Swiss Luxury Real Estate & HNWI Glossary

A

B residence permit

Law & permits

A renewable residence permit, valid for five years, for EU/EFTA citizens and third-country nationals who are employed or financially self-sufficient.

Required to establish a main residence in Switzerland. EU/EFTA citizens: typically straightforward if employed or financially self-sufficient. Non-EU/EFTA nationals: requirements vary by canton and typically require a high degree of financial self-sufficiency. Entitles the holder to acquire owner-occupied property without Lex Koller restrictions.

C residence permit (settlement permit)

Law & permits

A permanent settlement permit available after 5–10 years of uninterrupted residence in Switzerland.

For EU/EFTA citizens: typically available after 5 years. For non-EU/EFTA nationals: available after 10 years, subject to language proficiency and integration requirements. Treats EU/EFTA citizens and C permit holders like Swiss citizens when acquiring property (no Lex Koller restrictions).

Related terms: B residence permit · Lex Koller

L residence permit

Law & permits

A short-term residence permit for temporary stays, valid for up to one year and extendable to a maximum of 24 months.

Typically used for seasonal work or short-term projects. Does not entitle the holder to acquire property (subject to authorisation under Lex Koller).

Related terms: B residence permit · Lex Koller

B

Building zone

Law & permits

An area designated in the zoning plan where residential or commercial buildings may be built.

Swiss spatial planning law (RPG) distinguishes between building, agricultural and protected zones. Properties in a building zone can generally be developed; the floor area ratio and height restrictions govern density. Properties outside building zones are subject to strict restrictions.

Related terms: Heritage protection · Minergie

Lending value

Financing

The value a lender determines for mortgage underwriting. An 80% loan-to-value assumption is common for standard owner-occupied homes, but depends on the lender, property and borrower and is not a financing commitment.

Lenders apply their own valuation and credit policies within the applicable prudential and recognised self-regulatory framework. Loan-to-value limits may be lower for investment or special-purpose properties and must be confirmed for the individual case.

Related terms: Market Value · Affordability · FINMA standards

Authorization requirement (Lex Koller)

Law & permits

The requirement for foreign buyers to obtain authorization when acquiring Swiss real estate under the Federal Act on the Acquisition of Immovable Property by Persons Abroad (BewG).

Nationals of non-EU/EFTA countries are generally subject to the Lex Koller authorisation requirement. Resort municipalities have cantonal quotas; holiday homes are permitted but limited in number. A breach renders the purchase agreement void and may result in a penalty.

Related terms: Lex Koller · Resort status (Lex Koller) · B residence permit

Gross yield

Valuation & market

Annual rental income divided by market value, before property management, maintenance and financing costs.

A simplified performance metric. Typical gross yields for Swiss investment properties are 3–5% for residential and 4–6% for commercial properties. Yields in prime locations are often lower (2–3%) because of high property values.

Related terms: Net yield · Capitalization rate · Market Value

Federal tax (direct federal tax)

Taxation

Federal income tax, applied uniformly throughout Switzerland, with a maximum top rate of 11.5%.

The federal government does not levy a wealth tax. Direct federal income tax is progressive, with a top rate of 11.5% for very high incomes. Married couples are taxed jointly using income splitting.

Related terms: Cantonal tax · Municipal tax · Withholding tax

D

DTA (double taxation agreement)

Taxation

Bilateral agreements between countries to prevent double taxation. Switzerland has around 100 DTAs.

Important for international high-net-worth individuals. Real estate is generally taxed where it is located (in Switzerland for Swiss properties). On sale, Swiss real estate gains tax generally applies. Inheritance treatment depends on the applicable agreement — some countries, including Germany and Italy, have specific inheritance tax agreements with Switzerland.

DCF (discounted cash flow)

Valuation & market

A valuation method that discounts future rental income to its present value using a discount rate.

Standard practice for investment properties and institutional valuations. It accounts for rental growth, vacancy, management costs and residual value. The result is highly sensitive to the discount rate.

Related terms: Capitalization rate · Gross yield · Market Value

Heritage protection

Law & permits

Cantonal or municipal protection zones for historic buildings. Renovations and alterations require authorization.

A key consideration in heritage renovations. Modernisation must preserve the building’s character; energy-efficiency upgrades often require special permits. Cantonal tax relief may also be available.

Related terms: Building zone · Minergie · Minergie-A

E

Equity (mortgage)

Financing

The borrower’s own funds used for a purchase. A 20% equity assumption is common in standard owner-occupied mortgage models, but it is not a universal FINMA-prescribed threshold or a credit promise.

The amount and eligible sources of equity depend on the lender, property use, borrower profile and applicable recognised self-regulation. Pension assets may be subject to additional rules; the lender must confirm the structure for the specific case.

Related terms: Affordability · Pension fund advance withdrawal · Pillar 3a

Imputed rental value

Taxation

The imputed rental income from an owner-occupied property, which is taxed as income.

A feature of the Swiss tax system. The imputed rental value (60–70% of the market rent) is taxable income. Mortgage interest and maintenance costs are deductible in return. The system is politically contested, and reform has been discussed repeatedly.

Related terms: Real estate gains tax · Mortgage interest rate · Tax multiplier

Inheritance tax

Taxation

A tax governed primarily by cantonal rules; liability, exemptions and rates depend on the canton, relationship and, for real estate, the property’s location, and require case-specific professional review.

Tax liability, exemptions and rates depend on the canton, the relationship between the deceased and the beneficiary and, for real estate, the property’s location; cross-border circumstances may add further rules. The specific case should be reviewed by a qualified tax or legal professional.

Advance on inheritance

Law & permits

A gift made during a person’s lifetime to heirs entitled to inherit, which is taken into account when the estate is distributed.

A means of structuring an estate for inheritance tax purposes. In most cantons, an advance inheritance is subject to gift tax and is often taken into account when calculating compulsory shares. Any increase in the asset’s value after the gift is taxed to the recipient.

Related terms: Statutory entitlement · Gift tax · Inheritance tax

Renewal fund (condominium ownership)

Law & permits

A reserve fund that a condominium owners’ association may establish for major renovations; it is not generally mandatory under federal law.

Whether a renewal fund exists and how contributions are determined depends on the community regulations or a resolution of the condominium owners. Buyers should review the applicable rules, resolutions, fund balance and planned works for the specific property.

F

Family foundation

Taxation

A foundation structure in Liechtenstein or Switzerland for consolidating wealth across generations.

A structuring tool for family offices. A Liechtenstein foundation typically offers more flexibility, while a Swiss foundation offers greater regulatory clarity. It is recognised for tax purposes provided the arrangement is not abusive. Avoiding inheritance tax may be possible, but is complex.

Fixed-rate mortgage

Financing

A mortgage with a fixed interest rate and term, typically 2–15 years.

Provides cost certainty if interest rates fluctuate. Early termination may incur a break fee. High-net-worth individuals often use a multi-tranche strategy with a mix of terms.

Related terms: SARON mortgage · Variable-rate mortgage · Mortgage interest rate

FINMA standards

Financing

The prudential framework and recognised self-regulation relevant to mortgage lending; individual underwriting criteria remain subject to each lender’s credit policy.

Figures such as 20% equity, a 33% affordability ratio and 5% imputed interest are common bank or self-regulatory modelling assumptions, not universal FINMA-prescribed terms or a promise of credit. The lender determines the applicable equity, affordability and amortisation criteria for the individual case.

Related terms: Equity (mortgage) · Affordability · Lending value

G

GEAK (Swiss building energy certificate)

Construction & energy

The Swiss building energy certificate, which rates a building’s energy efficiency on a scale from A to G.

Required on sale in ZH, GE and some other cantons. GEAK Plus also includes renovation recommendations. Category A corresponds to the Minergie standard; F–G ratings are typical of buildings built before 1990 that have not been renovated.

Related terms: Minergie · Minergie-A · Energy-positive building

Municipal tax

Taxation

A municipal tax calculated as a multiple of the cantonal tax rate (the standard is 100% of the cantonal rate).

Rates vary widely: Feusisberg 55%, Wollerau 60% and Saanen 168%. A decisive factor when choosing a place of residence in the premium segment. Rates are low in Central Switzerland and higher in resort municipalities and city centres.

Related terms: Tax multiplier · Cantonal tax · Federal tax (direct federal tax)

Real estate gains tax

Taxation

A cantonal tax on gains from the sale of real estate. The amount depends on the period of ownership.

A longer ownership period reduces the rate (long-term ownership relief). A short ownership period may result in a surcharge. Important: GGS applies differently to private individuals than to self-employed persons (capital gain/business profit).

Related terms: Property transfer tax · Market Value · Imputed rental value

H

Property transfer tax

Taxation

A cantonal or municipal tax on property purchases, typically 1–3% of the purchase price.

The allocation between buyer and seller varies by canton. ZH has not levied real estate transfer tax since 2005. High rates: GE (3.3%) and VD (3.3%). A significant cost for premium property purchases.

Related terms: Real estate gains tax · Cantonal tax · Municipal tax

Hedonic valuation

Valuation & market

A statistical valuation model that estimates market value based on comparable properties and location characteristics.

A standard method for mortgage lending and indicative market valuations. IAZI and Wüest Partner are leading providers. Limitations: premium micro-locations are often undervalued; distinctive properties (heritage buildings, architectural icons) require DCF or asset-based valuation methods.

Related terms: DCF (discounted cash flow) · Market Value · Micro-location

Holding structure

Taxation

A holding company used to structure assets for tax purposes, benefiting from Switzerland’s holding company tax regime.

A Swiss holding company may receive participation income tax-free (participation relief). It can be combined with a foundation. Its use for real estate is limited: real estate holding companies do not benefit from holding relief on rental income.

Related terms: Family foundation · DTA (double taxation agreement) · Cantonal tax

Mortgage interest rate

Financing

The interest rate charged on mortgage financing, depending on the mortgage type, term and borrower’s creditworthiness.

Typical in 2026: SARON 1.5–2.0%, 5-year fixed-rate mortgage 1.8–2.3%, 10-year fixed-rate mortgage 2.0–2.5%. Mortgage interest is tax-deductible for an owner-occupied property. HNWIs often have room to negotiate premium terms.

Related terms: Fixed-rate mortgage · SARON mortgage · Variable-rate mortgage

I

IAZI

Valuation & market

A Swiss real estate index provider (Information and Training Centre for Real Estate).

A leading provider of Swiss real estate data and indices. Banks and institutional valuers use IAZI’s database of comparable properties. Individual reports are available for a fee (CHF 150–300).

Related terms: Wüest Partner · Hedonic valuation · Market Value

Indirect amortization

Financing

Repaying a mortgage through a Pillar 3a account or policy instead of making direct repayments, which can offer tax advantages.

The imputed rental value and mortgage interest remain deductible for longer. Pillar 3a contributions are also tax-deductible. When the funds are paid out at retirement, the mortgage is repaid using the Pillar 3a capital.

Related terms: Pillar 3a · Affordability · FINMA standards

K

Cantonal tax

Taxation

A cantonal tax on income and wealth. Rates and tax brackets vary considerably.

The Central Swiss cantons (ZG, NW, OW, SZ) have the lowest rates. Valais and Geneva have higher rates. Choosing a place of residence for tax optimisation is a legal and common strategy for HNWIs.

Related terms: Federal tax (direct federal tax) · Municipal tax · Tax multiplier

Capitalization rate

Valuation & market

The rate used to capitalize rental income when calculating a property’s market value.

Reflects risk (location, property type, leases) and market interest rates. Typical in 2026: 3.5–4.5% for residential property in a premium location, 4.5–5.5% for standard residential property, and 5.5–7% for commercial property. A lower capitalisation rate means a higher value.

Related terms: DCF (discounted cash flow) · Gross yield · Net yield

L

Lex Friedrich

Law & permits

The predecessor to Lex Koller, which regulated property acquisitions by persons abroad from 1985 to 1997.

Historical term. Current practice is based on the Federal Act on the Acquisition of Immovable Property by Persons Abroad (BewG, in force since 1997). Lex Koller is the colloquial name for its stricter enforcement.

Lex Koller

Law & permits

The Swiss federal law regulating the acquisition of real estate by persons abroad (BewG).

Non-EU/EFTA nationals require cantonal authorisation. EU/EFTA citizens with a B or C residence permit are generally exempt. Resort municipalities have quotas (St. Moritz, Verbier, Zermatt, Crans-Montana, Saanen). Breach = invalidity + penalty.

M

Macro-location

Valuation & market

The quality of a property’s location at the regional level (city, canton or region), a key factor in determining property prices.

The Gold Coast, Engadin, Saanenland and Lake Geneva are prime Swiss macro-locations. Factors: economic strength, infrastructure, tax environment and reputation. Accounts for 60–80% of market value.

Related terms: Micro-location · Market Value · Hedonic valuation

Micro-location

Valuation & market

The quality of a property’s location at the neighbourhood or street level within a municipality, a factor that distinguishes one property from another.

Within the same municipality, prime micro-locations can command a 50–100% premium over standard locations. Examples: Itschnach (Küsnacht), Suvretta (St. Moritz), Le Hameau (Verbier). Factors: hillside position, views, neighbourhood and traffic noise.

Related terms: Macro-location · Off-market · Hedonic valuation

Minergie

Construction & energy

A Swiss energy efficiency label for buildings, established in 1998.

Several levels: Minergie (standard), Minergie-P (passive house), Minergie-A (energy-positive). Some banks offer lower mortgage interest rates. Increasingly standard in the premium segment, especially for new builds.

Minergie-A

Construction & energy

The highest Minergie standard. The building generates more energy than it consumes, making it energy-positive.

Rare in existing buildings, common in premium new builds. Requires a PV system, high-quality insulation and a heat pump. Cantonal tax relief may apply (energy renovation deduction).

Co-ownership (fractional ownership)

Law & permits

A form of ownership in which each owner holds an ideal share of the entire property, unlike condominium ownership.

Unlike condominium ownership, it grants no exclusive rights to individual flats. Common for family properties and communities of heirs. The sale of a share often requires the co-owners’ consent.

N

Net yield

Valuation & market

Gross yield minus property management and maintenance costs, before financing costs and taxes.

A more realistic performance measure. Swiss rule of thumb: deduct 15–20% of gross rent for property management. Premium properties often have lower net yields because of higher management standards.

Related terms: Gross yield · Capitalization rate · DCF (discounted cash flow)

Usufruct

Law & permits

The right to use a property without owning it, often granted to a surviving spouse.

A testator can grant a spouse usufruct over a property by will while ownership passes to descendants. A tax-planning tool for intergenerational transfers. The imputed rental value is attributed to the usufructuary.

O

Off-market

Valuation & market

Marketing a property without a public listing, discreetly to a pool of pre-qualified buyers.

Common in the premium segment (CHF >5M). Beherzig Off-market Premium Index 2026 (proprietary indication, not independently verified): +18.5% premium over public sales. Benefits: discretion for sellers, early access for buyers and a scarcity premium.

Related terms: Pre-marketing · Premium index (Beherzig off-market) · Micro-location

P

Lump-sum taxation (expenditure-based taxation)

Taxation

A Swiss tax regime for foreign nationals who do not engage in gainful employment in Switzerland. Tax is based on their living expenses.

The federal minimum assessment base is CHF 435,000 for 2026; cantonal minima and calculation rules may be higher or otherwise differ. VS, GR, VD, TI, BE, LU, OW, NW, FR, JU and SG are selected comparison cantons, not a complete statement of availability. ZH, BS, SH and AR have abolished lump-sum taxation; in BL it is available only in the year of arrival through the end of that tax period. Eligibility and the applicable basis must be verified individually with the relevant cantonal authority.

Related terms: Federal tax (direct federal tax) · Cantonal tax · B residence permit

Statutory entitlement

Law & permits

The portion of an estate protected by law for beneficiaries entitled to a compulsory share, notably descendants and a surviving spouse or registered partner; parents have had no compulsory share since 2023.

Inheritance law reform (2023): the compulsory share for descendants was reduced from 3/4 to 1/2 of their statutory share. The spouse’s compulsory share remains unchanged (1/2). The parents’ compulsory share was abolished. This is relevant when planning lifetime advances on inheritance.

Related terms: Advance on inheritance · Inheritance tax · Usufruct

Energy-positive building

Construction & energy

A building that produces more energy than it consumes (a positive energy balance), meeting the Minergie-A standard.

An emerging standard in premium new-builds. Photovoltaic system + heat pump + high-performance insulation + smart energy management. Construction costs are ~5–10% higher than standard, but the sale price premium is often +10–15%.

Related terms: Minergie-A · Minergie · GEAK (Swiss building energy certificate)

Pre-marketing

Valuation & market

Marketing a property in advance to a selected pool of prospective buyers, ahead of a public listing.

A hybrid of an off-market and public sale. The property is first offered to pre-qualified prospective buyers and goes to public sale only if that is unsuccessful. An approach intended to reduce risk for sellers.

Related terms: Off-market · Premium index (Beherzig off-market)

Premium index (Beherzig off-market)

Valuation & market

Beherzig’s own indication of the off-market premium compared with publicly listed comparable properties; not independently verified.

As of 2026: +18.5% (BOMPI). Beherzig’s own indication, not independently verified; derived from comparison with published comparable properties, not from analysis of a proprietary transaction database. Estimated components: discretion premium 8–12%, scarcity premium 15–25%, pre-qualification premium 5–10%.

Related terms: Off-market · Micro-location · Market Value

Q

Withholding tax

Taxation

Tax deducted directly at the source of income, commonly applied to holders of a B residence permit.

Foreign nationals with a B residence permit are subject to withholding tax. Holders of a C permit and EU/EFTA nationals resident in Switzerland are taxed under the ordinary assessment procedure. For assets > CHF 150k, a subsequent ordinary assessment may be possible. Relevant to the application of double taxation agreements.

R

Intrinsic value

Valuation & market

A valuation method based on the cost of a new building plus land value, less depreciation due to age.

One of the three main Swiss valuation methods, alongside market/hedonic value and income value/DCF. Often combined with market value for owner-occupied single-family homes. In premium locations, land value dominates, making intrinsic value less relevant.

Related terms: Market Value · Hedonic valuation · DCF (discounted cash flow)

Resort status (Lex Koller)

Law & permits

A status granted to tourist municipalities that allows limited property purchases by foreign nationals under a cantonal quota.

Resort municipalities in VS (Verbier, Crans-Montana, Zermatt, Saas-Fee), GR (St. Moritz, Davos, Klosters, Lenzerheide, Arosa) and BE (Saanen/Gstaad). Cantonal quotas are set annually; in 2026, >90% of the quotas in VS and GR had been used.

Related terms: Lex Koller · Authorization requirement (Lex Koller) · Off-market

S

Renovation requirements

Construction & energy

The estimated cost of necessary modernization, a key consideration when valuing existing properties.

For properties >25 years old, a comprehensive renovation typically costs 15–30% of the replacement cost. Energy-efficiency upgrades alone cost 8–15%. Listed properties in protected areas often require substantially greater expenditure.

SARON mortgage

Financing

A variable-rate mortgage based on SARON (Swiss Average Rate Overnight), consisting of a money market rate plus a margin.

Replaced LIBOR in 2022. The interest rate fluctuates with the money market; in 2026, it is typically 1.5–2.0% (SARON 1.0% + margin 0.5–1%). Offers the lowest mortgage rates, but carries interest-rate risk. Suitable for borrowers with risk tolerance and a short time horizon.

Pillar 3a

Financing

Tax-advantaged private pension provision, which can be used toward mortgage equity or amortization.

Maximum annual contribution in 2026: CHF 7'258 (employed persons with an occupational pension fund), CHF 36'288 (without one). Withdrawals may be taxed at a reduced rate. A popular way to fund indirect amortisation.

Gift tax

Taxation

A cantonal tax on transfers of assets made during a person’s lifetime, usually similar to inheritance tax.

Exempt for direct descendants in most cantons. An advance inheritance is a gift that is taken into account when calculating compulsory shares. Important: in some cantons, a gift made within five years before death may be brought back into the inheritance tax calculation.

Related terms: Inheritance tax · Advance on inheritance · Statutory entitlement

Tax multiplier

Taxation

A multiple of the cantonal tax rate (100% equals the cantonal rate) that determines the effective tax burden in each municipality.

A key location factor when choosing a place of residence in the HNWI segment. Premium examples for 2026: Feusisberg (SZ) 55%, Wollerau (SZ) 60%, Zug (ZG) 60%, Saanen (BE) 168%, Verbier (VS) 142%, Cologny (GE) 32%.

Related terms: Federal tax (direct federal tax) · Cantonal tax · Municipal tax

Condominium ownership (STWE)

Law & permits

A Swiss form of apartment ownership that includes exclusive rights to individual units, established by law in 1965.

The most common form of apartment ownership. Exclusive rights to one's own apartment plus co-ownership of shared areas. The condominium owners' meeting (STWEV) makes decisions on shared matters. A reserve fund is mandatory.

T

Affordability

Financing

A lender’s assessment of housing costs relative to sustainable income and assets. A 33% ratio is a common modelling benchmark, not a universal FINMA-prescribed maximum or credit promise.

Banks commonly model affordability using an imputed interest rate around 5%, ancillary costs and amortisation, but assumptions and treatment of income and assets vary by lender, borrower and property. The specific credit decision and terms require individual lender review.

Related terms: FINMA standards · Equity (mortgage) · Lending value

V

Variable-rate mortgage

Financing

A mortgage with an interest rate that can be terminated at any time. It offers flexibility but has higher rates than a fixed-rate mortgage.

A traditional form before the introduction of SARON; now uncommon. Interest is typically 0.5–1% above SARON. Used for very short time horizons or as a small tranche in a multi-tranche mortgage.

Related terms: SARON mortgage · Fixed-rate mortgage · Mortgage interest rate

Market Value

Valuation & market

The current market value of a property, used as a basis for valuation, mortgages and taxes.

In the premium segment, value is rarely measured on a linear basis — off-market premiums, micro-location premiums and property-specific characteristics call for expert valuation. Hedonic models provide an initial indication, not a definitive valuation.

Related terms: Hedonic valuation · DCF (discounted cash flow) · Intrinsic value · Off-market

Wealth tax

Taxation

A cantonal tax on net wealth. There is no federal wealth tax.

Switzerland is one of the few OECD countries with a wealth tax. Rates are typically 0.1–0.8% of net wealth. Rates are low in the central Swiss cantons and higher in Geneva and Vaud. HNWI planning levers include choice of residence and foundation or holding structures.

Pension fund advance withdrawal

Financing

An early withdrawal of occupational pension (BVG) funds to finance owner-occupied residential property, permitted every five years.

An important source of equity for employed persons. Conditions: owner-occupied, at least a 50% ownership share, and before retirement (with reduced pension cover). Tax-disadvantageous: the withdrawal is taxed, and insurance cover is reduced.

Related terms: Pillar 3a · Equity (mortgage) · Affordability

W

Wüest Partner

Valuation & market

A Swiss real estate consultancy and data provider, known for institutional property valuations.

A competitor to IAZI in real estate data. Wüest indices are used by banks, insurers and occupational pension funds. Neighbourhood analyses cover premium micro-locations. Individual reports and licensed data are available for a fee.

Related terms: IAZI · Hedonic valuation · Micro-location

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