Swiss property glossary

From affordability to usufruct: the terms you will meet when buying a home, explained briefly and without jargon. Every entry links directly, and for anything deeper there are the guide articles.

Affordability

The banks' core rule: an imputed interest rate of around 5 per cent, one per cent for maintenance and the amortisation may together amount to at most around one third of your gross income. Above that, you don't get the mortgage, however low current rates are. → Affordability calculator

Amortisation

Paying back the mortgage. It is compulsory only for the second mortgage, the part above two thirds of the lending value: it must be paid off within 15 years or by retirement, directly to the bank or indirectly via a pledged pillar 3a account. → Amortisation: direct or indirect

Bidding process

A form of sale without a fixed price: interested buyers submit offers within a deadline, often over several rounds. If you bid, know your personal price limit beforehand and bring a financing confirmation from the bank, otherwise your bid carries little weight. → Financing confirmation

Building lease (Baurecht)

The right, entered in the land registry, to own a building on someone else's land, usually for 30 to 100 years against an annual ground rent. When buying a building-lease house, what matters are the remaining term, the rent adjustment clauses and the reversion arrangement: what happens to the building at expiry is set out in the building lease contract.

Condominium ownership (StWE)

The Swiss form of apartment ownership: co-ownership of the land with the exclusive right to use and fit out specific rooms. Common parts such as the roof, facade and heating are decided by the owners' meeting according to the rules; the key purchase documents are the deed of constitution, the rules, the minutes and the balance of the renovation fund.

Easement (Dienstbarkeit)

A right entered in the land registry that encumbers a plot in favour of another plot or a person: say, a neighbour's right of way across your drive, a pipeline right, a right to build closer than normally allowed, or a right of residence. Easements pass automatically to the new owner on a sale. That is why the land registry extract belongs before the purchase decision, not after.

Equity

At least 20 per cent of the purchase price, of which at least 10 per cent must be hard capital such as savings, securities or pillar 3a; the rest may come from your pension fund. On top come the purchase costs, which you pay additionally from savings. → Equity and the pension fund

Financing confirmation

A free, non-binding statement from the bank that it would finance your purchase up to a certain price, subject to checking the property. In a bidding process it is effectively the entry ticket. → How to get the confirmation

Fixed-rate mortgage

A mortgage with a fixed rate and a fixed term, usually between 2 and 15 years. It makes your costs predictable; in return, an early exit is expensive because an early repayment penalty falls due. → Which mortgage suits you

GEAK energy certificate

The cantons' building energy certificate: it grades the building envelope and overall energy efficiency in classes from A to G. The GEAK Plus additionally contains an advisory report with specific renovation options and cost estimates, and when buying an older house it is the most useful document after the land registry extract. → Energy renovation

Imputed interest rate

The stress-test rate of around 5 per cent that banks use to calculate affordability, regardless of the actual mortgage rate. It makes sure you could still afford the home in a high-rate period. → Understanding affordability

Imputed rental value (Eigenmietwert)

A notional income that owners pay tax on for living in their own home; in return, mortgage interest and maintenance are deductible. Switzerland approved the switch to abolish it at the ballot box in 2025; until it is implemented, the imputed rental value continues to apply.

Land registry

The official register of all plots of land: ownership, liens, easements, priority notices and annotations. Ownership only passes with the entry in the land registry, not with the signing of the contract. You get the current extract from the land registry office, and you should read it in full before any purchase.

Lex Koller

The federal law that restricts the acquisition of Swiss property by persons abroad. If you are resident in Switzerland and buying your main home, you are generally not affected; holiday homes for foreigners are only possible in certain locations and within quotas.

Loan-to-value (Belehnung)

The ratio of the mortgage to the value of the property. For owner-occupied homes, banks finance at most around 80 per cent; the rest is your equity. Decisive is the lower of purchase price and bank valuation, the so-called lowest-value principle.

Market value

The price currently achievable in the market. Banks estimate it independently of the purchase price and finance on the lower of the two values. If the bank's valuation is below the purchase price, you must cover the difference in full with additional equity.

Minergie

A voluntary Swiss building standard for energy-efficient buildings with systematic ventilation, in the levels Minergie, Minergie-P and Minergie-A. Certified houses have lower energy costs and often a price advantage in the market.

Mortgage (first and second)

The first mortgage reaches up to two thirds of the lending value and does not have to be amortised. Everything above that, up to a maximum of 80 per cent, is the second mortgage: it sometimes costs a small rate premium and must be repaid within 15 years or by retirement.

Mortgage lien (Grundpfand)

The bank's security over your land: if you don't pay the mortgage, it can realise the collateral. In practice, the lien is implemented via the mortgage note (Schuldbrief). → The mortgage note explained

Mortgage note (Schuldbrief)

The security paper, or register entry, that certifies a claim with your land pledged as collateral; the bank holds it as security for the mortgage. Creating one costs notary and land registry fees, which is why taking over existing mortgage notes pays off. → The mortgage note explained

Notarisation (öffentliche Beurkundung)

A contract for the purchase of land is only valid if a notary executes it as a public deed. Reservations and preliminary contracts without notarisation are therefore barely binding in law. Ownership then passes with the entry in the land registry.

Property gains tax (Grundstückgewinnsteuer)

A cantonal tax on the profit from selling a property, that is, on the difference between the sale proceeds and the investment costs. Short holding periods are penalised with surcharges, long ones rewarded with discounts. On inheritance, or when buying a replacement home, it is deferred, not waived.

Renovation fund

The joint savings account of a condominium owners' association for future renovations of the roof, facade, heating or lift. A well-filled fund is a sign of forward-looking management; an empty one means the next big bill lands directly on the owners. Its balance and contribution practice are in the minutes of the owners' meetings.

Reservation agreement

Barely: without notarisation there is no enforceable obligation to buy, for either side. Only pay a deposit if the contract clearly states that it is refunded in full if the sale falls through. Serious sellers accept that.

Right of first refusal and right of purchase

A right of first refusal allows the entitled person to step into the contract when a property is sold to a third party; co-owners have it by law. A right of purchase gives the right to acquire a plot within a deadline at an agreed price. Both can be noted in the land registry and so belong in the checks before the purchase.

Right of residence (Wohnrecht)

A personal easement to live in a property, non-transferable and usually lifelong. Unlike with a usufruct, the entitled person may not let the property. A registered right of residence lowers the market value considerably, because for that long the property is not freely usable.

SARON

The Swiss Average Rate Overnight, Switzerland's reference interest rate. A SARON mortgage costs SARON plus a bank margin of usually 0.5 to 1 per cent and moves with the market, usually with quarterly settlement. → Fixed or SARON

Second Homes Act

In municipalities where second homes make up more than 20 per cent, essentially no new second homes may be built. That affects many tourist resorts, tightens the supply there and supports the prices of existing apartments built under the old law.

Transfer tax (Handänderungssteuer)

A cantonal levy on the transfer of ownership, between 0 and over 3 per cent of the purchase price depending on the canton. Some cantons such as Zurich, Schwyz or Aargau have none; Bern grants owner-occupiers a tax-free allowance. → Purchase costs calculator

Usufruct (Nutzniessung)

The comprehensive right to use a property and keep its income, that is, to live in it yourself or let it. In return, the usufructuary bears maintenance, mortgage interest and taxes including the imputed rental value. Common with advances on inheritance: the parents transfer the house and keep the usufruct.

Short definitions based on standard Swiss practice, not legal or financial advice. Cantonal variations are possible.