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Swiss Holiday Home Insurance.

Please note- we currently cannot offer Swiss Holiday Home Insurance.

Holiday Home Insurance Switzerland. Switzerland has a lot to offer the potential holiday home owner, second home owner or buy to let holiday letting investor… great ski chalet resort, crisp mountain air, beautiful lakeside log cabin and chalets for summer activities like fishing, sailing, walking.  The country has a well establish holiday market, a very stable economy and a neutral political position.  In addition the Swiss Government is beginning to embrace more foreign property investment…

The Holiday Home Market in Switzerland –  the Government of Switzerland is in the process of de-regulating Swiss a series of 1960 federal property laws (known as the Lex Friedrich), to allow non Swiss domiciled nationals to buy property in Switzerland as a second home, buy to let investment or holiday home. In the past there has been a strict limit on the number of foreign speculators allowed to influence the property market and as a result Switzerland has enjoyed stable yet gentle growth in property prices (particularly over the last 20 years). This is due to the incorporation of the free movement of people laws enforced by the EU. Some restrictions will continue on the number of properties available for second homes or holiday homes and in certain ‘cantons’ of Switzerland these restrictions will vary. For instance in some you may only be able to buy a log cabin chalet and in other areas it might be restricted to a ski chalet. Additionally, some usage restrictions apply to prevent quick sales or leaving the property unoccupied. To make understanding purchasing even more complicated, there is a delay before property title passes from seller to buyer – these vary by canton… so good local knowledge and research is essential before purchasing a holiday home.  By 2010 these canton variations will disappear and be replaced by a unified property purchase process. This loosening of administrative restrictions will create stimulus for new property development, modernisation of controlled property speculation. The government will still set annual quotas on non-resident permits looking to buy a Swiss holiday home. One of the most popular areas is lakeside of Lake Geneva where over 60,000 Brits live. The reasoning behind the Governments decision to relax restrictions is to attract foreign investment in residential housing infrastructure and boost tourism to maintain and boost the economic stability of the country.

Buying a Swiss Holiday Home – if you are thinking of buying a holiday home in Switzerland you will need to consider the local property purchase laws and processes. Your first step will need to be the employ of a qualified Notary to oversee the contractual elements such as the “a Promesse de Vente”. The normal deposit is between 5% to 10% and this must be paid up front. As a non Swiss resident you must receive written approval from the Commission Foncière to allow you buy the holiday home – permission takes around 2 months. You should also investigate the purchase costs usually equate to about 8% of the purchase price made up form the Real Estate Transfer Tax, Registration Fee, Notary Fee and Estate Agent’s Fee. The main holiday home areas are: Aargau, Appenzell Ausserrhoden, Basel Land, Bern, Fribourg, Geneva, Glarus, Graubuenden, Lucerne, Neuchatel, Nidwalden, Schaffhausen, Schwyz, Solothurn, St Gallen, Thurgau, Ticino, Uri, Valais, Vaud, Zug and Zurich.

Renting Out Your Swiss Holiday Home – as a landlord it is important you are aware of the main differences in buy to let investments for letting purposes compared to the UK. For instance, income derived from holiday lets/ tenant’s rental income is not taxable as it is in UK. Instead local authorities or ‘cantons’ charge a local inheritance tax and local tax (similar to council tax) for water, insurance and other local services. As Swiss interest rates have traditionally hovered around 3% to 4%,by obtaining a Swiss overseas mortgage you must increase your rental yield (compare to using a British mortgage). However, the loan to value ratio from mortgage lenders/ banks in Switzerland is only typically around 65% which is much lower than UK buy to let mortgages form UK mortgage lenders. There are also restrictions on increasing rent above the published consumer inflation index.

Other tenancy laws for long term holiday letting relate to deposits and tenancy agreements…. For instance, the security deposit must not be more than three months rental periods and must be held in escrow to protect the tenant. Tenants also have rights with regards to the limitations and restrictions in any tenancy agreement you ask them to sign; in Switzerland you can choose to use either the ‘Specific term contract’ or an ‘Indefinate Duration Contract’. In the first, notice of termination is assumed to have taken place at the end of the agreed tenancy period even if the tenant did not provide written notice. In the second, either the landlord or the tenant must provide written notice to the other to terminate the contract at pre-agreed intervals. Lastly a disagreement with a long term tenant which results in eviction proceedings could take up to 9 months to complete due to the legal implementation of laws which are heavily pr-tenant. To find out more about tenants and landlords rights and responsibilities please read the Swiss Code of Obligations, and the Rent of Residential Properties

Please note at the present moment, Assetsure are unable to offer Holiday Home Insurance in Switzerland