Tag Archives: renting

Switzerland

House Buying Restrictions for Foreigners

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Since starting and committing to the buying process in Switzerland, I’ve noticed some of the restrictions that foreigners must cope with here. Buying a home as an expat is not quite as easy as coming up with the deposit.

Don’t think you can just come to Switzerland and buy a home. Most owners need a residence permit or citizenship to buy a home here, otherwise applicants are limited to select holiday areas for purchasing homes with a limit on the number allowed.

Rules like this help protect the land and property values from skyrocketing for local residents. Luckily the residence permit was not an issue for us since we are local.

I’m still not sure if this is just for non-domiciled foreigners, but I have heard it applies to foreign residents as well. Depending of the canton your home can be between 200 m2 and 250 m2. (2152-2690 sq ft).

This was not really an issue for us because our home is only 105 m2, but it surprised me because I’ve definitely looked at larger fixer-upper homes on the market.

Generally you are only allowed to buy one house, especially if you are buying a holiday home. The only case where you can buy two houses if if you are transitioning to a new home. In these cases, the first home must be sold before you enter the second home in the land registry. Eeek. Talk about stressful! Thankfully selling is not usually a problem in this market.

I believe that we are allowed to buy a second home if we would live in it, but that we cannot buy a second home for rental purposes. (Might be wrong about that!) You are allowed to buy if you need to change residences due to your job, but you are not allowed to change residences for the purpose of acquiring more properties. If one is buying a holiday home, a second home is simply not allowed.

When we received our sales contract for our flat we had it reviewed by professionals who noted the oddity of the “no rental” line at the end of the document. We inquired and learned that this is actually a federal regulation.

As long as I am not Swiss and I own part of the house, we are not allowed to rent the house out in part while I am living in it. So, if Kay would want to go to school abroad for example, I would not be allowed to rent out a room to someone to help pay the mortgage. But if I would leave Switzerland, we could rent it out… and if I become Swiss it will be a non-issue. Complicated!

Ok, this one isn’t limited to foreigners as it also applies to Swiss, but I thought it was worth mentioning because it throws off a lot of expats here.

In the first years that you own your home, there is a 100% capital gains tax which effectively stops people from flipping houses and effectively helping the market skyrocket. Swiss law has to be very strict about the rules of buying and selling so that people do not abuse the small realty market. The longer you live in your house (closer to 20 years) the less capital gains taxes you will have to pay on your profits.

In general, it is not a good idea to buy a house here hoping for a big investment payoff. It won’t happen. If you buy, you will “earn money” by saving on rent and taxes, but if you hold on to your property for 20 years through market fluctuations, you will generally see a smaller return on your investments than if you invested in other ways.

This means it is still worth it to buy homes for personal savings or for rental money here, but the idea of buying a house and selling it a few years later for some cash just doesn’t work. The only way “flipping” a house can work here is if you live in the house yourself and fix it up. When you sell the house to buy a new one, then there are special rules allowing you to keep your capital gains so that you can apply the principal to a new home for yourself.

Factual information in this post has been provided through the Federal Department of Justice and Police, Swissinfo and Buy a Holiday House in Switzerland.

If I’ve gotten something wrong, feel free to correct me in the comments. Everyone has a different answer for these types of questions in Switzerland and it’s sometimes hard to tell what is the truth.

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How to Pass on Your Rental Lease

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Normally in Switzerland you can only move out in April or September, so despite giving our rental agency 7 months notice before moving out… we were responsible for finding new tenants.

The agency told us that they would list our flat on one of the popular listing sites, but when we reached the typical 3 month mark before moving, our flat was still not online so I decided to make a fancy PDF to distribute among friends and family workplaces.

I made sure to highlight our address and set up a gmail account for the replies from the ad. We wrote all the important flat details in both German and English and I included lots of pretty pictures taken in the flat or from the balcony. I included some from when we were moving and the place was empty and some with furniture to give people a better sense of space.

I also took the time to measure out the entire flat and draw a floor plan so that people would know the approximate size and layout of the flat.

Thankfully we did have a fair amount of interest regarding the flat. So much that I set up two visitation days for people to come view the place…. which meant I had to clean pronto!

Kay was gone during the week before the visitation so I cleaned up the dining room, living area, laundry room… tidied my desk and then attacked my open wardrobe.

My wardrobe does not have space to have the doors because of the exposed beams in the room, so it was extra important that it be tidy. I took a few tips from my friend Jeannine over at Small Chic Home and took 1/5 the clothes out of the wardrobe and rearranged everything to look neutral (dark) in the drawer area to the left.

…yes, I only ever keep pretty bags on my wardrobe shelves and I never stuff them full of clothes. Cough cough.

It’s pretty much the cleanest my wardrobe has ever looked!

With everything put in its place, the place looked great!

I took out the orchids from the bathroom where they live and placed them around the flat to add some greenery.

All our laundry was hidden away in the laundry room as well… usually it’s hanging out next to the balcony door up there.

And last but not least, I made Kay sweet rolls for breakfast on Monday and they just happened to come out of the oven right before the visitors arrived… (because I am evil like that.)

We did advertise the place as a 2 room (or 1 bedroom in US), but some people saw the floor plan I drew and really thought the laundry room could be a second bedroom, making the place a 3 room flat. Alas, the ceiling is all attic in that room and there is a big washer and dryer taking up a lot of room… not really a bedroom by any means!

But we did have people who loved the flat and wanted to apply right away. In the end, we were able to find a tenant to take the place over immediately after we move out so we can avoid paying double rent!

What kind of tactics do you use to get out of a lease on time?

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How to rent a flat in Switzerland

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I mentioned how 70% of the population in Switzerland rents, but did you know that it is estimated that only .06% of the flats in Zürich are vacant? That’s not a typo. 99.94% of the flats here are taken.

TMLSS: It’s hard to secure a flat, especially for a good price.

zurich attic flat

This is a short (long?) guide about how to rent here based on our experience.

Step 1: Prepare your application documents (BEFORE looking for a flat)

A. Go to the local registry office and request a “Betreibungsauszug” if you have been in the country 6 months or longer. This is basically a piece of paper that says you don’t owe anyone any debts and without it, you are often very unlikely to get a flat. For newcomers who do not yet have a debt free history within the country, this can be especially crippling because without this paper… you may appear untrustworthy to a landlord.

B. Have a copy of your residence permit/work permit and passport or your ID if you are Swiss. Please note, residents with temporary permits (L) are also very unlikely to be accepted for a flat, but for some people this is their only option.

C. Copies of the last 3 months pay slips from work or a letter from HR stating your salary. In general, you are not allowed to rent a flat that is more than 33% of your salary.

D. If you have a letter from your HR or previous landlord, make sure you have copies ready. Also prepare contact details (phone numbers) for any references you wish to include on your application.

E. Start preparing a cover letter for your applications which you can modify for different flats. Write about yourself, why you want the flat and why you will be an excellent tenant choice.

F. It is not required, but I recommend including a photo of yourself as well.

Step 2: Look for a flat

Make a budget around 1/4 to 1/3 of your monthly salary, but not more. Landlords often will not rent to you if you earn “too much” or “too little”. Start looking for flats on sites like www.homegate.ch, www.comparis.ch, www.immostreet.ch and the local newspaper. Tell everyone you know that you are looking for a flat and ask if they know anyone that knows anyone that knows anyone. Friend connections are still the best way to get the early scoop on a cheap flat up for grabs, but most of us have to do the legwork on sites like homegate and hope it works out.

Step 3: Visit

Almost no landlords here rent flats without meeting tenants first or knowing they have viewed the apartment in person. Either make an appointment with the current tenant, landlord, or show up for pre-scheduled flat viewings listed online.

During the visit it is important to ask all your questions about the flat. Here are some of our favourites:

  • Why are you moving out?
  • Is it a quiet neighborhood?
  • What are the neighbors like?
  • Is this a smoking building? Do you smoke?
  • Is there a cellar in the basement and may I see it? (Cellars or attics are pretty standard with flats in Switzerland)
  • What are the utilities like?
Step 4: Apply IMMEDIATELY

Now this step is crucial, so pay attention.

If you show up to a flat viewing, there may be 200 other people there. That’s truly happened to me before. 200. People.

It is important to show up to viewings exactly when they start and to post your application or turn it in immediately. This is why it is so important to prepare your paperwork ahead of time. If you like the flat and they have applications available there, fill it out and turn everything in together as soon as possible. Same day if possible. Your renting livelihood depends on it.

Renting applications generally ask for all applicants’ citizenship, age, gender, personal address, work address, phone number, reference numbers, how much you earn, if you have children or not, if you have pets, and even if you play an instrument.

If you hide the fact that you have a dog and you play the piano, the landlord will not be very happy later on and they may ask you to move out because you are violating their terms of agreement. Also, be prepared to have all your references checked up on. They are very keen to have a nice tenant with such a large pool to choose from.

Step 5: Wait for news

Most landlords have already made up in their mind what kind of tenant they want. They may be looking for a single male, single female, a couple without children, or a family, but you can be sure they will not tell you what kind of person they are looking for. That would be too easy!

Applying before anyone else gives you a small leg up because they often give flats on a first-come-first-serve basis if you meet their qualifications.

Points may be taken off if you are an unmarried couple because the landlord is wary about a possible breakup, families with small (noisy) children, roommate situations because again the landlord is wary of people moving out, and anyone with a pet or loud musical instrument is going to have difficulty finding a landlord that accepts them.

Step 6: Rejection

Kay looked for flats for six months after he finished university before he found one he liked that agreed to rent to him. When we moved in together, we searched together for 7 months before finding a flat that would accept us.

We went through a lot of rejections. We weren’t sure if people were unhappy that we weren’t married or didn’t have kids or that we earned too much or too little. There’s never any feedback on why you are not accepted.

Repeat Steps 1-5 until you can make it past Step 6.

Step 7: Acceptance

Hallelujah! You thought this day would never come.

Usually when a landlord agrees to rent, you will meet with them or their agency to sign a contract after you agree on a move in date and give your deposit into a 3rd party bank account that neither of you have access to.

Deposits are usually 1-3X your monthly rent. If you are renting a modest 2500CHF one bedroom flat in Seefeld, your deposit just might be 7500CHF. (That’s over $8000 USD at this time.)

Rent is also due upfront, not at the end of the month… so when you move in you will usually be required to give either 3 or 4X your monthly rent unless you can negotiate a 1 month deposit. For a 2500CHF flat, this would be a whopping 10,000CHF!

But don’t worry… employers are often friendly and will loan you money to pay for your deposit if you are just moving here for the first time. And fret not, even people with dogs and pianos or unemployed fellows can find a flat. You just need to persevere. 🙂

I’ll get into taking over and leaving a flat in another post. 😉

How complicated is the rental process in your area?

*All photos are personal unless noted*

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