Examination of the land register extract
Before you buy a property, you should consult the land register extract. This contains important legal information, such as:
- Owner: Who is the legal owner of the property? Is the seller authorised to sell the property?
- Encumbrances and restrictions: Are there any easements, mortgages or rights of first refusal that could affect the purchase or use of the property?
- Zone and development plan: Is the property suitable for the planned use (e.g. building a house)? The development plan provides information on whether your project is legally permissible
Purchase agreement – careful examination necessary
The purchase contract must be checked carefully. Pay attention to:
- Contract conditions: Are the price, payment terms and handover date correctly recorded?
- Cancellation rights: Is it possible to withdraw from the contract if unexpected legal problems arise?
- Liability: How are the warranty rights organised?
Tax aspects of buying a property
When buying a property, there are also tax issues that you should consider in good time:
- Transfer tax: In many cantons, transfer tax is payable on the purchase of a property. The transfer tax is usually borne by the buyer. If it is agreed that the seller bears the transfer tax, it must be taken into account that this is a proportion of the purchase price and that tax is also payable on it. The transfer tax varies from canton to canton and must be included in your financial planning.
- Property gains tax: If you later sell the property and realise a profit, you may be liable for property gains tax. Seek advice in advance as to how high this tax is. The property gains tax can be reduced by claiming value-enhancing investments and costs associated with the sale, such as land registry and notary fees and estate agent commissions. Property gains tax also varies from canton to canton.
Liability risks
Buying a property also harbours liability risks. Hidden defects or legal encumbrances on the property can lead to later disputes. A frequent cause of conflicts are third-party rights that restrict the use of the property. It is therefore crucial that you thoroughly check the contract and all relevant legal documents. The relevant documents can also be inspected at the land register.
The role of the notary
The notary prepares the contract for the property transfer and represents the interests of all parties. In Switzerland, the purchase of land is only legally valid if the contract is notarised by a notary. The notary ensures that the contract fulfils the legal requirements. The notary therefore assumes a neutral position. The notary can be asked for advice on various issues. For example, the notary will assist with the clearing of easements, the transfer of mortgages or the cancellation of notes such as a restriction on sale due to an advance withdrawal from a pension fund. Finally, the notary notarises the purchase contract and submits it to the land registry.
Conclusion
Buying a property is a significant investment. Careful legal examination of the extract from the land register, the purchase contract and the tax aspects, as well as the support of an experienced notary, will enable you to minimise legal risks and invest securely in your property.
Our notaries will be happy to provide you with legal advice on buying a property.