The benefits of living in Switzerland aren’t just about taxes.
Long known as a favorable tax environment, the picturesque country’s other draws—namely its strong education system, high safety ratings and superior quality of life—are now increasingly considered of equal importance for wealthy international home buyers, according to a report Tuesday from Knight Frank, a global real estate consultancy.
"Where its favorable tax environment was once the main draw for wealthy overseas investors, in the last five years we have seen Switzerland start to appeal far more as a safe haven for personal and economic security," said Alexander Koch de Gooreynd, a Knight Frank partner, in a statement. "Tax still matters, but there are now factors of equal importance involved in buyers’ decisions."
Purchasing real estate in Switzerland as a foreigner comes with a variety of restrictions, with different treatment for residents and non-residents—and whether the home purchase is for vacation or permanent relocation.
According to Knight Frank, wealthy international buyers continue to see the purchase of real estate in the country as a safe investment, especially in the midst of Brexit negotiations in the U.K. and changing political climates in other parts of Europe, the U.S. and elsewhere.
"This is a country whose property market on the whole, resists great rises and falls, but which provides a stable environment for people to safeguard their assets," Mr. Koch de Gooreynd wrotes in the report.
There's waterfront and then there's WATERFRONT.
A historic Swiss chateau hits the auction block next month https://t.co/BB9FjPQGYg pic.twitter.com/iodyzUIHb1 — Mansion Global (@MansionGlobal) May 12, 2017
While the country has recently amended its banking rules, for increased transparency, residents of Switzerland may continue to see their banking investments largely kept private.
But according to the report, low taxes and privacy in banking are no longer the only driving factors for wealthy international buyers looking at relocating to Switzerland.
Buyers considered ultra-high-net-worth individuals—with a net worth of $30 million or more—surveyed by Knight Frank deemed lifestyle and personal security as the most important factors when deciding on where to live.
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And Switzerland, according to a study by global human resources consulting firm Mercer cited in the report, is ranked one of the safest countries in the world. Three of its cities—Zurich, Geneva and Basel—also made Mercer’s top-10 rankings for highest quality of life across the globe in 2017. The country’s education system, which has some of the highest number of international students, is also considered a strength for buyers, according to the report.
Buying in Switzerland, which uses the Swiss franc, not euros, is still seen as a stable move for portfolio diversification. "Some investors see exposure to the Franc as a means of spreading risk," the report says.
The high-end permanent resident market in Geneva has been particularly strong, the report says, with homes in the CHF 4 million to CHF 20 million [US$41 million to US$21 million] increasing 17% from 2015 to 2016, with a total of 96 sales.
Mr. Koch de Gooreynd predicted that the country, long a relocation destination for Germans, Italians and the French, may see a greater influx from Britain.