Real Estate Due Diligence in Switzerland

Real Estate Due Diligence in Switzerland
Anna Ledenyova

Real estate transactions in Switzerland

Due diligence is the process of analysing the prospective property in which an investor intends to purchase, to determine the state of the property as well as whether there are any other liabilities which come from purchasing the property. Additionally, a market check should be conducted to ensure the list price is at a fair market value.

This due diligence process is vital for any investors and business developers who are trying to reduce the risks with buying a property in Switzerland as well as for those who are adamant on being sold a property at a fair list price.

You can speak to our consultants about this topic for more information or any assistance with due diligence procedures prior to purchasing a Swiss property.

The real estate due diligence process

The entire due diligence procedure takes a few steps but covered a number of different legal areas, most of which focus on taxation, building safety and other environmental factors along with the market price. We've listed due diligence steps below:

  • Legal property due diligence: checks for previous sales agreements along with rent and lease agreements
  • Taxation due diligence: profit taxes along with inheritance and other corporate taxes if the buyer is a company in Switzerland
  • Construction and Safety: analysis of building plans and codes to obtain an official approval for the building's current state as well as determine any repairs which need to be implemented. On top of that, an inspection of electrical cabling, etc.
  • Environmental due diligence: analysing pollution output and risks, determining the state of the piping as well as water supply and electricity use, even if the building is vacant.
  • Financial due diligence checks: planning and determine future resale values as well as the current expenses the building or property will require.
By merging all of the steps above together and running through the procedure business owners and investors will be able to gain a rather thorough analysis of the buildings state. All of the due diligence procedures are a means of determining how well the building or property will work for a particular business, as well as whether it will become a profitable asset or a loss-causing one.

The Swiss real estate market

There are countless different property types available in all cities across Switzerland and accompanied by the nations outstanding quality of life and popularity amongst travellers, Switzerland presents a very profitable real estate market.

Normally investors and business owners purchase Swiss property simply for business operations, despite the fact the properties are in some of the worlds most desirable locations. For those who are interested in finding out more sales and purchase information of properties in Switzerland, there is a Land Register which offers information on owners and locations of properties as well as other geological information.

If with the above information, you have more questions about purchasing a property or business or investing in one in Switzerland, you should feel free to contact one of our business consultants for more in-depth information.

Check SwissFirma guide Necessary equipment for a Swiss print shop.