Sole ownership, joint ownership or co-ownership: the question of ownership is just one of many issues that need to be clarified when purchasing property.

The key points in brief: 

  • As a couple, talk openly about your financial position before buying a house or an apartment.
  • Choose an ownership structure and set out your key decisions as a couple in a contract.
  • Also consider how compatible your future financial situation is with the purchase of your dream property.

The acquisition of real estate is one of the biggest financial decisions you will make in life. That is why it is all the more important to not only be clear about your desires and expectations, but also about the possibilities available to you. We show you what you need to bear in mind when purchasing a property in Switzerland and the key topics that couples should discuss beforehand.

Talk about money in your relationship

While discussing money in a relationship is not always easy, it is worth it. According to a study (see below), women who make long-time financial decisions jointly with their partners not only increase their chances of financial security but also have a more positive attitude towards the future. This is especially true when it comes to buying property. 

So take charge of your finances as a team, for example by drawing up a household budget. This will help you to determine together how much of your own funds you can put aside each month to ultimately be able to raise sufficient equity to finance the purchase of your own home.

Think about finances at an early stage

Whether married or not – a couple should start thinking early on about how to finance a house or an apartment.  This is because the purchase of residential property, whether as an investment or for personal use, entails long-term obligations to the bank as well as ongoing costs. 

Events such as a separation can put a couple with shared property in financial difficulty. Who should keep the home in such an event? And who will continue to contribute to the mortgage payments and the property’s maintenance? From a legal point of view, the entry in the land register is decisive in such cases. Without the necessary documents, it may be difficult to prove afterwards how much equity was contributed by each party and what was agreed in advance. 

What the study says: women and finance

According to the ۶Ƶ Investor Watch Report, while women consider long-term finances to be very important, many of them fail to address the subject. One common reason given is that “I think my spouse knows more about it than I do.” 

However, the ۶Ƶ Investor Watch Report also reveals that women who are involved in long-term financial decisions worry less about their financial future. Find out more about this interesting study.

Draw up a contract on key issues

Even if nobody hopes for this to happen – you should protect yourself against the possible consequences of a separation and clarify important issues with your partner at an early stage. One possibility is to conclude a marriage or concubinage contract. In this type of contract, individual provisions can be set out regarding income and assets. While the procedure is not mandatory, it allows a couple to choose between separation of property or community of property. In addition, binding regulations for succession planning or inheritance can also be put down in writing. As a “physical” property cannot simply be divided into parts, a clearly documented arrangement for the transfer of the house or apartment is important and prevents conflicts between the parties.

1. Decision on the form of ownership

If you buy a house or an apartment as a couple, you must decide on the form of ownership. Under Swiss law, there are three ways to acquire property:

  • Sole ownership: only one party contributes equity and is entered in the land register as the sole owner. As such, they can freely dispose of the residential property but also bear sole responsibility. If the property is the couple’s shared house or apartment, the home may not be sold without the consent of the partner.
  • Joint ownership: several parties contribute capital and the property belongs to all parties equally – regardless of how much equity someone has contributed. The owners can only dispose of the property jointly and it is not possible to sell individual shares.
  • Co-ownership: both partners contribute equity and are entered in the land register with their respective ownership quota. Each party is free to dispose of their share but also bears the obligations for it. If one co-owner wants to sell their share, the law grants the other co-owner(s) a right of first refusal.

The choice of the form of ownership depends on your financial possibilities as well as on the relationship with your partner. Most couples opt for co-ownership, as it offers less potential for conflict, for example, if the partnership is dissolved.

2. Actively address the issue of mortgages

When couples finance residential property together, they are jointly and severally liable to the bank for the mortgage. For double earners, in particular, this makes it easier to meet the bank’s requirements regarding equity and income. From the bank’s perspective, it is irrelevant which partner brings in more equity for the financing when it comes to arranging the mortgage.

The capital borrowed from the bank is usually divided into a first and second mortgage to finance a maximum of two-thirds and approximately 13 percent of the market value.  In addition, 20 percent must be contributed as equity. The second mortgage must be repaid within 15 years or by retirement at the latest in the case of older mortgage holders. Find out all you need to know about mortgage requirements, the different types of mortgage available, affordability, amortization and the options for extending, increasing or adjusting a mortgage in our Mortgage guide for female owners.

Keep an eye on affordability – even after you retire

Affordability is a key factor when obtaining a mortgage. It provides information on the relationships between the household income of the potential buyer and the ongoing costs of a home and its financing. When you retire and your income falls sharply, the framework conditions with respect to the mortgage’s affordability requirements change. When it comes to determining the maximum mortgage amount, the rule of thumb often quoted is that ongoing costs must not exceed more than one-third of the buyer’s household income. 

One way to ensure affordability even after retirement is to partially amortize the mortgage. Early planning makes sense in any case. Find out whether you can afford your dream property with the ۶Ƶ mortgage calculator.

Don't forget maintenance costs

In addition to the costs of amortization and mortgage interest, incidental and maintenance costs for the upkeep of your property should not be forgotten. These include charges for water, wastewater and refuse, insurance, property taxes depending on the canton as well as costs for hot water and energy, ongoing building maintenance, minor repairs and environmental maintenance. A total of between 0.7 percent and 1 percent of the purchase price should be reserved for incidental costs and the maintenance of the property. If a property is already somewhat older or is in poor condition, these costs may well be higher. It is therefore advisable to establish annual reserves. This financial buffer helps to avoid having to increase the mortgage when major maintenance work is due. 

Our tip: open an additional account for maintenance costs and make regular payments into it.

Finally, you should also keep the tax implications of home ownership in mind. In Switzerland, the imputed rental value (the equivalent of what you could potentially earn in rental income if you rented out the property) is taxed as income. In return, however, you can deduct debt interest, maintenance costs and expenditure for value-preserving conversions, for example. Taxes are also incurred in the event of a possible sale and can amount to a considerable proportion of the gain on sale.

Protect yourself against unforeseeable events

In the event of separation or divorce, disability or even the death of a partner, the dream of owning your own home can quickly come to an end. We would be happy to explain options for ensuring financial security. 

For married couples: if a couple gets divorced, the assets are divided according to the chosen matrimonial property regime, unless otherwise agreed in the marriage contract. 

For unmarried couples: if an unmarried couple buys a property together, it is advisable to conclude a  concubinage contract that determines what happens in the event of a separation. At the same time, as an unmarried couple, you should also consider the consequences of death and possible inheritance (including inheritance taxes).

There is no magic formula for purchasing and financing a property. Every couple should therefore try and find a solution that is tailored to their individual needs. Our experts would be happy to advise you on this. Register here for a non-binding consultation.

Women’s Wealth Academy

Women who participate actively in financial decisions increase their chances of financial security and worry less about their future.

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Because a personal conversation is worth a lot

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