A view of Morcote, one of the most picturesque villages in Ticino

 

Interesting notes:

In Ticino up to 90 new and pre owned properties are put up for sale yearly to non residents looking for holiday homes.

 

One of the many beautiful "Palazzi" in Lugano

Step 6 - Closing the Transaction

As you would expect the deal is sealed at a notary. Make sure that you make the transaction subject to the "LAFE" approval (see Step 2). Furthermore, in case you acquire an apartment in a condominium, carefully check the PPP ("Proprietá Per Piani") details. It is the PPP that stipulates which parts of the building actually become your property. Remember to look beyond the apartment and also consider parking spaces and the cellar. In case of any doubts regarding the PPP you should get it clarified through the notary and/or the "Ufficio dei Registri".

If you purchase a holiday home we recommend that from the very beginning you make sure that the property is easy to resell or rent.

What happens when you want to sell?

Buying is a long-term commitment. It is therefore also important to know what happens if you want to sell your house.

According the the "LAFE" (or Lex Koller) approval you can not sell within the first 5 years counting from the moment that the property has been registered in your name at the cadastral offices. After that you can sell at anytime, at any price to anyone who has the right to buy, both to Swiss citizens and foreign residents that meet the necessary (LAFE - Lex Koller) requirements. Keep in mind that if you sell the property at a higher price than you paid for it, you will have to pay tax on the capital gain. The tax percentage that needs to be paid is dependant on the period that you owned the property. In Ticino for up to 5 years it is 27%. For up to 10 years it is 14%. You need to complete the "Modulo dichiarazione per l'imposta sugli utili immobiliari" within 30 days of the sale of the property.

Real estate sale contracts need to be made in writing and a notary needs to authenticate the agreement. Even preliminary contracts or letters of intent need to be notarised alike. Contracts which do not meet the formal requirements are void and unenforceable.

Selling real estate in Switzerland is expensive. An Agent's commission is typically 5% for an "exclusive" sale that includes outbound marketing activities to promote the property. If you decide to engage multiple Agents the commission fee will be lower but then you either have to pay for the outbound marketing activities (like advertising) yourself or you have to wait until the Agent finds a Buyer among the people that he/she is in contact with. Typically this means that the sales cycle of a non-exclusive sale is longer. You can always terminate an Agent if you think he/she is not performing. Keep in mind however that if you sell the property to someone with whom the terminated Agent has actively worked on selling the property within 2 years of termination, you will be charged 5% commission. Effectively this means that you would pay double commission.

Can I rent out my house?

It is conceivable that at some point you have the desire to rent out your property to others. You can only rent it out for holiday purposes to a maximum of 10 months per year and never for a permanent residency.