We found the apartment of our dreams but need to first sell our house. A friend told us about “prêt relais”. Can you tell us something about it ? How is it a good solution ?

In this type of transaction it’s hard to know where to start. There are many people who synchronize their property search – and wait until they find it – before proceeding with the sale of their current  housing. And unfortunately, it often happens that the property they so desired to buy ended up being acquired by another client.

A « prêt relais » is proposed by the bank to remedy this problem. It enables one, in a very simple way, to purchase a property prior to the sale of one’s current residence.

The bank finances 60 to 80% of the new property’s price at an interest equal to current standard rates. The capital gets reimbursed the day the property is sold. To be noted, there is 12 to 24 month time limit during which you must have sold your first purchase.

Is it a good solution ? Naturally this represents a very advantageous solution. On the other hand the duration of the loan being limited, it is essential to correctly evaluate one’s property’s sales price, and entrusting the listing to the right real-estate professional can guaranty a sale within the allowed time limit. In case of non-sale, the bank has the right to request loan reimbursement at the contracted date.

I am interested in acquiring an apartment for sale on plan. The broker indicates to me that the mode of sale is the “property quota-share”. Can you explain what this is? What is the difference between this and sale on credit ?

First, it is important to know that the value of a real-estate property is calculated on two distinct bases. The first being the fiscal assessment value (land) and the second being the value of construction (living space structure).

In the case of a sale on credit, the buyer becomes owner of the property only when accepting the keys to the premises. He or she will pay a first installment (generally of 10% or 20%) during the closing of the sale and the balance when receiving the keys (called the requisition transfer). The assessment value of the living space structure are then included in this type of sale. In this case, the purchasing costs of 5% are calculated based on the total acquisition price.

In buying a property on plan via “quota-share”, the buyer directly becomes the owner at the closing of the sale. He pays a first amount (between 20% and 30% of total value) corresponding to the assessment value. In parallel, a contract is entered into with the general enterprise. The amount of the construction value will be disbursed, in installments via a construction loan obtained from his or her bank, during the length of construction and in function of its progress.  This method is attractive for the buyer since he or she only pays the purchase costs based on 5% of the assessment value.

How are taxes on real-estate gains calculated ?

You have recently sold your property and realized a benefit. This benefit is at this point taxable at the canton level.

To calculate this amount, two criteria are taken into consideration, the first being the amount of benefit and the second being the number of years the building was occupied.

The benefit consits of the sales price of the property from which is deducted the acquisition amount and the various expenses.

In terms of the number of years occupied, the tax is perceived according to a declining depreciation table going from 30 to 7%, knowing that the property’s years of occupation that can be proven count for double.

It is worth noting, that in the case of a sale followed by a new acquisition, it is possible to report a gain on a period from 12 to 18 months.

For more information, consult the followig links : Canton de Vaud - Canton du Valais - Canton de Genève - Canton de Fribourg - Canton de Neuchâtel.

What is the difference between an non-exclusive contract and an exclusive contract ?

Exclusive mandate :

Mandate where the real-estate agency has exclusivity. In this case, neither the owner him or herself, nor other intermediaries are authorized to proceed with the sale of the property concerned.

In general terms, the owner would be transmitting the interest of any prospective buyer directly to his or her broker, who will personally service the client (visits, advice, financing, etc.).

It consists of an advantageous mandate especially when the owner lacks the time to handle the commercialization of his or her property and wishes to assure a successful transaction alongside an experienced professional

Simple mandate (open non-exclusive listing) : :

Contract where several real estate agencies can be simultaneously mandated, and which also allows for a direct sale by the owner. Caution is made to avoid the involvement of too many players. The property tends to be perceived as less attractive when listed by too many professionals.

Worth mentioning too, is the existence of the semi- exclusive mandate, with its close similarities to the exclusive mandate.

The terms are identical concerning the exclusivity relative to other real-estate agencies or intermediaries. The difference lays in the owner option to handle him or herself the search for a buyer. In the case of a direct sale no commission is due the mandated agency.

What is LFAIE ?

LFAIE is the Swiss federal law applicable at the purchase of real-estate by persons residing abroad.

It established limits by a series of restrictions, to property acquisition by persons who do not benefit of a residence permit.

For more information, consult the documents made available by the Federal Office for Justice.

What are the common areas in a PPE ?

The common areas are the parts of the building lot which are shared to all or some of the property co-owners (areas relatively shared), namely:

  • the property
  • the bearing walls, tiles, exterior façade, roof, stair cases, elevators, courts, parks and gardens
  • laundry and bicycle storage rooms
  • the heating system (excluding the thermostatic valve)
  • electric and water lines (up to apartment diversions)
  • access paths and roads

Whereas private areas consist of: the lot itself (kitchen and bathroom appliances, doors, non-bearing walls, floor coverings, etc.)

Other elements are considered private, however with some restrictions. For example window shades are to be maintained by the co-owner in compliance with general conditions (type, color) established by the co-ownership.


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