Property Prices in Switzerland: What Does Building Land Cost?

Find the most important information for anyone looking to buy residential property in Switzerland in this guide.

What does building land in Switzerland cost?

Switzerland may be a small country, but it is very diverse in terms of geography and politics. Although land prices are relatively high right throughout the country, prices vary broadly between regions. A square meter of building land in the most sought-after locations can cost many times more than the same amount of land in the cheapest regions.

Table 1 compares the median prices of fully developed, vacant building land which is licensed for single family homes (low floor area ratio) in all Swiss cantons in the second quarter of 2021. The table uses data from real estate services provider Wüest Partner.

Table 1: Median prices for building land (2021)

Source: Wüest Partner

The cost of land for single family homes is highest in the cantons of Zug and Basel-Stadt, as the figures show. In 2021, prices averaged 4260 francs per square meter in the canton of Zug, and 3370 francs in Basel-Stadt.

At 150 francs per square meter, Jura has the lowest average price for building land, by a wide margin. It is followed by Solothurn and Glarus, at 550 and 560 francs per square meter respectively. So the average price of a square meter of building land is 28 times higher in the most expensive canton than in the cheapest.

Is property in Switzerland a good investment?

Swiss real estate prices are relatively high. But demand for rental properties is also high, especially around major metropolitan centers like Basel, Geneva, and Zurich. Historically, the growing demand has steadily driven up the prices of real estate. The ongoing strength of the Swiss franc against other currencies has been another contributing factor, as it has created demand from investors who use Swiss real estate to protect wealth from inflation.  

The ratio of rental income to property prices is lower in Switzerland than in some other countries. But steady demand and the stability of the Swiss franc can make Swiss real estate a good investment, in many cases.

You should be aware, though, that Swiss laws tend to favor renters, and that the costs of maintaining and renovating properties in Switzerland are high. It is also important to understand that income earned by renting out Swiss properties will remain taxable in Switzerland, even if you move abroad. You can find more information about renting out properties in the guide to investment real estate in Switzerland.

How have Swiss real estate prices developed?

The biggest advantage of Swiss real estate is that, at least historically, demand for living space has remained high. This has continued to drive property prices up. In the cantons of Appenzell-Innerrhoden, Glarus, and St. Gallen, for example, the average cost of building land with a low floor area ratio has more than quadrupled since 2007. All cantons have seen increases in average prices between the first quarter of 2007 and the second quarter of 2021 (see table 2).

Table 2: Changes in the price per square meter for Swiss building land

Source: Wüest Partner

Average price changes in specific municipalities can be much higher or somewhat lower than the cantonal average. In highly sought-after areas and metropolises, in particular, price changes may be substantially larger.

Which taxes apply when I buy Swiss property?

You should be aware that most cantons and municipalities charge capital gains tax on your profits when you sell a property for a higher price than you paid for it. This tax varies broadly between cantons. If you plan to buy a property as an investment with the hope of selling it at a profit in the future, then it is worth looking at the property capital gains taxes in the municipality where the property is located.

Many cantons also charge a property transfer tax, and practically all municipalities charge notary fees. Normally, the cost of notary fees is split between the buyer and seller.

On top of those taxes, most cantons and many municipalities levy property tax and/or wealth tax. When you own a property in Switzerland, you are subject to certain Swiss taxes, even when you do not live in Switzerland. There are seven cantons which do not charge any property tax: Aargau, Basel-Landschaft, Glarus, Schwyz, Solothurn, Zug, and Zurich.

What possible risks should I pay attention to when buying property in Switzerland?

If you plan to buy building land and construct your own home, be aware that connecting a plot to water, sewage, power, telecom, and road networks costs money. In some cases, the total cost of these connections can run into tens of thousands of francs. If you are seriously considering buy a plot and building a new home or reconstructing a disused building, it can be worth requesting quotes from relevant municipal and/or private utilities providers to get an idea of the costs.

Be cautious with leaseholds. It is not uncommon for property in Switzerland to be sold under leasehold agreements, as opposed to freehold ownership. A leasehold only gives you the right to use and build on a plot of land. You own the buildings, but not the land underneath them. In exchange for the use of the land, you pay ongoing ground rent to the land’s owner. In expensive locations, the ground rent rates can easily be as high as 1000 francs per month. In contrast to some other countries, Swiss leasehold agreements are limited to a specific contract term (minimum 30 years, maximum 100 years). Because leaseholds are present in the Swiss real estate market, it is important to understand Swiss property contracts when buying property as an investment. Only freehold properties have the potential to gain value when land prices go up.

More on this topic:
Rent or buy? A basic guide
Calculator: Rent or buy
Investment properties in Switzerland: A basic guide