Mistakes to Avoid When Buying Real Estate in Switzerland

Published on October 2, 2025 and written by Cyril Jarnias

Purchasing real estate in Switzerland often represents a lifetime investment. However, many buyers make mistakes that can have significant financial consequences. In this article, we will explore the main pitfalls to avoid for a successful real estate purchase in Switzerland.

Underestimating the importance of accurate valuation

One of the most common mistakes when buying real estate in Switzerland is not giving enough importance to the accurate valuation of the property. A fair and precise valuation is crucial for the smooth running of a real estate transaction. It directly influences the sales period, negotiation power, and ultimate satisfaction of the involved parties[1].

For the seller, a realistic valuation allows setting a sale price consistent with the market. An overvalued property risks staying on the market for a long time, which can raise suspicion among potential buyers and ultimately lead to a price reduction greater than necessary. Conversely, undervaluation can result in significant financial loss.

For the buyer, a good understanding of the property’s value enables making a relevant offer and negotiating effectively. It also reduces the risk of unpleasant surprises during financing applications, as banks rely on their own valuations to grant loans.

An accurate valuation also facilitates negotiations between parties. It provides an objective basis to rely on, thereby reducing the risk of disagreements or negotiation breakdowns.

Neglecting the impact of location on property value

Another frequent mistake is underestimating the importance of location when buying real estate in Switzerland. Even if a property is exceptional, its value remains strongly tied to its location. Ignoring local market specifics can lead to valuations disconnected from reality[1].

Location influences not only the current value of the property but also its long-term appreciation potential. Factors such as proximity to public transportation, schools, shops, and services, as well as neighborhood quality of life, play a crucial role in determining real estate value.

In Switzerland, where the real estate market is particularly dynamic and competitive, a good location can make all the difference. For example, in cities like Geneva or Zurich, where demand is high and supply limited, a well-located property can see its value increase significantly over time.

Therefore, it is essential to thoroughly study the neighborhood, its evolution, and prospects before deciding. This involves researching urban planning projects, regional demographic and economic trends, as well as the neighborhood’s reputation.

Underestimating hidden costs of real estate purchase

A common mistake when buying real estate in Switzerland is not accounting for all transaction-related costs. Beyond the purchase price, many additional fees can significantly increase the overall budget.

Notary fees, transfer taxes, land registry registration fees, and potential agency fees are all expenses to anticipate. In Switzerland, these fees can represent between 3% and 5% of the purchase price, depending on the canton[2].

One should also not forget costs related to obtaining a mortgage, such as application fees or property appraisal fees. Moreover, if the property requires renovation or compliance work, these costs must be included in the overall budget.

Finally, ongoing property expenses, such as property taxes, maintenance costs, or condominium fees, must be anticipated to avoid any unpleasant surprises after the purchase.

• Notary and registration fees
• Transfer taxes
• Real estate agency fees
• Mortgage-related fees
• Potential renovation costs
• Ongoing expenses (taxes, maintenance, condominium)

Neglecting the importance of thorough due diligence

A major mistake when buying real estate in Switzerland is not conducting sufficiently thorough due diligence. This crucial step allows verifying all legal, technical, and financial aspects of the property before finalizing the purchase.

Due diligence must include meticulous verification of all property-related documents, such as the title deed, building permits, any easements or mortgages, as well as condominium meeting minutes for apartments. It is also important to verify the property’s compliance with current construction and environmental standards[2].

A detailed technical inspection of the property is also essential. It helps detect potential structural issues, hidden defects, or necessary work that could significantly impact the property’s value or require substantial investments after purchase.

In Switzerland, where construction standards are particularly strict, it is crucial to ensure the property complies with all current regulations, especially regarding energy efficiency and safety.

• Verification of legal documents (title deed, permits, easements)
• Thorough technical inspection of the property
• Verification of compliance with construction and environmental standards
• Analysis of condominium meeting minutes (for apartments)
• Study of potential nearby urban planning projects

Underestimating the importance of financing

A common mistake when buying real estate in Switzerland is not paying enough attention to financing strategy. In Switzerland, real estate financing rules are strict and can significantly impact the feasibility of your purchase project.

Swiss banks typically lend no more than 80% of the property’s value. This means the buyer must contribute at least 20% in equity, half of which must not come from the 2nd pillar (pension fund)[4]. Therefore, it is crucial to properly assess your financial capacity before committing to a real estate purchase.

Additionally, Swiss banks apply strict rules regarding loan financial burden. This generally should not exceed one-third of the household’s gross income. This burden is calculated based on a theoretical interest rate (often around 5%), much higher than current market rates, to anticipate potential future increases.

It is also important to understand the different mortgage loan options available in Switzerland (fixed rate, variable rate, Libor, etc.) and choose the one that best suits your situation and long-term goals.

• Accurate assessment of financial capacity
• Understanding Swiss financing rules (maximum 80% loan)
• Analysis of financial burden relative to income
• Choice of appropriate mortgage type
• Anticipation of possible interest rate changes

Ignoring Swiss real estate market specifics

A common mistake for buyers, especially those from abroad, is not considering the particularities of the Swiss real estate market. This market has its own rules and dynamics that are crucial to understand for making a wise purchase.

The Swiss real estate market is known for its stability and high prices, particularly in major cities like Geneva, Zurich, or Lausanne. Real estate prices in Switzerland are much higher than in neighboring countries, due to scarce buildable land, very high construction standards, and the cost of labor and materials[4].

Another Swiss market specificity is the common practice of not fully repaying the mortgage. Indeed, many owners choose to maintain mortgage debt for tax reasons, as mortgage interest is tax-deductible.

It is also important to understand restrictions that may apply to real estate purchases by foreigners in Switzerland (Lex Koller). These restrictions vary by canton and property type, and can limit purchase possibilities for non-residents.

Finally, the Swiss real estate market can experience significant regional variations. For example, some cantons like Geneva have recently introduced cantonal preference measures for housing purchases, which can create disruptions in the local market[10].

• Understanding high price levels and their justifications
• Familiarization with maintaining mortgage debt practice
• Knowledge of restrictions for foreign buyers (Lex Koller)
• Analysis of regional and cantonal market specifics
• Monitoring regulatory developments impacting the market

Neglecting the importance of energy and environmental standards

A common mistake when buying real estate in Switzerland is underestimating the importance of energy and environmental standards. Switzerland is at the forefront of environmental regulation, and this directly impacts the real estate market.

Swiss energy standards are among the strictest in Europe. The Cantonal Energy Certificate for Buildings (CECB) is increasingly used to assess real estate energy performance. A property with a poor CECB rating may require costly renovation work to comply with current standards.

Moreover, Switzerland has ambitious CO2 emission reduction goals. This means real estate owners may need to carry out energy improvement work in the coming years, which can represent significant costs.

Therefore, it is crucial to consider the property’s energy performance when purchasing. A well-insulated property equipped with efficient heating and ventilation systems can represent significant long-term savings, both in energy consumption and resale value.

• Verification of building energy certificate (CECB)
• Assessment of potential compliance costs with energy standards
• Analysis of impact of future environmental regulations
• Consideration of long-term savings related to energy efficiency
• Study of subsidy possibilities for energy improvement work

Underestimating the importance of tax planning

A common mistake when buying real estate in Switzerland is neglecting the tax aspect of the transaction. Real estate taxation in Switzerland can be complex and varies by canton, which can significantly impact the real cost of your investment.

In Switzerland, real estate ownership is subject to various taxes and fees. These notably include wealth tax, which applies to the property’s fiscal value, property tax, and rental income tax (even for owner-occupiers, based on theoretical rent). Additionally, upon sale, a real estate gains tax may apply[6].

It is crucial to understand how these different taxes apply in the canton where you plan to buy. For example, some cantons offer tax deductions for energy renovation work, which can influence your purchase decision and investment strategy.

The ownership structure (in personal name, through a company, etc.) can also have significant tax implications. Therefore, it is recommended to consult a tax expert before finalizing your purchase to optimize your tax situation.

• Understanding different taxes related to real estate ownership in Switzerland
• Analysis of tax specifics in the purchase canton
• Evaluation of potential tax benefits (deductions for renovation, etc.)
• Choice of optimal ownership structure from a tax perspective
• Long-term planning to anticipate future tax implications

Neglecting the importance of long-term property management

A common mistake when buying real estate in Switzerland is not sufficiently anticipating long-term property management. Whether for an owner-occupied property or rental investment, managing real estate involves responsibilities and costs that are crucial to consider.

For a condominium property, it is essential to understand how the condominium works and the resulting responsibilities. This includes participation in general meetings, contribution to common charges, and involvement in decisions regarding building maintenance and renovations.

For an individual property, maintenance and repairs are entirely the owner’s responsibility. Therefore, it is important to budget for annual maintenance and anticipate major work that might be needed in the medium and long term.

In the case of rental investment, management can be particularly time-consuming. It involves managing tenant relationships, handling repairs, ensuring rent payments, and complying with numerous Swiss regulations regarding rental property.

• Understanding responsibilities related to condominium
• Planning an annual maintenance budget
• Anticipation of major medium and long-term work
• Familiarization with rental regulations (for rental investments)
• Evaluation of need for professional management assistance

Purchasing real estate in Switzerland is a significant investment that requires careful preparation and thorough understanding of the local market. By avoiding these common mistakes and adopting a thoughtful, well-informed approach, you significantly increase your chances of making a satisfying and profitable long-term purchase.