Switzerland: Life in the fast lane?

Switzerland in winter: for many, those three words create images of snow-topped mountains behind gingerbread-style houses and apartments on the edge of some of the world's greatest skiing locations.

The country certainly has more than its fair share of glamour. Formula One superstar Lewis Hamilton is the latest high-profile Brit to buy a home there, joining fellow F1 stars David Coulthard, Michael Schumacher and Jacques Villeneuve. Musicians Phil Collins, James Blunt and Diana Ross own homes there too, as does Sarah Ferguson.

"Switzerland attracts this sort of buyer – high net worth but wanting somewhere that isn't awed by celebrities," says Larry Levene, the British owner of Alpine Homes, a developer specialising in ski properties.

But even for more modest chalet and apartment buyers, Levene says that Switzerland has an edge.

"I deal with French and Swiss builders and there's clearly a difference," he explains. "You get more for your money in Switzerland. The rooms are bigger and materials and workmanship are usually better. And when the Swiss give a date for completing a project, they stick to it – to the day. The Swiss approach wins every time."

Transport links are good too. Most major Swiss resorts are within a 90-minute drive of Geneva, a favourite destination for budget and mainstream airlines from almost every major British airport. But you have to do your homework before you purchase, and be prepared to do battle with bureaucracy.

In some areas, notably Valais, it is extremely difficult for foreigners to buy (see box). Each canton has different rules but non-Swiss usually find it easier to purchase in French-speaking areas. Some British estate agents like Pure International are increasingly marketing homes in less-renowned cantons that are more welcoming to foreign buyers, such as Ticino in southern Switzerland and Grisons in the east.

However, there are also limits in some areas on the size of properties that can be bought by foreigners, and on how much – if at all – they may be extended. The golden rule is to check carefully before buying.

Purchasing costs vary across Switzerland, too. In the canton of Valais – home to the Four Valleys cluster of resorts – the combined costs of notary, land registry fees and stamp duty add about 2.5 per cent to a property's sale price. But in Vaud, another popular ski canton, the same fees add 5 per cent. Throughout Switzerland, property transactions must be made in the name of a private individual, not a business.

There are also annual community fees for water, electricity and insurance, paid to the canton authorities, as well as service charges if you buy a flat or chalet in a large resort. Again, community fees vary across regions.

But at least it is easy to get a mortgage. According to Investors In Property, a firm that specialises in homes in ski areas, interest rates are usually lower in Switzerland than in Britain and there are a wide range of loans, including "flexible" mortgages, now available.

Swiss banks will lend up to 65 per cent of the purchase price over 25 years or 50 years. The borrower pays interest every six months on the outstanding capital amount, and can pay off part of the capital too if they wish.

If you rent out to holidaymakers (these are by far the most profitable way of making your Swiss home sweat for you – if past history is anything to go by, its capital value will not rise much over time) expect to pay rental agencies about 20 per cent commission.

Rental income is not taxable in Switzerland but is taxable in the UK. However, in most cantons local inheritance laws will apply, so many property advisers suggest making a will when you buy the property, and lodging it with Swiss lawyers.

As you cut through the red tape, though, make sure you have energy left to enjoy the snow. The Swiss Alps boast plenty of ski and snowboard resorts with pistes above 2,000m, or 4,000m around Zermatt, so snow is almost guaranteed for many years to come, even if Europe's mild winters continue.

"The main problems with the higher resorts are access times. The higher you go, the longer it takes to get there and, of course, you have to be prepared to pay the price for such resorts," explains Philip Barker of Overseas Homesearch, an estate agency.

But with Switzerland, going that extra mile means you'll be getting some of the best ski properties in the world.

Caught in a jam: Why it's hard to buy Swiss

This year sees a new regime limiting the number of foreigners who buy holiday homes in one of Switzerland's most popular skiing locations.

The issue dates back to 1992 when the Swiss government decentralised property purchasing powers. Valais, which includes Verbier, introduced a permit system obliging anyone who bought a holiday home to seek retrospective permission from a local council. Over the following years a backlog of 1,920 applications built up.

In 2006, Valais introduced a moratorium on purchases by foreigners in seven of its ski communes, to allow the bureaucrats to clear the permit backlog. Much has been done but now the moratorium has been replaced by a complicated quota system.

Valais's annual quota is now 330 permits. Some 165 are for "non-mainstream" properties such as blocks of leaseback flats and hotels. Another 66 are to clear the remaining backlog from previous years. That leaves 99 permits for foreigners to purchase in mainstream developments across the whole of Valais.

Non-Swiss buyers will mostly be restricted to buying within new-build developments, because Swiss residents are banned from selling their own chalets (which automatically receive permits) to foreigners.

"We wouldn't be at all surprised if this is extended to other Swiss cantons in due course," warns Jeremy Rollason of Savills estate agency.

For a prospective buyer, the position is clear. Wherever you want to buy in Switzerland, get independent legal advice before you sign any contract.

Two to view

1. Résidence Pracondu, Nendaz

This is a leaseback scheme offering a 4 per cent guaranteed annual income for 15 years – a management company finds tenants, manages rentals and handles maintenance issues during that time. The owners can use their own apartments or those in other ski resorts for a small part of each year. £100,500 to £375,000, Savills, 020-7016 3740, www.savills.co.uk.

2. Residence Elizabeth, Nendaz

One-, two- and three-bedroom apartments are 500m from the ski lift and with panoramic views. As part of the Four Valleys, owners will have access to 410km of downhill ski runs. £213,000 to £553,000, Chesterton International, 020-7201 2070, www.chesterton.co.uk.