Where should I buy property – Switzerland or France?

House prices have historically been very stable in Switzerland, and with capital gains tax levied on individually owned real estate, house purchase in Switzerland is best considered as a lifestyle choice rather than as an investment decision. If the purchase is primarily investment driven, you should be considering a 10 year term if you wish to optimise total returns compared against total purchase costs.

By contrast, France has recently seen quite significant property price growth, and this is particularly true of the French departments which surround Geneva. However with a strengthening Euro v Swiss Franc exchange rate, prices have fallen from their highs recently. Even so it is generally still true to say that you can buy more for your money in nearby France than Switzerland.

There may be resale restrictions on the bought property; in some Swiss cantons, notably the Valais, foreign buyers cannot sell their property within 5 or 10 years of purchase. There may also be restrictions on renting out the property. Switzerland also levies a property tax on a notional rental value of the property, less any related mortgage. The amount payable varies according to each canton. In addition, depending on how long you have owned the property, and whether it is your main residence, capital gains tax may also be due on the sale of the property. This will vary from canton to canton and it may be possible to offset certain property renovation costs against any capital gains tax payable.

On balance, (and excluding any potential restrictions on who may purchase property in each country), the final decision as to where you decide to buy is one based mainly on lifestyle issues, although there are significantly different tax regimes relating to property purchase in each country.

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