It is difficult to compare the true value or costs of the purchase internationally because local taxes, agents fees and other charges can alter holding costs dramatically. We have therefore compared the three major Alpine markets on a like-for-like basis in order to illustrate what the total costs of ownership and disposal might be over a period of five years.

In all these markets, agency fees are paid by the vendor; these range from around 3% in Austria, to 6% in France. The buyer may also make a contribution in Austria.

Total costs are lowest in Switzerland, which is characterised by low transfer taxes and notaires fees (just 1.5% and 1.2% of property value respectively in our scenario in Figure 8). Occupation costs stand at 1% of the rateable value, while some capital gains taxes are payable on sales profit. Costs may be low in Switzerland, but entry to the market is restrictive. Switzerland issues just 1,500 permits per year for foreign buyers to buy property, of which 330 are allocated to Valais, and 290 in Graubünden, two cantons hosting the bulk of Alpine resorts.

Click on Figure 8 to enlarge

In France, there is a big difference in acquisition costs of a new and old property. Transfer taxes, coupled with notaires fees (totalling 7% of property value) add significantly to purchase costs for second hand homes. New properties in France attract far lower associated purchase costs (notaires fees of around 3%), in a bid to stimulate the development market. When selling a property in France, every non-resident has to pay ‘social charges’ of 15.5% on top of the capital gain tax which differ depending on the seller’s nationality.

In Austria, purchase costs are high (totalling 13% of property value, including notaires fees), but offset by lower agency fees (around 3%). Capital gains taxes of 25% on sales profit apply.

Taken from
Spotlight: Alpine Property Market 2014-15