SWITZERLAND Law and Practice Contributed by: Francis Nordmann, Johannes Bürgi, Christian Eichenberger and André Kuhn, Walder Wyss Ltd
The rates range between 1% and 3.3%. It is not uncommon for the parties to contractually agree to share the transfer tax. In some cantons, there is no real estate transfer tax in share deals. Also, corporate restructurings (including of real estate companies) do not gen - erally trigger transfer taxes and similar charg - es. Further exceptions are regulated in Article 12(3) of the Federal Act on the Harmonisation of Direct Taxation at Cantonal and Communal Levels. Most cantons that impose real estate transfer tax can secure their corresponding tax receivables by a first-ranking legal lien on the real estate. In addition, the transfer of real estate is subject to cantonal and/or municipal land reg - istry and notary fees. 2.11 Legal Restrictions on Foreign Investors Foreign ownership of residential real estate and, to some extent, land reserves is restricted by the Lex Koller. In the case of an infringement, the transaction can be deemed void, which can even lead to criminal sanctions. Transactions that have a similar effect to ownership should be examined on a case-by-case basis, as the Lex Koller governs not only the mere ownership of residential real estate, but also aspects such as financing, long leases, etc. Exceptions exist for holiday apartments, serviced apartments, inherited real estate, etc. If there is any doubt, rulings from the competent Lex Koller authorities are sought for confirmation and legal certainty.
insurance companies) invest and hold significant real estate portfolios that are financed without external financing, other investors typically finance through a mix of equity and external funding sources (secured term loans, sometimes revolving loans, development financings). Tradi - tionally, Swiss banks have held the lion’s share of the domestic real estate financing market, but new refinancing methods may make it more attractive for foreign banking and non-banking lenders to re-enter the market – eg, following international investors. 3.2 Typical Security Created by Commercial Investors A typical security package would consist of a security interest in mortgage notes ( Schuld- briefe ), which can take the form of mortgage notes in paper form ( Papierschuldbriefe ) or reg - istered mortgage notes ( Registerschuldbriefe ). In addition, rent, insurance claims and other receivables are typically pledged or assigned for security purposes. Pledges over the shares of the borrower and security interest in bank accounts are customary. 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders There are no restrictions on granting security to foreign lenders with respect to Swiss commer - cial real estate financing transactions, nor are there any regulatory restrictions on cross-border lending in general. The financing of residential real estate by foreign lenders will have to be ana - lysed carefully under the applicable Lex Koller legislation restricting the acquisition of residen - tial real estate in Switzerland by foreigners. However, financing structures typical in the Swiss residential mortgage market (standard security package, standard terms of the loan
3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate
While Swiss and foreign institutional investors (eg, pension funds, sovereign wealth funds and
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