Buying a house in Switzerland: requirements and rates (cross-border guide)

Context

In a nutshell

• New Frontier Agreement in force from 1 January 2024
• Frontier G: deductible €10,000, ex-frontier: €7,500
• Direct federal tax: 23% up to €28'000, 35% €28'001–50'000, 43% over €50'000
• Swiss rates: AVS/AI 5.3%, AD/AC 1.1%, LPP 7–18%, LAMal 0.7-1.5%
• Cantonal and private banks offer different rates and requirements

Key facts

• What: New Frontier Agreement
• When: 1 January 2024
• Where: Switzerland
• Chi: DRY, SEM, USTAT, UFSP/BAG, SUVA
• Amount: €7,500 (former frontier workers), €10,000 (new frontier workers)

The New Frontier Agreement, signed on 23 December 2020 and in force from 1 January 2024, introduced new tax exemptions for frontier workers. The new frontier workers (those who became such after 17 July 2023) enjoy a deductible of €10,000, while the former frontier workers (already such before that date) maintain a deductible of €7,500. This agreement was ratified in Italy with Law 83 of 13 June 2023. Switzerland is not a member of the EU/EEA, but has a Double Taxation Convention with Italy, signed on 9 December 1976. This means that border residents are exempt from paying Swiss direct federal income tax, which is withheld only in Switzerland and not in Italy, thus avoiding double taxation thanks to the 730 CE Framework tax credit. Switzerland has a tax system based on federal and cantonal rates, with

Operational details

Practical analysis

Differences between cantonal and private banks

Cantonal and private banks offer different rates and requirements for mortgage loans. Cantonal banks are usually stricter on credit requirements, but offer lower rates and more transparency on conditions. Private banks, on the other hand, can offer more competitive rates, but with more flexible credit requirements. It is important to assess your financial condition and specific needs before choosing between the two options.

Minimum own funds

The minimum own funds for a mortgage loan in Switzerland vary depending on the bank and credit conditions. Cantonal banks usually require higher own funds than private banks. For example, a cantonal bank might require own funds equal to 20% of the value of the property, while a private bank might only accept 10%. It is important to consult several banks to find the most advantageous offer.

Interest rates

Interest rates for mortgage loans in Switzerland are influenced by various factors, including the general economic situation, demand for credit, and the monetary policies of the Swiss National Bank (SNB). Cantonal and private banks offer variable rates, with cantonal banks tending to offer lower rates and private banks able to offer more competitive rates. It is important to compare offers from different

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

Action

Steps to Get a Mortgage

1. Assess your financial condition and specific needs. 2. Consult different cantonal and private banks to find the most advantageous offer. 3. Submit the necessary documentation, including proof of stable income and a good credit history. 4. Sign the mortgage contract and receive the funds.

Deadlines and procedures

The deadlines and procedures for obtaining a mortgage loan in Switzerland vary depending on the bank and credit conditions. It is important to consult the bank for detailed information on deadlines and procedures. Cantonal and private banks have different maturities and procedures, with cantonal banks tending to have stricter maturities and procedures.

Useful tools

Use the calcolatore stipendio to assess your ability to pay and the comparatore di conti bancari to find the most advantageous offer. For detailed information on direct federal taxes and tax exemptions, see the tax calculator.