Delving into the heart of real estate in Switzerland

Diving into the heart of real estate in Switzerland: while the French real estate market is in crisis, we wanted to know what is happening with our Swiss neighbors during a trip to Bern. The capital of Switzerland harmoniously combines tradition and modernity. As the political center of the country, Bern is home to many international institutions, while offering its residents a pleasant living environment, with its parks, green banks along the Aare and breathtaking views of the surrounding mountains. But it is as real estate professionals that we made the trip. To gain a better understanding of this real estate market and its context, Agence Etoile met Stephan Schenk, founder of Schenk Immobilien.

Switzerland: a unique federal system

In Switzerland, each canton is free to set its own tax rates and determine its tax policies, This fiscal decentralization allows the cantons to adapt to the specific needs of their population and their economy, This fiscal autonomy of the cantons is a pillar of the stability and diversity of the Swiss tax system, offering taxpayers and businesses a certain flexibility while preserving the unity and cohesion of the country.

Meet the Bernese real estate agent

Stephan Schenk founded his real estate agency in Bern 20 years ago. His real estate company has 5 sales staff. They are very familiar with the characteristics of their sector, Bern and Thun, as well as the requirements of sellers and buyers. The agency’s clientele is mainly Swiss. The agency only offers properties for sale exclusively. The agency’s fees are 3% excluding taxes. It sells around 45 houses and apartments each year.

The real estate market in the canton of Bern

The real estate market in the canton of Bern is particularly favourable, with interest rates currently below 2%. This creates constant demand, which is essential for investors.

As for prices, in the Embassy district, the average price is around CHF 17,000 per square meter. In slightly more remote areas, this price can drop to around CHF 10,000 per square meter, or even CHF 7,000 per square meter in less central districts. (1 CHF = €1.07)

Average property prices are around CHF 1 million for one- or two-room apartments.

The deadline for signing a preliminary agreement, once a client has accepted a purchase offer, is around three months.

The legislative context in the canton of Bern

Private investors do not pay income tax on rental income. Only real estate investment companies pay a 20% tax on their profits. Capital gains are taxed in the first five years following the acquisition of a property.

Regarding property tax, the system is special: a buyer is not there for the first two years following the acquisition of a property. After this period, if he occupies the property, he can benefit from a reduced property tax rate. On the other hand, if the property is rented out, an increase in property tax applies.

It should be noted that there are no strict regulations in the canton of Bern regarding the energy performance diagnosis, unlike other Swiss cantons. In addition, there are no specific rules governing the practice of the profession of real estate agent.

The swiss administrative and economic model is distinguished by its unique combination of federalism, direct democracy, and a highly skilled workforce. Switezerland emphasizes innovation and efficiency, fostering a stable economy. The Swiss real estate market remains balanced. The price level remains high with low interest and liberal taxation.

André Perrissel