in Switzerland day-to-day, automation prevents missed payments. Swiss banks typically debit interest quarterly for fixed-rate mortgages (e.g. every 3 months) or even annually in some cases; for floating, often quarterly as well. Some might do monthly. Clarify the frequency. Ensure your account has sufficient funds before each due date.
• Funding the Account: If your income is abroad, you might need to periodically transfer money to your Swiss account to cover the mortgage. Try to coordinate transfers when exchange rates are favorable and perhaps in larger chunks to minimize fees. You could also keep some cash buffer in CHF in the account as a cushion.
• Currency Risk: If your mortgage is in CHF and your earnings are, say, in USD or GBP, you are exposed to currency risk – if CHF strengthens, it costs you more in your currency to service the same CHF debt. Over the past decades, the CHF has tended to be strong (safe-haven currency). For example, a USD-based investor saw CHF appreciate from about 1.0 USD/CHF in 2019 to 1.13 by 2023 (meaning CHF got stronger). You can mitigate this risk by:
  • Hedging: Using FX forward contracts or options to lock in exchange rates for your future payments (banks can provide these). But hedging has its own costs.
  • Asset matching: If you have some assets in CHF (like Swiss stocks or a CHF income from the property rental), that provides a natural hedge.
  • Diversifying currency of borrowing: Some might consider borrowing in their home currency from an international bank for the Swiss property. However, most find it simpler to take the CHF loan and manage FX with their broader portfolio. If you are very concerned about CHF strengthening, one could consider a multi-currency loan where part is in your home currency – but few Swiss banks will do that for a Swiss home, as mentioned.
• Rate Reviews: Keep an eye on interest rates, especially if you have a floating loan or if your fixed term will expire in a couple of years. Start discussions with the bank 6-12 months before a fixed term ends to explore renewal options. They often can offer a deal in advance. If you have a SARON mortgage and SNB is expected to change rates, you might think of switching to fixed if a big rise is on the horizon (banks allow conversion from floating to fixed generally at quarter ends without penalty – effectively ending the floating and starting a fixed at current rates).
• Communication with Bank: Maintain a good relationship with your banker. Update them if there are positive changes in your financial situation (they can note that, which is good if you ever need to request something). Likewise, if you foresee any difficulty or change (e.g., you plan to change the use of the property or sell it or move to Switzerland and make it primary), let them know, they can advise on implications. Swiss banks appreciate transparency and will work with you if you have been a cooperative client.
• Mortgage Statement and Tax: Each year, the bank will issue a statement of interest paid. As a non-resident owner, you will need that for Swiss tax filing (to deduct the interest against property income/imputed rent). We’ll cover tax next, but note that you should keep those statements. They usually send them in January for the previous year.
• Overpaying or Reducing Loan: If you come into extra money and want to pay down the mortgage, check your terms. If it’s interest-only and within a fixed term, you might not be allowed to reduce principal (or if you do, they still charge interest as if you hadn’t). If it’s amortizing, you might be able to pay faster with permission (some allow double payments without fee). For floating, you can often prepay at any quarter. For fixed, you’d face breakage costs if outside the schedule. Alternatively, you can invest that extra money elsewhere if the mortgage rate is low. Many Swiss property owners deliberately keep mortgages and invest spare cash, due to low rates and tax efficiency. As a foreigner, consider your global portfolio – maybe paying off a 1.5% loan isn’t priority if you can earn more on investments. But if you hate debt or FX risk, early repayment could give peace of mind. Just do it in a way that minimizes penalties (e.g., upon term expiry).

We’ve now covered the core financial aspects: how much you can borrow (LTV), what it costs (interest rates), and how to manage the loan. Next, we’ll turn to the tax implications of owning Swiss property as a non-resident – a crucial area to understand to avoid surprises and to possibly optimize your investment.

Tax Implications for Non-Resident Property Owners

Buying and owning property in Switzerland will subject you to certain Swiss taxes, even as a non-resident. It’s important to grasp these obligations to remain compliant and to plan for the ongoing costs. The tax landscape includes income tax on rental or imputed income, wealth tax on Swiss assets, property-related taxes, and capital gains tax on sale. This section breaks down each of these as they apply to non-resident HNWIs, and also touches on how having a mortgage impacts your tax bill (hint: it can provide some deductions). We’ll also note any differences from what a Swiss resident would experience.

• Income Tax on Rental Income and Imputed Rental Value
• Wealth Tax on Swiss Assets
• Property Transfer and Annual Ownership Taxes
• Inheritance/Gift Taxes
• Mortgage Interest and Tax Deductions
• Capital Gains Tax on Sale
• Example: Putting It All Together

Income Tax on Rental Income and Imputed Rental Value

Non-residents are subject to Swiss income tax on Swiss-sourced income – which includes income from real estate in Switzerland. Even if you do not rent out the property, Swiss tax law considers that an owner-occupied second home generates a taxable value called imputed rent.

• Rental Income (if you let the property): If you rent out your Swiss property (e.g., you lease it long-term to a tenant, or do short-term holiday rentals), the net rental income is taxable in Switzerland. As a non-resident, you won’t have a full Swiss income tax return like a resident, but you will file a tax declaration for the property’s income and be taxed at the property’s location (canton/commune).
• Calculation: Generally, you can deduct expenses related to the property from the rental income. Deductible expenses include mortgage interest, maintenance and repairs, insurance, and sometimes a flat allowance for other costs. The remaining net profit is taxed.
• The tax rate for non-residents on property income is the same scale as for residents, but since this might be your only Swiss income, it could fall into a lower bracket – however, some cantons will determine the rate based on a notional global income. For high-end properties, rental income can be significant, possibly pushing you into higher brackets.
• To simplify: Suppose you have CHF 100k/year in gross rental income from your chalet (renting it part of the year). If you pay CHF 30k in mortgage interest, CHF 10k in maintenance and fees, your net taxable income might be CHF 60k. You would then pay Swiss income tax on CHF 60k according to the local rates (which vary by canton/commune and are progressive). This could be on the order of 0-15k in tax, depending on rates. For instance, in some cantons a CHF 60k income for a non-resident might incur ~20% combined tax = CHF 12k. In others with lower taxes, maybe 10%. It’s worth consulting the specific cantonal tax office or a tax advisor for an estimate.
• Switzerland has double tax treaties with many countries. Typically, the rental income will be taxable in Switzerland (as the source country) and usually exempt or given a credit in your home country, depending on the treaty. Many treaties follow the rule that real estate income is taxed where the property is. Check the treaty between Switzerland and your country of residence to avoid double taxation.
• Imputed Rental Value (if you use it yourself): If the property is not rented out (or only used by you), Swiss tax authorities still levy tax on the notion that you receive a benefit from owning the home. This is the imputed rental value (valeur locative / Eigenmietwert). Essentially, they estimate what the property would rent for in the open market (usually a bit below true market rate, often around 60-70% of market rent) and treat that as taxable income to you. Yes, you read that right – even if you don’t actually get rental income, they tax you as if you had. This concept exists for Swiss residents on their primary homes, and it also applies to non-resident owners on their second homes in Switzerland.
• The rationale is that owning a home free of rent is a benefit, and they want to tax evenly those who invest in property versus other assets.
• For a holiday home, the imputed rent might be based on a formula or appraisal by the local tax office. Typically, it could be e.g. CHF 30,000/year for a chalet that might rent for CHF 50,000/year in peak weeks. You will get an official valuation.
• You will then include that CHF 30k as income on your Swiss tax form.
• The good news: You can also deduct allowable expenses against it, particularly mortgage interest and maintenance. Mortgage interest is fully deductible (up to certain limits we’ll mention), and maintenance can be either actual costs or a standard deduction (some cantons let you deduct a flat percentage of the imputed rent or property value for maintenance if you don’t want to itemize). Many owners find that interest and expenses can largely or fully offset the imputed rent, meaning little to no net taxable income.
• For example, imputed rent = CHF 30k. Say you paid CHF 25k interest and CHF 5k upkeep = CHF 30k deductions. Then net taxable = 0. If interest+expenses exceed imputed rent (common for highly leveraged property), you can generally use the loss against other Swiss income (though as a non-resident you might have no other, and you can’t get a refund beyond zero tax – losses might not carry forward in some cantons for non-resident cases, or they might just go unused).
• Cantonal/Communal Variations: Taxation in Switzerland is at three levels – federal, cantonal, and communal. Federal tax will apply a uniform rule on imputed rent and allow interest deduction up to a limit (limit being you cannot deduct more interest than you have in income from movable and immovable property plus CHF 50k – a rule to prevent large net interest deductions – but as a non-resident with probably just that property, you won’t exceed that). Cantons and communes have their own rates. Some cantons have relatively high taxes (e.g., Geneva, Vaud, Bern), others low (Zug, Schwyz). However, if you’re non-resident, often the specific commune matters less for income tax because many cantons levy a special tax rate for non-residents on real estate (like a fixed rate or they treat it as if you were a resident of that commune). It really depends. Typically, they will treat it as if you had that income in that commune and tax accordingly.
• Withholding Tax? Some countries withhold tax on rental income for non-resident owners (like the US requires withholding by tenants or managers). Switzerland generally does not have a withholding tax on rent for property. Instead, you are expected to file annually and pay the tax. One exception: if you are a foreign entity owning the property, there might be different rules. But as an individual, you handle it via tax return. If you utterly fail to file/pay, authorities can put a legal charge on the property or involve the tenant to pay rent to them, but if you’re proactive, there’s no automatic withholding.
• Filing Process: You will need to file a limited non-resident tax return (often called “taxation based on economic affiliation”) in the canton where your property is. The form will include sections for property details, rental or imputed income, deductions, etc. Many cantonal tax offices provide forms in English or have someone who can assist. You might hire a local fiduciary (accountant) to handle it for a few hundred francs per year. The filing is usually due by March or so for the previous year (varies by canton). They will then issue a tax bill (sometimes provisional then final). Ensure to pay it to avoid any penalties.
• Example of Tax Outcome: You own a vacation apartment, don’t rent it out. Imputed rent set by canton: CHF 20,000. Mortgage interest paid: CHF 15,000. Maintenance: you opt for a flat 10% deduction = CHF 2,000 (some allow 10-20% of imputed rent as maintenance if you choose). Net taxable = 20k - 15k - 2k = CHF 3,000. Cantonal+communal tax on 3k might be a few hundred francs, plus federal tax maybe ~300 (since federal rate on 3k at low bracket is small). So you’d pay perhaps CHF 600 total. The compliance cost (filing) might be similar order, so many strive to minimize net income via legitimate deductions.
• If you rent out part-time: Many non-resident owners do a mix – personal use some weeks, rent out other weeks. In tax terms, the authorities might treat it as if you are renting it out when you do and using it when you don’t. There isn’t double taxation of both imputed and actual rent; typically, actual rent covers the period it’s rented, and imputed rent only applies to the personal-use period. This can get complex in calculation. Some cantons might just say: if you rented X days for Y income and the rest of the time is personal, ensure you declare actual rent and possibly still have some imputed for the unused period. Realistically, if you do significant renting, you would just declare the rental income and expenses (which probably exceed what an imputed would have been, so it’s fine). If you only rent lightly, they may still impute for the time it was not rented. Check the local practice or use a tax advisor for splitting. The overall tax likely won’t be massive either way if you have a mortgage, because interest will offset a lot.

Wealth Tax on Swiss Assets

Switzerland levies a net wealth tax at cantonal and communal levels (there’s no federal wealth tax). As a non-resident, you are subject to Swiss wealth tax only on assets located in Switzerland, primarily your real estate.

• Calculation of Wealth Tax: The tax is on your net equity in the property (and any other Swiss assets if applicable). Net equity means property value minus mortgage debt (and minus any other debt secured on it). Since Swiss wealth tax is progressive, they often still determine your rate based on worldwide wealth, but only apply it to Swiss assets. However, some cantons for non-residents might simply tax the asset at a standard rate. It varies. The impact for HNWIs: Switzerland’s wealth tax rates range roughly from 0.1% to 1% per year of net assets, depending on canton and total wealth bracket. Most likely you’ll fall somewhere in the middle given a large property.
• If you have a mortgage, that significantly reduces the taxable wealth. For instance, you bought a CHF 5M chalet with a CHF 3M loan, your net wealth in it is CHF 2M. The canton will tax you on 2M. If the rate in that canton for 2M net worth (for a non-resident) is, say, 0.3%, then the annual wealth tax is CHF 6,000. If you had no mortgage (so 5M net), the rate might be higher bracket, say 0.5%, resulting in CHF 25k. This is one reason even wealthy Swiss often carry mortgages – to reduce taxable net worth. As a foreigner, you likewise benefit from debt reducing the wealth tax base.
• Property Valuation for Wealth Tax: The taxable value of the property is often not exactly your purchase price. Cantons have their own valuation formula (sometimes called "tax value" or "estimé fiscal"). It’s often a bit lower than market price, but not always. Some use a percentage of market value (like 80% of market), others update values periodically. If you bought recently, usually they’ll use that as a strong indicator but might cap growth for older owners, etc. So your CHF 5M purchase might be accepted as CHF 5M taxable value, or they might say the taxable value is CHF 4M (if their tables say so). That affects wealth tax.
• No Double Wealth Tax: Most countries do not have a wealth tax, but if your home country does (e.g., some have net worth taxes or similar), there may or may not be a treaty offset. Generally, the concept of double taxation treaties doesn’t formally cover wealth tax as much, but you won’t be taxed in Switzerland on non-Swiss assets, and your home country likely won’t tax your Swiss property if they don’t have wealth tax. If they do, possibly they’d credit Swiss wealth tax in some way (rare scenario).
• Wealth Tax Filing: The wealth tax is assessed as part of that annual property tax return. You list the property and its value, the mortgage, etc. They’ll compute the net taxable wealth and apply their rates. They might ask you for a declaration of worldwide wealth just to determine the rate (progression). This can be sensitive for HNWIs who prefer privacy – but note, providing data for rate determination typically doesn’t mean you get taxed on the foreign part, it’s just to see what bracket your total wealth would put you in. If you prefer not to give details, some cantons then assume a high bracket (worst case) or may negotiate an assumed number. A local tax advisor can navigate this. But it’s usually safe to show them, say, “my worldwide wealth is 50M” – then they know to apply the top wealth tax rate to your Swiss portion. If you don’t, they might assume top rate anyway if the property is multi-million.
• Wealth Tax Example: Canton Valais wealth tax might be roughly 1‰ (0.1%) on the first 1M, then 2‰ on next 4M, etc. If you have 2M net, maybe you pay ~CHF 3k. Canton Geneva might be more like 0.5% on 2M = CHF 10k. These numbers vary. As a non-resident with one property, the absolute amounts are usually not too onerous, but you should include them in cost calculations. They are often billed together with income tax or at similar timing.

Property Transfer and Annual Ownership Taxes

We already discussed the property transfer taxes during purchase in the financing section (as part of transaction costs). Those are one-time. Here we’ll mention if any ongoing property taxes or fees aside from income/wealth tax:

• Annual Property Taxes: Some countries have municipal property taxes (like council tax, etc.). In Switzerland, there is no nationwide annual property tax like in the U.S. However, a few cantons or communes levy a modest annual property ownership tax or land tax. For example, Geneva has a small annual tax on property value (but Geneva also has wealth tax, so it’s a bit double). Vaud has something called impôt foncier which is an annual tax on property for non-residents and companies (around 0.2-0.3% of value). It’s distinct from wealth tax.
• It’s important to check the canton’s system:
  • In Valais, for instance, I don’t recall a separate annual tax beyond wealth tax.
  • In Vaud, if you as a non-resident don’t pay income tax in Vaud, they might levy an annual tax on the property as source tax (but since you will be filing for imputed rent anyway, it might be integrated).
  These local nuances require checking. The amounts are usually not huge: maybe a few per-mille of property value annually.
• The best approach is to ask the notary or a local tax advisor when buying: “What are the annual taxes I’ll owe as a non-resident owner here?” They’ll list wealth tax (if applicable) and any special annual land tax.
• Tourist Taxes (if renting short-term): If you rent to vacationers, note that many communes have a taxe de séjour (tourist tax) that guests must pay (like CHF 2-4 per person per night). As owner, you or your rental agency need to collect this and remit to the commune. It’s not a tax on you directly, but you administer it. If you use a local rental management, they handle it. If personal use only, you might voluntarily pay a yearly lump sum for tourist tax to get certain tourist privileges, but that’s minor.
• Corporate ownership: If you for some reason purchase via a company (Swiss or foreign), the tax situation shifts: the company might owe income tax on any rental (which is basically same as you would personally) and cantonal capital tax instead of wealth tax, etc. That’s beyond scope, but generally, individual ownership is simpler. Many HNWIs just buy in personal name because Swiss taxes on individuals for property are straightforward and often lighter than corporate taxes would be on the asset.

Inheritance/Gift Taxes

While not an annual issue, consider that if you pass away, inheritance tax may apply to the property for the heirs. In Switzerland, inheritance tax is levied by cantons, and most cantons do not tax inheritances to direct descendants (children), but do tax transfers to others (siblings, friends, etc.). As a foreigner, the treaties and rules can be complex. Many treaties say real estate is taxed by the location country even in estate. That means, for example, if you left the Swiss property to your child, and you are not Swiss resident, the canton might try to levy inheritance tax if the child is not exempt (some cantons might exempt children anyway, as I said). Spouses are usually exempt in all cantons from inheritance tax, children in most. But say you left it to a non-family member, inheritance tax could be hefty (could be 25% or more in some cantons). Estate planning is key – maybe keep it in the immediate family to avoid that. Or one could consider holding property via a company to ease inheritance (but then the sale of shares might still trigger Lex Koller issues if heir is foreign – Lex Koller does allow inheritance without permit though, direct inheritance is generally allowed even to foreigners, they won’t force sale; but the heir can’t then buy more).

If you gift the property during your life (to family), some cantons have gift tax akin to inheritance. If exempt for inheritance to kids, likewise exempt for gifts to kids typically.

The main message: consult an estate planner if this is a concern, to ensure your heirs won’t face unexpected taxes or legal hurdles.

Mortgage Interest and Tax Deductions

One silver lining of taxes: Mortgage interest is tax-deductible for property owners in Switzerland. This holds for non-residents filing on their Swiss property income. As mentioned earlier, interest can often wipe out the imputed rental income. Let’s detail this and other deductions:

• Interest Deduction: All interest paid on the mortgage can be deducted against your property income (be it actual rent or imputed rent). There is a federal rule that you cannot deduct more interest than your total taxable income from investments + CHF 50k for married / CHF 25k for single. But if your only Swiss income is the property, that basically limits interest deduction to the imputed rent + 50k. On a big loan, interest might exceed imputed rent significantly (especially at higher rates). For example, imputed 30k, interest paid 60k. Technically, you might only be allowed to deduct up to (30k + 50k =) 80k interest at federal level. 60k is within that, so fine. If interest was 100k, you could deduct 80k, leaving 20k interest nondeductible at federal level. However, at cantonal level, some apply similar limits, some not. Check if this affects you – only relevant if you take a huge loan and interest rates rise a lot. Historically with low rates, most didn’t hit the limit. If you did have an interest deduction limit, well, you’re basically being taxed on an artificially positive income because they didn’t let you deduct all interest. But this scenario likely means you have an extremely leveraged property; as a non-resident usually LTV is low enough.
• Maintenance Deduction: You can deduct costs of maintenance, repairs, and renovations that preserve the value (not luxury enhancements beyond original value). If you put a new roof, fix heating, repaint, those costs can offset income. If you build a new sauna (value-adding improvement), some cantons might not allow it as expense (they’d consider it an investment, though it might then increase your tax basis slightly). However, tracking actual expenses can be tedious. Many owners choose the flat-rate deduction for maintenance: often 10% to 20% of the rental (or imputed) income, depending on property age. For holiday homes, often 10% of imputed rent is allowed annually without proof. If you spend a lot one year (like major works), you can itemize that year to deduct more.
• Property Taxes Deduction: If you do pay any local annual property tax (like Vaud’s impôt foncier), that tax itself is usually deductible against income as well (cantonal taxes often deductible from federal tax etc.). Wealth tax is not deductible from income, but it’s a small amount anyway.
• No Mortgage Tax Credit Abroad: Check your home country’s tax law – generally, if you are paying Swiss tax on the rental income, your home country via treaty should not tax that income again (or give credit for Swiss tax). But what about the mortgage interest? In some countries, you could also claim the interest as a deduction on a foreign property (like the US allows deduction of mortgage interest on a second home abroad up to certain limits, subject to itemizing). However, if you’re already not being taxed on that rental income because of the treaty, you can’t double deduct. In the US case, they actually still tax you on worldwide income including the Swiss property, but then you take a credit for Swiss taxes. You can still deduct the mortgage interest on Schedule A potentially, but then you also have to declare the imputed rent as foreign personal use? It gets complicated. For UK, if you are a UK resident, foreign property rental profit would be taxable but you’d get credit for Swiss tax. Deduct interest in computing that profit as well – yes, you’d be able to deduct mortgage interest as expense in the UK calc too (subject to UK rules possibly limiting interest for residential rental).
• The point: There may be interplay between Swiss and home taxation. You likely need a cross-border tax advisor to optimize it fully. But Swiss tax itself will primarily consider the factors above.

Capital Gains Tax on Sale

When you eventually sell the Swiss property, capital gains tax (CGT) will apply in Switzerland. This tax is levied by the canton/commune where the property is located. Non-residents pay the same rates as residents on property gains. Key points:

• Calculation of Gain: Gain = Selling price minus purchase price, minus capital improvement costs, and minus certain selling expenses. If you spent money on value-adding improvements (e.g., added a room, substantial renovations that increase value beyond mere maintenance), those can be added to your cost basis to reduce the taxable gain. Document these expenses during ownership (keep invoices). Selling costs like agent commissions and notary fees on sale also deduct from the gain.
• Rates: The rates are typically heavily dependent on holding period. Switzerland encourages long-term holding by reducing the tax for longer ownership and penalizing quick flips with high tax. Each canton has its own rate table:
  • For example, in Vaud, if sold within 1 year, tax could be ~30% of the gain. If sold after 10 years, maybe ~15%. After 25 years, it might drop to 0% (some cantons waive CGT after 25-30 years, or just reduce to a very low rate).
  • In Valais, within 2 years might be 50% (!) of gain, then dropping each year you hold. Many cantons have a minimum of ~5-10% even after long time.
  If you sell in a short time, assume a significant chunk of profit goes in tax.
• Non-resident considerations: The tax is withheld or secured at sale time. Usually, the buyer’s notary withholds the estimated CGT from the seller’s proceeds and pays it to the authorities (or holds in escrow until assessed). This ensures non-resident sellers don’t run off without paying. If you had no gain or a loss, they may still withhold until tax office confirms no tax and then release it. Just know you might not get 100% of sale price on closing; some will be held for CGT clearance. Eventually, the canton issues a final assessment and any excess withheld is returned to you or shortfall asked to pay.
• Exemptions: Swiss residents get to defer or avoid tax if they sell a primary residence and reinvest in another within Switzerland (rollover relief). As a non-resident, that likely doesn’t apply because your property isn’t primary (and you aren’t buying another Swiss one usually). So assume you’ll pay CGT on any gain.
• Home country tax: Many countries will give credit for Swiss CGT because the right to tax immovable property gains is usually with the source country (Switzerland) under treaties. The US, for instance, would let you credit Swiss CGT against US tax on the sale (yes, the US taxes worldwide including the sale, but treaty allows credit so you likely end up paying whichever is higher tax – Swiss CGT or US capital gains; often Swiss CGT can be higher if short hold). Other countries like UK do tax foreign property gains for residents too (with credit). Some countries might exempt it if considered foreign business income – but likely it’s taxed at least somewhere. Swiss CGT can be quite substantial for short holds, so factor that into your investment horizon. If you plan to keep the property long-term, the CGT becomes much less of a worry.

Example: Putting It All Together

To illustrate the tax picture, let’s do a hypothetical case:

You purchase a holiday home for CHF 3,000,000 in canton Valais, with a mortgage of CHF 1,800,000 (60%). You are resident in the UK, for example.

During Ownership (yearly):

• Imputed rent set at CHF 60,000/yr (for a luxury chalet).
• Mortgage interest ~1.5% of 1.8M = CHF 27,000.
• You do some maintenance averaging CHF 6,000 (or take flat 10% = 6,000).
• Net taxable income = 60k - 27k - 6k = CHF 27k.
• Cantonal/communal tax on 27k: suppose ~10% = 2.7k, Federal ~0.8k, total ~3.5k CHF tax/yr.
• Wealth tax: Property taxable value maybe 2.7M (90% of price), minus 1.8M debt = 0.9M net. Cantonal wealth tax at ~0.5% = CHF 4.5k/yr.
• Total Swiss taxes yearly ~CHF 8k.
• You also declare in UK: The imputed rent concept doesn’t exist in UK, you’d likely not be taxed on personal use, and because it’s not rented, there’s no UK taxable income (so double tax treaty is fine, no UK tax, just Swiss). UK doesn’t have wealth tax, so nothing there. So 8k/year is the cost (plus property upkeep etc.).

Upon Sale: Suppose 10 years later you sell for CHF 4,000,000. Gain = 1,000,000 (assuming you put maybe 100k into improvements which you claim, but let’s ignore improvements to be simple). Holding 10 years: Valais’s CGT perhaps ~15% of gain. So ~CHF 150,000 tax. The notary withholds that at sale. You get the rest of proceeds.

• You pay off the mortgage out of proceeds (remaining maybe still 1.8M if interest-only).
• So cash to you before tax: 4M - 1.8M = 2.2M. Then CGT 0.15M withheld, net ~2.05M you receive. (Remember you initially put 1.2M down, so you more or less doubled your equity – not bad – but had costs along the way).
• UK would tax the gain too, but you get credit for the 150k Swiss tax. If the UK tax on that gain (converted to GBP) would be lower or higher, you’d pay the difference if higher. UK CGT for a higher-rate individual on foreign property is 28%. 28% of 1M = 280k CHF (approx). Swiss was 150k, so UK could charge another 130k after credit. Ouch, that effectively makes total 28%. But if it were a country that doesn’t tax foreign real estate gains, you’d just pay Swiss.

Planning note: If you moved into the property as your primary residence for a while, you could reduce some taxes potentially (but as non-resident you can’t unless you change residency). Also, leaving the property to heirs could avoid CGT (they get step-up in some jurisdictions, but Swiss would still want inheritance tax if applicable).

As you can see, taxes are not negligible, but they are manageable and logical. The mortgage helps optimize some taxes (interest deduction, lower wealth tax). It’s wise to involve a tax advisor when you buy to plan things correctly, especially cross-border.

Legal Considerations and Property Purchase Process

Purchasing property in Switzerland involves navigating legal procedures and regulations beyond just the financing. In this section, we focus on the legal steps and considerations specific to non-resident buyers: obtaining the necessary purchase permit (Lex Koller authorization), understanding the contract and notary process, dealing with any special restrictions (like resale restrictions or usage conditions), and ensuring compliance with all Swiss legal requirements. We also touch on any nuances that HNWIs should be aware of, such as using legal structures or dealing with local compliance.

While we’ve covered Lex Koller generally under eligibility, here we’ll put it in the context of the transaction process and other laws that come into play during purchase and ownership.

• Obtaining the Purchase Authorization (Lex Koller Permit)
• The Notary’s Role and the Closing Process
• Additional Legal Points for HNWI Buyers

Obtaining the Purchase Authorization (Lex Koller Permit)

As noted earlier, if you’re a non-resident buying a holiday home, you must obtain an authorization under Lex Koller. This is a critical legal step in the purchase process, and it typically happens as follows:

• Selecting an Eligible Property: First, ensure the property you want is eligible for foreign purchase (holiday home in a designated area, within size limits, etc.). Usually the selling agent will know and advertise if foreigners can buy it. If it’s advertised internationally, likely yes. If unsure, you or your lawyer/notary can inquire with the cantonal authority before committing.
• Signing a Reservation or Pre-Contract: In many cases, you’ll sign a reservation agreement or preliminary contract with the seller once you agree on price. This might be called a promesse de vente or Vorverkaufsvertrag depending on region, essentially a binding (in many cantons) or semi-binding (with conditions) contract to sell, subject to obtaining the permit and financing. You often pay a deposit (for example 10%) into escrow or to the notary’s client account at this stage. The contract should explicitly state that it’s conditional on you (the buyer) getting the Lex Koller authorization. If the permit is denied, the contract should be cancelable and deposit refunded. Make sure this contingency is in writing, to protect you.
• Application for Authorization: Once the pre-contract is signed, the notary (or sometimes the real estate attorney or a specialized consultant) will prepare the application for the purchase permit. You as buyer will likely need to fill out a form and provide a copy of your ID, and details like: citizenship, country of residence, confirmation you don’t already own other Swiss property, and specifics of the property (address, size, etc.). The application goes to the cantonal Lex Koller office or land registry authority. They will check:
  • That the property meets criteria (e.g., holiday home quota not exceeded, size under limit, area designated for foreigners).
  • That you personally qualify (non-resident, no other properties beyond allowance).
  They might ask your intended use (holiday home vs rental, though renting when not using is usually fine).
• Permit Approval: Depending on the canton, approval can take from a couple of weeks to a few months. Some cantons move fast if quotas are available; others queue applications especially if near yearly limits. Typically, as an HNWI buying a high-value home, you’re the kind of investor they often welcome (boosts local economy, etc.), so unless quotas are exhausted, you should be fine. Once approved, you get an official authorization document. It will state any conditions (sometimes it might say you can only use as secondary residence, must not rent more than X weeks – but usually not, rental is allowed; or it might just reference the legal limits in general).
• Permit Rejection: If in the rare case it’s rejected (for example, quota filled for the year), you might have to wait or the deal might fall through. There’s possibly an appeal process, but that’s cumbersome. Most buyers ensure in advance with the notary that quota is available and criteria are met, so rejections are unusual if all due diligence was done. If it does happen, per contract you back out without penalty ideally.
• One Property Per Family Rule: If you (or your spouse) already own a holiday home in Switzerland, you generally won’t get a permit for another. There could be an exception if you plan to sell the first or special circumstances. HNWIs sometimes try creative solutions (like putting another property in a different name or a company), but authorities usually look at beneficial ownership. It’s risky to attempt skirting; better to comply. If you really want multiple Swiss properties, consider becoming a resident or exploring commercial property route for additional investments.
• Lex Koller After Purchase: Once you have the property, continuing compliance is key. If the property was bought as a holiday home:
  • You cannot turn around and rent it long-term to Swiss residents; it's meant as secondary residence (short-term holiday lets allowed).
  • You cannot use it as your primary residence unless you later obtain a residence permit.
  • If you decide to sell, the buyer will also need authorization (unless they are Swiss or a resident). However, selling to another foreigner is generally fine – they’ll just need to apply like you did. There’s no additional allowance granted just because one foreigner owned it before (though some cantons keep track that it remains within the quota count).
  • If you pass away and will it to an heir, Lex Koller says inheritance is not considered a new acquisition (so your heirs can inherit even if foreign, without needing a permit). But if those heirs wanted to keep it, they cannot buy another as well, etc.

The Notary’s Role and the Closing Process

In Switzerland, the notary is a central figure in property transactions. Unlike some countries where each party has a lawyer, in Swiss tradition the notary is typically a neutral official (often a public officer or licensed professional) who prepares and authenticates the deed of sale and ensures it’s registered.

• Notary Selection: In some cantons (like Geneva, Vaud, Neuchâtel), notaries are independent professionals chosen by the parties. Often the buyer or seller has a regular notary they prefer. In others (like Zurich), the notary might be a public office or assigned. Usually, the buyer’s side arranges the notary since they pay the fees, but it can vary. Ensure the notary you use is experienced with Lex Koller purchases (most in tourist areas are).
• Drafting the Deed: The notary will draft the deed of sale (acte de vente / Kaufvertrag) which is the formal contract transferring the property. It will include:
  • Names of seller and buyer (with identification).
  • Description of property (from land registry: plot number, address, size, rights like any easements or servitudes).
  • Purchase price and payment terms.
  • Any specific conditions or agreements (like you're buying fully furnished? That might be separate; or any repairs seller must do; or if there’s a lease or management contract being transferred).
  • Mention of the Lex Koller authorization (the deed will note that authorization was granted on date X, and may incorporate it by reference).
  The transfer of ownership is conditional upon entry in the land register.
• Payment and Escrow: Typically, by the time of closing, you will have arranged your mortgage and your funds. The usual approach:
  • You will transfer your equity (down payment plus all fees/taxes) into the notary’s escrow account shortly before closing.
  • The bank will also be ready to transfer the loan amount, either to the notary or directly to the seller’s account on closing day upon instruction from notary.
  The notary acts as escrow agent: they won’t release money to the seller until the property is secured for transfer.
• Closing Meeting: On the agreed date, you (or your representative with power of attorney, if you can’t attend in person) and the seller meet at the notary’s office to sign the deed. In some cantons it must be physically signed in front of the notary who will authenticate it. If you can’t be there, you can often have given a power of attorney to someone (maybe your lawyer, or even in some cases the notary can act for you if arranged).
• The deed might be in the local language (French, German, or Italian) with possibly an English translation provided informally if needed. If you don’t understand the local language, you have the right to an interpreter or a translation to ensure you know what you’re signing. Many notaries in resort areas speak English and will explain it point by point.
• Once signed, the notary notarizes it and it becomes legally binding.
• Land Register: After signing, the notary will submit the deed to the Land Register (Registre Foncier / Grundbuchamt). The land registry is an official record of property ownership and any liens or mortgages. The change of ownership is only fully effective when the land register is updated. This may take days or weeks after signing (depending on backlog). However, the notary usually coordinates so that upon signing:
  • The buyer is given the keys and control of the property (unless otherwise agreed).
  • The payment is released to the seller (or at least a portion; sometimes a small part might be held until registration is confirmed).
  • The mortgage (if any) is registered simultaneously or shortly after.
  In practice, there's an interim step: the notary may register a priority notice (schranke or annotation) right after signing to block any other changes until full registration, protecting your interest.
• Mortgage Registration: The bank’s mortgage will be registered on the title, usually as a mortgage note (Schuldbrief / cédule). In some cantons, they create a bearer or nominative mortgage note representing the debt. The bank will hold that note as security. If the property had an existing mortgage note from the seller, often they’ll simply assign it to your bank (this is an internal thing, but it can save costs by not creating a new note). The notary handles all this. The end result: the title will show a mortgage note of X amount pledged to your bank.
• Title Insurance: Unlike some countries, title insurance is generally not used in Switzerland. The land registry is considered definitive and state-guaranteed. As long as the notary did due diligence (which they must) to ensure the seller actually owns and can sell, and that there are no unexpected liens (the notary will get an excerpt from the registry showing current status), you don’t need title insurance. The land register is highly reliable.
• Possession Date: Usually the date of signing is when “possession” transfers (meaning you get keys, responsibility, etc.). Sometimes buyers and sellers agree a different date (like end of month, or after some time). If so, the contract should specify who bears costs and gets any rental income up to that date. For instance, if the seller already rented out the chalet for Christmas week and you close on Dec 1, you might agree the seller keeps that rental income but covers expenses during that period. Or you negotiate adjustments in price. But in most cases with a holiday home, it’s delivered vacant at transfer.
• Costs Settlement: The notary also usually makes a statement of account:
  • They collect purchase price, their fees, transfer tax, etc.
  • They pay the seller the net amount.
  • They pay the canton the transfer tax.
  • They might pay off seller’s existing mortgage if one was on the property (so that the title is clear except your new mortgage).
  • They take their fee and land registry fees.
  You usually get an itemized bill. If you deposited more than needed, they refund the excess. If there’s a small shortfall due to rounding or final adjustments, you’ll be asked to top up.
• Ownership and Register Extract: After a few weeks, you (or your attorney) can obtain the updated Extrait du registre foncier (land register excerpt) showing you as the owner and the bank’s lien. Keep this, it’s proof of ownership. It might also list any servitudes (e.g. right of way, or if part of a condo association, the shared ownership parts).

Congratulations, you legally own a piece of Switzerland! The notary process might have seemed formal, but it ensures clear transfer.

Additional Legal Points for HNWI Buyers

• Furnished Sales: If you buy the property furnished (common for a fully equipped chalet or a new build with furniture package), note that typically the inventory (movable items) can be treated separately in the contract. Why? Because Lex Koller limits apply to real estate, not furniture. And also, property transfer tax in some cantons is only on real estate value. So sometimes parties allocate, say, CHF 100k of the price to “furniture and equipment.” This can slightly reduce transfer tax and doesn’t count in the property value for Lex Koller size (though that’s about area, not price). However, authorities are aware of this practice and it should be reasonable (you can’t allocate an obviously large chunk to movables or they’ll reject it). Also, you can only do this if indeed sold furnished. It’s a minor strategy just to know.
• Rental Restrictions: Check if any local rules apply to renting out. Some tourist cantons encourage that owners make the property available for rent when not used (to benefit tourism), but I’m not aware of strict requirements except under certain programs. For instance, if it’s part of a leaseback scheme or if it’s in a resort development that expects you to rent it a certain number of weeks. Read any clauses about usage. Lex Koller doesn’t forbid renting; it’s allowed. Lex Weber (second home law) might indirectly push communes to want houses occupied not empty, but no one will force you to rent if you don’t want – you can leave it vacant when not there, it’s your right.
• Resale Restrictions: Some cantons, when granting a foreigner permit, put a condition that you cannot sell the property for a certain period (like 5 years) except with special approval. This is to prevent quick flips by foreigners. For example, Valais used to have a 5-year rule for foreign-owned holiday homes – you had to hold at least 5 years or if you sell earlier, you needed a reason or maybe they wouldn't give another foreign permit easily for the new buyer. This may vary or have been relaxed, but ask the notary about any minimum holding period. Even if not formal, practically if you tried to flip in 1 year, the new foreign buyer’s permit might be looked at carefully. Plus, the heavy CGT for short term holds we discussed is a natural disincentive.
• Building and Renovation: If you plan to renovate or expand the property after purchase, remember:
  • Any expansion that increases living area might run against the 200 m² limit if you try to extend beyond that (if you bought at 180 m², you probably can’t add an addition that takes it to 250 m² because your permit was for a small one; you’d likely need to request permission which likely denied if over limit).
  • However, renovations that don’t enlarge or ones that improve quality are fine. You’ll need building permits from local commune for significant work, just as any owner would.
  • If you bought land to build a new holiday home (some cantons allow foreigners to buy a plot and build within the 200m²/1000m² limit), you typically must start construction within a certain time or the permit could lapse. And Lex Weber might limit new builds.
• Owning via a Company or Trust: Some HNWIs consider using a corporate structure (perhaps for privacy or inheritance reasons). Be aware:
  • If you use a foreign company to buy, Swiss authorities will see through it; the company is “a foreign person” and needs a permit just like you would as individual. And you as beneficial owner still count that as your one property.
  • If you use a Swiss company that you fully own, they will likely treat it similarly (though if it’s truly an operating company and property is for its office use, that’s different scenario).
  • For inheritance, Swiss law allows a foreigner’s heirs to inherit the property. Alternatively, you could put it in a family trust. But if the trust is foreign, when the trust eventually transfers to a new beneficiary, that could be considered a new acquisition requiring a permit (depending on how it’s structured). This is complicated – definitely consult a law firm if you want to put the property into some structure. In most cases, it’s simpler to hold in your name and plan inheritance via will (maybe a Swiss will for the Swiss property to avoid conflicts).
• Privacy: Swiss land records are not secret. They are semi-public (in some cantons you can request an extract for any property if you have a legitimate interest; sometimes the names of owners are known). If privacy is a concern, a company name might hide your name from casual view, but authorities will know. In resort towns, often it’s known which chalet is owned by which celebrity etc., so if that’s a worry, you can attempt structures, but weigh against complexity.
• Local Obligations: Owning property means you’re part of the local community in some ways:
  • You’ll pay annual communal charges for things like garbage, water, etc. These are usually minor. Some places have a bill for communal services (e.g., fixed fee for garbage pick-up, or you buy official trash bags which include the fee, etc.).
  • If it’s a condo, you’ll have the owners’ association (PPE in French) to deal with. They have annual meetings, fees for building maintenance (syndic). Make sure to read the regulations of the building. Non-resident owners can give proxy for meetings if can’t attend. Fees cover things like common area cleaning, repairs, heating if central, etc. These can be significant in luxury developments with amenities.
  • If it’s a chalet or house, no condo fees but you might share a private road snowplowing cost with neighbors or something. Check if there's a community association or right-of-way agreement that mandates sharing maintenance of access road, etc.
• Insurance: As mentioned, property insurance is required. Also if you rent out, consider liability insurance (if a renter gets hurt, etc.). A personal umbrella liability policy that covers international might be wise for HNWIs.
• Taxes: We covered taxes – just reiterating: file them on time. If you forget or ignore Swiss tax filing, at first they might send reminders to the property address or your recorded correspondence address. If no compliance, they could eventually enforce by taking from rental or putting a legal charge. It’s easier to just handle it.
• Dispute Resolution: If any disputes arise (like seller misrepresented something, or neighbor boundary issues):
  • Swiss law would apply for the purchase contract (which likely contains seller reps about no hidden defects beyond what’s declared). You typically buy as-is, so only if there was deliberate hiding of defects can you claim after.
  • For neighbor issues, Swiss civil code and local regulations cover it. It’s a stable legal system; if you needed to litigate, you’d hire a Swiss attorney. But such cases are rare in straightforward transactions.
• Exit Strategy: Legally, when you want to sell, as a foreign owner you can sell anytime (subject to that possible holding period rule or heavy CGT if short term). You can sell to a Swiss or a foreigner. If you sell to a Swiss resident, their purchase isn’t limited by Lex Koller (because it’s local to them), so actually that frees up your “foreigner permit” slot in that commune. If you sell to another non-resident, they will apply for a permit as you did (the number is basically reused for them, not an additional – overall foreign-owned count remains same).
• From your perspective, selling is similar to buying but in reverse: find a buyer, go to notary for a sale deed, etc. The buyer typically chooses notary (but often same notary can do it representing both, since neutral).
• Ensure any capital gain tax and possibly agent commission (if you used an agent to find buyer) are accounted for.

Key Legal Takeaway: Engage a knowledgeable notary or attorney early, ensure Lex Koller compliance, and follow the Swiss formalities closely. Switzerland’s purchase process is actually very safe and transparent – many HNWIs find it a relief compared to more chaotic systems elsewhere. Respect the usage rules of your permit, pay your dues (taxes, fees), and you’ll enjoy trouble-free ownership.

Now that we’ve covered legal and procedural aspects, let’s summarize the step-by-step process from start to finish, to tie together the financing, legal, and practical steps in a chronological guide.

Step-by-Step Mortgage Process for Non-Residents

Finally, let’s map out the entire process of buying a Swiss property with a mortgage as a non-resident HNWI, in a logical sequence. This serves as a checklist and timeline from the planning phase to receiving the keys. Each step is detailed to ensure you know what needs to happen and when. Keep in mind some steps occur in parallel.

1. Define Your Budget and Goals

   Begin by clarifying your budget for the purchase and your financing capability. Consider how much cash you can allocate for down payment (remember ~40% likely needed) and transaction costs (~5%). Also evaluate what price range fits your comfort given your overall wealth and the potential tax implications. Determine the purpose of the property (vacation home, part-time rental, etc.) and preferred regions (which must allow foreign buyers). This stage is about aligning your property dreams with financial reality. Outcome: A target price range (e.g., “I’m looking for something around CHF 2-3 million, and I can put up CHF 1.2M cash and need a ~CHF 1.5M mortgage”). Also, decide if you’re willing to establish a banking relationship in Switzerland if needed for the mortgage (likely yes for smoothest process).

2. Get Informal Pre-Approval or Mortgage Advice

   Before shopping seriously, it’s wise to get an idea of your mortgage prospects:

   • Consult Lenders/Brokers: Reach out to a Swiss private bank or a specialized mortgage broker to discuss your scenario. Provide a snapshot of your finances (income, assets, desired loan). They can often give an indicative lending capacity. For instance, a broker might say “Based on what you described, you could likely get up to CHF X loan. With CHF Y down, that corresponds to a purchase of ~CHF Z.” They might also flag any issues (e.g., “Bank ABC won’t lend if you’re US citizen, but Bank XYZ will if you deposit assets”). This is not a formal approval, but it guides your search.
   • Affordability Check: You can also self-check affordability: take your annual income, divide by 3; then divide that by 0.05 to get a rough max loan. E.g., income CHF 300k -> one-third = 100k allowable cost -> /0.05 = CHF 2M loan maximum (assuming no other debts). With a 60% LTV, that implies ~CHF 3.3M purchase max. If that aligns with what you want, great. If not, adjust expectations or plan to increase equity.
   • Document Prep: Start compiling the documentation listed earlier (financial statements, etc.), because when you go for actual approval, you’ll need them. Doing this early avoids delays later.

   Outcome: You have a sense of how much you can borrow and under what conditions, giving you confidence to hunt for properties in a certain price bracket. Perhaps you also identify a bank (or two) that are good candidates for the loan once you find a property.

3. Find an Eligible Property

   Engage real estate agencies in your desired Swiss locations or search listings (sites like homegate, ImmoScout24, etc., as well as specialized luxury realtors). Key actions:

   • Confirm Foreign Eligibility: For each interesting listing, verify if foreigners can buy it. Listings may state “available to foreign buyers” or the agent will confirm. Eliminate those that are not possible (e.g., a random apartment in downtown Zurich – you can’t unless you move so focus on holiday zones like resort towns or specific cities like Montreux where second homes are allowed for foreigners).
   • Viewings: Arrange viewings (could be virtual if you can’t travel, but for a multi-million property, you’ll likely want to visit Switzerland at least once). The viewing trip can also be when you meet a bank or notary if you have time.
   • Selection: Choose a property that fits your needs and budget. Do your due diligence – get information on property condition, any renovations needed, review any available survey or documents. If it’s an apartment, ask for the co-owner association’s accounts and rules. If a house, maybe have an inspector check key structural elements (though formal inspections are less common in Switzerland, but you can hire an expert to be safe on an older chalet).
   • Negotiate Price: Typically Swiss properties have some negotiation room but not dramatic. As a foreigner HNWI, agents might assume you’ll pay ask, but it’s perfectly normal to offer less, especially if the property’s been on market a while. Negotiations might take a few back-and-forths. Once agreed, you often sign a reservation agreement and pay a small deposit (e.g., CHF 50k-100k) to signal commitment, with balance of 10% at the formal pre-contract.

   Outcome: You have a chosen property, at an agreed price, and ideally a basic agreement or reservation contract in place stating you intend to buy, subject to necessary permits and financing. A 5-10% deposit might be lodged in escrow as commitment.

   Back to top of section | Back to top of page

   ---

   Step 4: Secure a Formal Mortgage Offer

   With the property details in hand, you now get a concrete mortgage offer:

   Submit Application: Provide the chosen bank with all required documents: personal financials and details of the property (the agent or seller usually provides an extract from land registry, property description, etc., which the bank needs for valuation). Also submit the signed reservation or pre-contract if available (shows the price and that you’re serious).

   Bank’s Due Diligence: The bank will evaluate your creditworthiness (which they may have pre-checked) and the property’s value. They might send someone to appraise or just use internal comparables. Since you have the Lex Koller angle, they will also likely want proof that the property is permissible for you to buy (this can be shown via a statement that it’s a designated holiday home and perhaps the Lex Koller application receipt later). The loan offer might be conditional on obtaining the Lex Koller permit (and sometimes on the property actually being registered in your name).

   Mortgage Offer: If approved, the bank issues a mortgage offer or commitment letter detailing the amount, interest rate (could be fixed now or you might choose later if floating), term, and any special conditions (like “subject to Lex Koller authorization, subject to no material adverse change in your financial condition, subject to you bringing X assets to the bank if that was a condition, etc.). If you applied to multiple banks, compare offers. You might negotiate a bit at this stage (e.g., Bank A gave 1.6%, Bank B 1.4% – you can ask Bank A to match 1.4% or you’ll go with B). Given tight timing often, you might have already honed in on one bank by now.

   Choose and Commit: Sign the mortgage offer from your chosen bank. This usually binds the bank to provide the financing under stated conditions and you to take the loan (especially if rate locked). Sometimes there’s a small fee if you cancel after signing an offer, because they hedge rates for you.

   Note: The formal signing of mortgage contracts often happens closer to closing, sometimes at the notary or just before. At this stage, it’s an agreement in principle.

   Outcome: You have a confirmed loan lined up covering typically 50-60% of purchase price. You are now ready to finalize the purchase knowing funds will be there. The bank might also issue a “Letter of Comfort” to the notary stating they will fund X amount for your purchase, which helps during final contract signing.

   Back to top of section | Back to top of page

   ---

   Step 5: Apply for Lex Koller Authorization (In parallel with step 4)

   Prepare Application: Work with the notary or your lawyer to fill out the application for foreign ownership permit. Provide necessary personal info (passport copies, etc.). If any explanation needed (e.g., you already co-own another Swiss property with your spouse and now want a second because one will be sold – provide that context, or if the property is unusually large but part of it is non-habitable, etc., clarify).

   Submit to Canton: The notary submits the dossier to the cantonal authority responsible for Lex Koller. This might be called the land registry commission or similar.

   Wait for Approval: Follow up periodically through your notary. Sometimes additional questions come back: e.g., confirming you don’t intend to live year-round, or asking for your confirmation you’ll not rent long-term, etc. Provide any answers needed. Typically for a straightforward holiday home, it’s routine.

   Permit Granted: You receive the authorization document. This is a green light for the purchase to proceed to closing. (If not granted by the time of closing scheduled, you may need to delay closing date – however, often the contract and mortgage and everything are timed expecting the permit. Many notaries schedule closing only after getting it.)

   Outcome: The legal authorization to buy is in hand (or assured to be forthcoming by the time you close).

   Back to top of section | Back to top of page

   ---

   Step 6: Finalize the Purchase Contract (Deed) with Notary

   Once financing and permit are secured, schedule the closing with the notary. The notary will draft the final deed of sale. Review the draft (have it translated if necessary) and ensure it reflects the deal: correct names, price, what’s included (any furniture list?), conditions (like “sold as is” and mention of permit, etc.).

   Arrange the logistics: If you will attend in person, confirm date/time. If not, arrange a power of attorney. Perhaps you plan to fly in for a day to sign, which many do for such significant purchase.

   Ensure your funds (down payment + fees) are ready to transfer to the notary’s escrow. The notary will give you an exact figure to send and by what date. This must arrive before or by closing. International transfers can take a few days, so initiate in advance. It’s often easiest to send from your Swiss account (which you likely opened when getting the mortgage – the bank would require you have an account to service the loan). So you might first wire money from abroad into your new Swiss account, then from there to the notary. That also helps with AML tracking (the bank already cleared the source).

   The bank will also coordinate with the notary for their portion. You might need to sign the mortgage contract (if not yet done) around this time. Some banks have you sign it at their office or they courier it to you. It’s usually a fairly standard form plus the specific terms you agreed. Make sure you understand the key terms like interest, term, amortization schedule, etc. Sign and return it timely.

   Closing/Signing Meeting: Attend the notary appointment (or your representative does). Sign the deed. The notary checks everything, confirms receipt of funds or that funds are in transit as agreed, and notarizes the document.

   Mortgage Security: At the same meeting or soon after, you’ll sign the mortgage note in favor of the bank (or an assignment of existing note). Often the notary prepares that too, and you sign it, then the notary gives it to the bank representative or sends it. This document basically says you acknowledge a debt of X secured on the property – it’s separate from the loan agreement.

   The notary typically will have the Lex Koller permit document on hand and will note it in the deed. You might sign an acknowledgement that you are aware of the usage limitations.

   Outcome: The sale is legally executed. You are now the owner in contract, with the property to be registered in your name.

   Back to top of section | Back to top of page

   ---

   Step 7: Funds Disbursement and Handover

   Immediately after signing, the notary disburses funds: pays the seller the purchase price (usually by wire to their account) minus any holdbacks (like CGT withholding if the seller is a non-resident – not your burden but process-wise the notary handles it).

   You receive the keys and any documents (instruction manuals, etc.) from the seller. Often a separate key handover and inventory check is done. If you couldn’t attend, you’d arrange how to get keys (maybe through an agent or courier).

   Now the property is yours to use! You might want to change locks or codes for security if not new.

   The bank’s mortgage is now active; they will likely have immediately charged the interest from closing date to month-end or quarter-end from your account. Ensure your bank account has funds for the first interest payment.

   Arrange property insurance effective from closing (your notary may have insisted on seeing a binder or confirmation of insurance).

   If applicable, inform the property management or building concierge of the change of ownership so they have your contacts and start sending any building fee invoices to you.

   Outcome: You have possession of the property, and the seller has been paid.

   Back to top of section | Back to top of page

   ---

   Step 8: Post-Purchase Registrations and Notifications

   Land Registry: The notary registers the deed with the Land Registry. This might happen within days or weeks. You or your lawyer will eventually get the updated registry extract. No action needed on your part except to keep an eye out for confirmation.

   Tax Registration: As a new owner, the local tax authority will be notified by the land registry. Some weeks or months later, you’ll receive a welcome letter or tax form to fill regarding the property. If not, proactively contact the cantonal tax office to register yourself as the owner for tax purposes. It’s important they have your correct mailing address (you might want to give your home country address and/or the address of a Swiss accountant if you hire one).

   Communal Registration: Some communes ask even non-resident owners to register at the commune (not like residents, but just so they know who owns the holiday homes). You might drop by the commune office or send them a note with your contact details. This can also ensure you get any local notices (like voting materials for second-home owners, or simply the garbage disposal calendar, etc.). They may levy an annual communal tax or fees we mentioned, so you want the bills to reach you.

   Utility Transfers: If not already handled, set up accounts with utility providers (electricity, water, gas, internet). Often the seller will have informed them, or the notary does, but follow up. You may need to sign new contracts. Sometimes property managers do this. Make sure bills will come to you or your property manager.

   Mortgage Payments: Set a schedule to transfer funds for mortgage payments. Perhaps arrange a standing order if your income is abroad. Mark the dates when interest is due.

   If Renting Out: Start engaging rental agencies or platforms to list your property if you plan to rent it. Ensure you comply with local registration (some communes require you to register as a landlord for tourist tax collection).

   Outcome: All administrative loose ends are tied. You’re fully set up as the owner, payer of bills, and your mortgage is being serviced.

   Back to top of section | Back to top of page

   ---

   Step 9: Enjoy and Manage Your Property

   Now you can enjoy your Swiss home for vacations, let friends/family use it (permitted), rent to guests (making sure to declare that income).

   Consider hiring a local caretaker if you won’t be around – important for checking the property, keeping it aired out, handling snow removal in winter, etc. Many HNWIs hire a property management service.

   Stay on top of maintenance to preserve the property’s value.

   Each year, pay your property tax bill and file the tax return as required (with help of a tax advisor if needed).

   If anything changes (e.g., you become a Swiss resident later, or you want to refinance the mortgage after some years to get a better rate or to borrow more), engage the bank or advisors accordingly.

   Keep an eye on Swiss laws (though changes are rare; if anything, they sometimes tighten Lex Koller if political mood shifts, but existing owners are usually grandfathered in).

   Long term, plan for sale or inheritance as fits your situation, engaging estate planners if necessary to optimize.

   Outcome: The property becomes a treasured asset and potentially part of your long-term wealth portfolio or family legacy.

   Back to top of section | Back to top of page

   ---

   Step 10: (Optional) Sale or Exit

   (Not needed now, but for completeness): When you decide to sell – perhaps years or decades later – remember to:

   Check the Lex Koller situation (by then maybe you could sell to a Swiss or another foreigner, bearing in mind any hold period rules).

   Get a local real estate agent to market to the right audience (they might specifically target international buyers if it remains under Lex Koller).

   Pay off the mortgage from sale proceeds and close any associated accounts.

   Settle capital gains tax with the canton as discussed.

   If moving out furniture, etc., plan that as well.

   A notary will again handle the sale process similarly as your purchase, ensuring all legal steps (and releasing you from any liability like mortgage note).

   Outcome: a smooth exit with all dues paid, hopefully a nice return on investment realized, and memories made.

   Following these steps diligently will help ensure that your journey to owning a Swiss property with a mortgage is successful and relatively stress-free. Each step involves professionals (brokers, notaries, bankers, agents) who can guide you, but ultimately being informed (through guides like this) puts you in control and prevents surprises.

   Back to top of section | Back to top of page

   ---