Switzerland: It is difficult for foreign investors to buy a home in St Moritz

Buying a house in Switzerland is not simple for overseas buyers, as Keller Law establishes that only a limited amount of dwellings can be sold to foreigners.

The Parliament is considering abolishing the law to liberalize the property market, since foreign tourists are well-liked and cuddled. The abolition of the restrictive law on real estate property ownership will make prices soar, since the demand is four times as high as supply.

Furthermore, new rules have been introduced recently to limit the building of new constructions. This will make prices rise even more dramatically. The international demand is driven by American, Russian, Indian, Arab and European investors.

50 new dwellings are being built in St Moritz. According to the law, one third of the apartments built in every residential building must be used as primary residence of resident workers; one third must be destined to holiday homes for Swiss and foreign citizens residing in Switzerland; one third can be sold to overseas investors who want to use it as their holiday home. In this case the purchase is immediate, as it takes place after having obtained the permission of the Canton involved.

Selling to foreign buyers is worthwhile for builders, as they can sell apartments at a higher price to them. Prices are controlled only for properties purchased by resident workers.

A newly-built dwelling in Zuoz – an appealing ski resort that hosts also a golf course – costs 14 thousand Swiss francs per square metre approximately, which means less than 10 thousand euros per sqm.

In St Moritz there are highly-finished buildings located in wonderful locations. The price of these luxury homes can even reach 50 thousand Swiss francs per square metre.

Property owners in St Moritz usually do not rent their homes when they do not use them, as the quality of their properties is so high they do not want to run the risk of having their homes ruined.

Taxes are low. They amount to 2.3% of the final sale price.

The resale of properties is very difficult in Switzerland. A foreign citizen can sell his/her home to another overseas buyer only proving there is not any Swiss buyer interested in purchasing it.

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