Buying a property is a process that can take weeks or months.
There are legal, financial and tax-related stumbling blocks to consider.
This are the most importants points :
If you want to buy a property, you should familiarise yourself with the local laws and get information and support from a lawyer and/or experts like us.
Buying property in Switzerland:
For foreign nationals resident in Switzerland: Citizens of the European Union and the European Free Trade Association (EFTA) have the same rights as Swiss citizens with regard to the purchase of property.
For third-country nationals, however, buying property in Switzerland is much more complicated.
Buying property in Spain:
Foreigners can purchase property without restrictions. Even without a main residence in Spain.
An acquisition via a foreign-owned company and its tax consequences must be taken into account.Bei Immobilienkäufen geht es fast immer um hohe Geldsummen.
Notarisation is obligatory in Switzerland
As soon as you have found the right property at the right price and the mortgage has been finalised, the purchase must be handled by a notary.
The property purchase agreement and the agreement on the establishment of a right of first refusal or a purchase right must be notarised. Without notarisation, a property transaction is not legally valid in Switzerland, for example.
Notarisation is not always necessary in other countries.
I generally recommend it whenever possible!
If the property transaction is handled by a notary, the buyer should have the contract checked by a construction lawyer before signing if there are any doubts.
This applies in particular in countries where not all buildings and/or conversions are authorised and legally registered.
In some countries there is a mixed form in which there are both official and professional notaries.
However, it is also clear that although they are organised differently, the official notary's office and the freelance notary have the same tasks and responsibilities with regard to the public notarisation of purchase contracts.
These arise in particular from the purpose of the public notarisation, such as clarification of the parties with regard to rights and obligations of the property, any restrictions on use, creation of solid legal grounds for register entries and other information.
Legal support is not always necessary
Whether the support of specialists is required for a property purchase depends on the specific individual case. No additional legal support is usually required for the purchase of an existing detached house or condominium in Switzerland. This is completely different in Spain. I always recommend expert clarification to ensure legal certainty.
Buyers should pay attention to how the statutory liens are regulated in the draft contract. These include, for example, property gains tax liens, builders' liens and condominium owners' liens. In Spain, further information such as a certificate of habitability, etc. is also included.
The warranty provisions, guarantee claims and any inherited burdens must also be carefully studied.
This information is used by the notary to prepare the property transaction.
A property purchase agreement should contain at least the following points:
Name and address of the seller and buyer
Detailed description of the property with address, land registry number, building insurance number (if available),
plot area
Purchase price
Allocation of fees and taxes (the payment of property gains tax in particular should be clearly regulated)
Terms of payment
Condition of the property at the time of transfer
Date for the transfer
Easements (should match the details in the land register)
Arrangements for any insurance
Contractual penalties or other provisions if the buyer or seller does not fulfil the contract
All documents that are part of the purchase contract
The public deed must contain the entire content of the contract.
If essential contractual points are not notarised, both the notarised contract - because it is incomplete - and the complete contract that was actually agreed - because it was not notarised - can be declared invalid. (In the example in Spain: If, for example, the swimming pool has not been officially authorised, it will no longer be possible to change anything about it later and, in the worst case, it will have to be removed. This would then also result in a reduction in the value of the property).
But in practice, this hardly ever happens. Not in every country does the notary take on this control function.
That is why it is important to work together with experts.
Public notarisation protects the parties to the sale
Public notarisation serves to ensure legal certainty and the protection of the parties. The notary verifies the identity and capacity to act of the parties, the ownership structure and encumbrances of the property, the financing and the tax consequences of the purchase.
He informs the parties of their rights and obligations when the contract is signed and ensures that the purchase contract is clear and complete. He also arranges for the change of ownership to be entered in the official land register.
Processing the purchase price payment
In most cases, the buyer and seller agree that the purchase price will only be transferred once the contract has been signed by both parties, notarised and entered in the land register.
Any down payments will be deducted. The buyer should therefore prove his ability and willingness to pay, for example with an irrevocable guarantee from his bank.
Occasionally there is also talk of an "irrevocable promise to pay".
In Spain, it is still sometimes customary for the remaining purchase price to be handed over to the seller by bank cheque at the notary appointment. I recommend a bank transaction whenever possible in order to save the high costs of writing the cheque.
Important: The exact payment modalities should be specified in the purchase contract.
The costs for the public notarisation depend on the value of the property.
This also applies to any taxes.
Reservation agreement and preliminary contract
Before the purchase contract is officially notarised, the parties may conclude a reservation agreement or a preliminary contract - option contract.
This is a written declaration in which the parties mutually undertake to sign the purchase contract at a later date.
This is different in Spain, for example:
If the buyer does not fulfil the option contract, the deposit paid is forfeited in full.
If the seller does not honour the option contract, he must pay the deposit paid by the buyer and a penalty equal to the amount of the deposit paid to the buyer.
Example: Option contract for a villa with a purchase price of 5 million euros. - Down payment usually 10% = 500,000 euros.
The seller does not fulfil the option contract: repayment of the down payment of € 500,000 and a penalty of € 500,000.
Are you planning to buy a property in Switzerland or Spain soon?
I will be happy to provide you with expert advice from a team of professionals who can assist you with any property situation in your desired country in your own language.
For example on Mallorca:
Enchanting Finca in Calvia
In Switzerland:
Puristic villa with mooring on Lake Zurich
I look forward to supporting you in this complex topic.
Manuela Olmesdahl
Phone/Whatsapp: +41 76 376 61 11
E-mail: office@manuelaolmesdahl.com
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