Switzerland’s benign tax regime has long made it a favourite with pop stars
and racing drivers, but these days its appeal is growing for members of
Britain’s financial community, keen to avoid the 50% tax rate due next
April, and other future blows to their wallets. Monaco and the Cayman
Islands are more glamorous, and Gibraltar has the lowest corporate tax in
Europe, but convenience and lifestyle play a big part in Switzerland’s
appeal — a factor stressed by the country’s authorities, who have been
trying to persuade the chief executives of FTSE 100 companies to relocate.
“Switzerland is an accessible location in the centre of Europe, with a stable
economy, and a good selection of schools and housing,” says Andrew Langton,
chairman of Aylesford International (020 7349 5100, www.aylesford.co.uk),
one of several high-end London estate agencies running seminars for those
considering the move. “You’re more likely to find what you want there than
in any other tax haven.” Don’t underestimate the culture shock, however,
especially in German-speaking cantons such as Zurich or Zug.
The rules on buying are also complicated. In areas such as Zurich and Geneva,
which are deemed “nontouristic” and are of most interest to fiscal émigrés,
foreigners must gain residency before they can buy — which normally requires
a contract of employment or proof of sufficient wealth. You don’t have to be
a resident to buy in tourist areas, including most (but not all) ski
resorts, but non-residents can buy only one property, of up to 200 sq
metres. “Each of the 26 cantons has its own rules, and they keep changing,”
says Jeremy Rollason, managing director of Savills Alpine Homes (020 7016
3740, alpinehomesintl.com).
Wherever you buy, it won’t be cheap, especially with the pound having lost
more than 20% of its value against the Swiss franc over the past year. On
the plus side, Swiss mortgages are cheap and residents need only a 20%
deposit (non-residents have to come up with 40%).
GENEVA Most Swiss-bound Britons head for cosmopolitan, French-speaking
Geneva (almost half of the 185,000 residents are expats) or the towns and
villages along the northern shore of Lake Geneva. Yet housing is expensive
and in short supply because of the influx of relocating foreigners: Savills
International estimates that there are only 200 rental properties in Geneva
on offer at any one time. If you want to buy — and are a resident —
two-bedroom flats are most popular, with prices ranging from £850,000 to
£1.2m.
The market is also booming in Lausanne, capital of neighbouring Vaud canton.
“One agent told me it isn’t uncommon to have 100 people view an ordinary
one-bedroom flat in a day,” says George Preston, 24, an IT consultant
working for a multinational firm who is staying with friends in the city
while he finds somewhere to live. The paperwork is arduous, but there are
advantages: Preston reckons his gross salary is 25% more than at home, and
income tax, which varies from canton to canton, is a flat 20% — much lower
than in Geneva.
Indeed, to benefit from lower taxes, many expats work in Geneva, but live in
either Vaud (home to Phil Collins) or Valais, to the south (residents
include Roger Moore).
“People play the system the best way they can — they buy ski chalets they
claim as their primary residence, then rent a flat in Geneva, where they
work and live during the week,” says Tony Walker, 41, an energy trader, who
moved to Geneva from Richmond, in southwest London, six months ago. He rents
a large house in a village 15 minutes outside Geneva for £3,600 a month with
his wife, Suzi, 39, who works for the Italian property firm Ultissimo, and
their son Max, 3. The family have just bought a two-bedroom chalet in
Verbier for £611,000 as a weekend and summer home.
“We are surrounded by vineyards and can see Mont Blanc from our garden,”
Walker says. Tax is not as low as you might think, at 26%, and once
deductions for pension and compulsory medical insurance are taken into
account,it works out at about 35%, he estimates.
Moving eastwards into Vaud, through small lakeside towns such as Morges and
Nyon, and on to Vevey and Montreux, it becomes possible for non-residents to
buy. Hannah Coppersmith, a director at Pure International who is dealing
with 10 “serious” UK clients looking to relocate, has new lakeside flats
near Lausanne from £1.4m; and a six-bedroom, 18th-century country house
overlooking the lake near Montreux, with planning permission for another
three-storey building, for £2.13m (020 3031 2860, www.pureintl.com).
ZURICH With lower tax rates than Geneva (13%-25%), German-speaking
Zurich is Switzerland’s largest city, as well as its financial capital, and
is within easy reach of ski resorts such as Klosters, Davos and Flims.
Only residents can buy, but “most vendors will allow you to rent the property
while your permit is being sorted out”, says Mark Harvey, of Knight Frank’s
international department, which is marketing off-plan flats in the Mobimo
Tower, a 24-floor block in the west of the city, inspired by 1900s Chicago
skyscrapers and with views across Lake Zurich. Prices start at £1.28m for a
127 sq metre one-bedder. The agency also has a new detached family house
with four bedrooms for sale in the village of Zollikon, just outside Zurich,
from £2.7m (020 7629 8171, knightfrank.com/switzerland).
Aylesford International is marketing the Peninsula Beach House, a
development of 23 contemporary flats of about 200 sq metres each on Lake
Zurich. Prices start at £1.43m.
In the tiny canton of Zug, only 45 minutes south of Zurich airport, and home
to Boris Becker, income tax is the lowest in Switzerland — just 10% on
average. The quality of life is constantly rated among the best in the
country, and it has international schools and a growing foreign community,
catered for by the English-language website Zug4you.ch.
“Rents are high by Swiss standards, because they compensate for low taxes, but
people from London tell me prices seem reasonable,” says Natalie Albrecht,
of Lifestyle Managers (lifestylemanagers.ch),
a local firm that offers relocation services. Flats in the centre of Zug
rent for £4,000 a month. A similar home would start at £600,000 through
Engel & Völkers (www.engelvoelkers.ch/zug).
Families tend to prefer houses with gardens in nearby areas such as Ageri or
Walchwil (which has the lowest taxes in the canton), with rents starting at
£3,000 a month and sale prices at £1m.
TICINO The Italian-speaking canton of Ticino has a far smaller
financial centre than Zurich or Geneva, but more than makes up for this with
its beautiful scenery and Latin spirit. What’s more, Milan’s shops,
galleries and airport are close by. Property prices in the lakeside towns of
Lugano and Locarno are lower than in Zurich or Geneva, and non-residents can
buy anywhere — although the maximum 200 sq metre rule applies here, too.
“Due to increased demand for property, you need to wait about nine months
for a residency permit,” Coppersmith says. “But it is quicker than in the
Valais or Vaud cantons — and income and wealth taxes are lower in Ticino,
too." The waterfront villas on Lake Lugano can fetch millions and have
a devoted following among wealthy Swiss, Germans, Italians and,
increasingly, Russians. Local agents are also talking up rumours that George
Clooney might be planning to sell his home on Lake Como and buy on Maggiore,
the northern tip of which lies in Switzerland.
Wetag Consulting, a specialist in high-end properties, has a modern
five-bedroom lakeside house in Bissone for £2.86m; cheaper homes inland,
still with views of the lake, include a four-bedroom 18th-century house in
Bigorio, 20 minutes from Lugano, for £676,000 (00 41 091 751 3106, wetag.ch).
In Orselina, above Lugano and overlooking Lake Maggiore, Pure International
has flats in the new Residenza San Michele from £335,000.
“We are seeing a lot of interest in Ticino from people who want to take
residency in Switzerland and work in Italy — which, tax-wise, is still
beneficial to them — and from British families seeking to move,”
Coppersmith says. “Interest in Switzerland has certainly switched from
holiday homes to relocation.”
More hideaways for the tax-averse
If Switzerland isn’t for you, but you are determined to cut your tax bill,
what about Dubai? Prices have tumbled, so you can buy a three-bedroom
flat for the price of a two-bedder two years ago. Dubai is tax-free, but
there is a land-registry fee of 1-2%. Gibraltar has no capital gains
tax, estate duty or inheritance tax. To obtain residency, you need to apply
for a Qualifying Certificate, which makes you liable to income tax on the
first £50,000 of assessable income. Most of the properties available are
flats, and prices range from £250,000 to £3m. The bankers’ haven of the Cayman
Islands, in the Caribbean, has two-bedroom beachfront villas from
£300,000. The British territory is tax-free, but you’ll pay 7.5% stamp duty
on Grand Cayman, with lower rates on the two smaller islands. There is no
income tax in Monaco, but prices are steep — most flats cost
£6m-£12m. More affordable tax havens can be found closer to home. In Jersey,
which has zero capital gains, wealth and inheritance taxes, you can buy a
studio flat for as little as £100,000, but anyone who isn’t a high-net-worth
individual must be employed on the island in order to live there.
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