Property prices tumble in Geneva
The value of a property in the Swiss city of Geneva has plunged, making now an excellent time for expats to consider buying.
Wealthy expats are often drawn to Switzerland thanks to a 150-year old tax break that allows the rich to massively reduce their tax and income exposure. This tax break however is now under doubt causing many wealthy expats to hold off from buying in the city.
The system allows foreign nationals to pay a flat fee or forfeit to the local canton. It is worked out based on the rental value of their property rather than their income or assets and is paid in lieu of ordinary wealth and income taxes. Ordinary federal and cantonal tax rates are applied to the rental value and there is no obligation on forfeit holders to declare worldwide income or assets
The tax break is under threat from annoyed locals that have complained about the number of wealthy foreigners living in the country. The Geneva government has so far rejected the calls to abolish the tax break but still remains under heavy pressure to do so.
Alex Koch de Gooreynd, head of estate agent Knight Frank’s Swiss residential team, said: “This indecision is killing the market. It’s the concern that things might be about to change.”
Over the past year properties in Geneva worth more than 6 million Francs (£4.2million) have tumbled by as much as 25%. Along with the threat of axing tax breaks, Switzerland has also been clamping down on tax evaders who hide their assets away in secretive Swiss bank accounts.