Purchase costs: definition

Purchase costs refer to all the additional costs that are added to the purchase price of a property at the moment you become the owner.

They do not correspond to the price of the home itself, but to all the administrative, tax and legal costs required to formalize the transfer of ownership: notary fees, transfer duties, land registry fees, costs linked to the mortgage certificate, and sometimes brokerage or appraisal fees.

In Switzerland, purchase costs generally represent between 3% and 5% of the property price, depending on the canton and the municipality. In some cantons, especially in French-speaking Switzerland (Vaud, Geneva, Neuchâtel, Jura), the weight of transfer duties is high, which significantly increases the total amount of purchase costs. Conversely, in cantons such as Zurich or Schwyz, where there is no transfer duty in the strict sense, purchase costs remain more modest, made up mainly of notary fees and land registry fees.

Purchase costs are very important to factor in from the start of your project, because they must generally be paid from your own funds and are not financed by the mortgage. Forgetting to budget for these purchase costs can derail a project just before signing with the notary.

Purchase costs in detail

Purchase costs group together several items, which vary slightly from one canton to another, but whose overall structure remains similar:

1. Notary fees and charges

The notary draws up the deed of sale, authenticates the transaction and coordinates with the land registry and, where applicable, the bank.
Their fees are often calculated as a percentage of the sale price, according to a cantonal scale (for example around 0.6–0.8% in some cantons).
These fees are fully part of the purchase costs.

2. Transfer duty (or equivalent tax)

This is a cantonal (sometimes municipal) tax levied when ownership changes hands.
In cantons such as Vaud, Geneva or Neuchâtel, this transfer duty can reach around 2–3% of the property price, or even more with municipal surtaxes.
In other cantons (for example Zurich, Schwyz or Zug), transfer duty has been abolished or replaced by lower charges.
Transfer duty is often the heaviest item in the purchase costs.

3. Land registry fees

Any change of ownership must be registered in the land registry.
The registry charges fees calculated on the value of the property and on the creation or modification of pledge rights (mortgage certificates).
These fees, although less talked about than transfer duties, are an unavoidable component of purchase costs.

4. Costs linked to the mortgage certificate

When your bank finances the property by means of a mortgage, a mortgage certificate must be created or transferred, and registered in the land registry.
This operation generates costs (land registry fees + notarial fees) that also fall within the purchase costs.
As an order of magnitude, creating a mortgage certificate can represent around 1–2% of the certificate amount in some cantons.

5. Other possible costs

Brokerage fees (remuneration of the real estate agent), sometimes paid by the seller, sometimes shared or borne by the buyer depending on local practice.
Valuation or appraisal fees, when they are billed separately.
Value-added tax (VAT) on certain fees.

Overall, it is not uncommon for purchase costs to reach 4 to 5% of the purchase price in cantons with high real estate taxation (Geneva, Vaud, Neuchâtel, Jura), while they can be closer to 2–3% in cantons where transfer duty is low or non-existent. In all cases, these purchase costs must be paid in addition to your down payment of 20% and generally cannot be financed by the bank, which means you need to plan for sufficient liquidity

List of the main purchase costs (with cantonal examples)

Purchase costs can be summarized as follows:

Notary fees : drafting of the deed, authentication, coordination with the bank and the land registry (around 0.5–1% of the purchase price, depending on the canton).
Transfer duty / transfer tax : cantonal and municipal tax levied on the transaction (often 1–3% of the price, sometimes more including the municipal share).
Land registry fees : registration of the transfer of ownership and the mortgage certificate.
Costs linked to the mortgage certificate : creation, transfer or modification of the mortgage pledge.
Potential brokerage fees (if you, as the buyer, cover all or part of the agent’s commission).
Potential valuation or appraisal fees.

Some simplified examples:

Canton of Vaud / Geneva : total purchase costs (notary + transfer duties + land registry + mortgage certificate) often come to around 4–5% of the purchase price, with a particularly significant transfer duty.
Canton of Zurich : no transfer duty in the strict sense, but notary and land registry fees (purchase costs are then closer to 1.5–2.5% of the price).

Full example demonstrating purchase costs

You are considering buying an apartment as your main residence for 1 000 000 CHF. You discuss a classic mortgage financing with your bank (20% own funds, 80% mortgage).

1. Financing calculation without taking purchase costs into account

Purchase price : 1 000 000 CHF
Down payment (20 %) : 200 000 CHF
Mortgage : 800 000 CHF

If you only consider these amounts, you might think that a down payment of 200 000 CHF is enough. However, purchase costs are added to this calculation.

2. Including purchase costs

Let’s assume a canton where purchase costs represent around 4 % of the purchase price (a frequent case in some French-speaking cantons) :

Purchase price : 1 000 000 CHF
Overall purchase cost rate : 4 %
Estimated purchase costs : 1 000 000 × 4 % = 40 000 CHF

Your total liquidity requirement then becomes :

200 000 CHF of own funds (minimum down payment of 20 %)
40 000 CHF of purchase costs
= 240 000 CHF in total

In practice, the bank will require that these 40 000 CHF of purchase costs are also covered by your own funds (savings, 3rd pillar, gifts, etc.), and not by the mortgage. If you have not anticipated them, you risk discovering, just before signing, that you are missing several tens of thousands of francs to finalize the transaction.

3. Comparison between two cantons

In a canton with high real estate taxation (for example Vaud or Geneva), purchase costs on 1 000 000 CHF can fall between 40 000 and 50 000 CHF, depending on transfer duty and fees.
In a canton without transfer duty in the strict sense (for example Zurich), purchase costs for the same property could be closer to 20 000–25 000 CHF, mainly linked to notary fees, land registry fees and the mortgage certificate.

This example shows just how much purchase costs influence the overall budget of a property purchase. Properly planning your purchase costs, item by item (notary, land registry, transfer duties, mortgage certificate, potential brokerage), is essential to avoid unpleasant surprises and secure your mortgage project in Switzerland.