A new development in the Swiss Alps has secured an exemption from Switzerland’s federal law on overseas home ownership which opens the way for foreign buyers to purchase without a permit or time limit.
The exemption from Lex Koller, the informal name for the rule that regulates overseas buyers in Switzerland, means that property investors from around the world can once again look to Switzerland for a second home or a buy to let investment without restrictions on when and to whom they can sell.
The project, which is set to boost the size of the traditional Swiss mountain village of Andermatt, is being built in conjunction with a major redevelopment of the ski area which will join up the current facilities with neighbouring Sedrun as well as the construction of new lifts, gondolas and restaurants due from completion in 2018 with 120 kilometres of pistes.
When it is finished Andermatt Swiss Alps will have six four and five star hotels, about 500 apartments, 28 luxury chalets, conference facilities, a swimming pool and an 18 hole championship golf course which is already open in the summer months.
British buyers have already being showing interest as the exemption from Lex Koller means that Switzerland is being seen as an alternative to France or Spain for both holiday home and buy to let investors due to uncertainty over Brexit. Switzerland is not a member of the European Union but it is a member of the single market through a series of bilateral agreements.
Currently the Lex Koller exemption has been granted until 2030 and Russell Collins, London based sales director of Andermatt Swiss Alps, believes that it will be extended, giving buy to let property investors the ability to sell without restriction in the longer term.
‘The exemption is currently until 2030 but we expect it to continue beyond this, giving investors an exit strategy well after this initial timeframe. Buy to let investors and holiday home owners can also let their properties through our rental scheme which currently offer a 3% net rental guarantee for three years,’ he explained.
He pointed out that the development is also exempt from Switzerland’s Second Home Initiative which limits the construction of second homes to 20% of the number of properties being built in a community.
So far around 50% of buyers are from Switzerland with the rest coming from the UK, Germany and Italy. Some are British expats and others are UK based buyers who want to let out their property and still use it themselves.
The apartments, starting at 600,000 Swiss Francs, around £500,000, are not aimed at the super wealthy. Because the project was envisaged as a major regeneration of a rural village that had seen its population decline amid fears that it would become a ghost town, attracting buyers from overseas is seen as an integral part of an overall vision that will see local jobs created and make Andermatt into the focal point that it once was as a village at the centre of trade routes from France, Italy and Germany.
One of the more interesting aspects is that even although the development is set to change the village for ever, some 96% of local people were in favour of the plans for the hotels, apartments and ski area development. The resort will also become car free.
‘As part of the vision for regenerating a rural area, it was realised that they would have to let foreign buyers in, in large numbers, not just the super wealthy. The exemption from Lex Koller and the Second Homes Initiative makes this a unique situation,’ said Collins.
‘It is a very rare opportunity to invest, and be part of, a really dynamic local growth story in a country that offers economic and political stability. A mind concerns about Brexit, Switzerland is being increasingly seen as a safe haven for property,’ he added.