Switzerland’s housing market is famously hard to break into for overseas buyers, but the ski resort of Andermatt has managed to sidestep tough rules as it pushes to take a step up in the world. Sarah Davidson found out how and why it is being promoted to British investors.
It’s been painted by Turner, called the ‘dearest and most interesting’ place by Goethe and, according to legend, there’s a treasure trove of gold still waiting to be found under the Devil’s bridge, lost by Irish earls who fled there to escape 17th century English rule.
Along with those tales, the Swiss resort of Andermatt has been famous for hundreds of years, largely as a result of its situation, slap bang in the middle of natural mountain crossroads from north to south and east to west.
For centuries, if you wanted to travel from France to Austria, or Germany to Italy, Andermatt was on your route. It was loved by Queen Victoria and Prince Albert and at its height, was considered as chic a destination as St Moritz, Zermatt or Verbier.
Bernhard Russi, the Swiss World Champion downhill skier, lives in Andermatt
Unfortunately for its residents, the onset of two world wars spurred the Swiss Government to station its army there, in a garrison just outside the village.
It all but wiped out the area’s tourist appeal, resulting in a major downturn for the town throughout much of the 20th century.
Andermatt’s fortunes have been on the turn recently though, following major investment in the town by Egyptian businessman Samih Sawiris, an international property and leisure mogul, who in 2009 committed £1.3billion to restoring the area and building a luxury ski resort.
Today, the town boasts internationally acclaimed five-star hotel The Chedi Andermatt, 42 apartment buildings, five other four-star and five-star hotels and 28 exclusive chalets.
Ex-Manchester United manager Louis van Gaal is a fan, having bought an apartment in the newly built Gotthard Residences there last year.
Ex-Man United manager Louis van Gaal
The resort’s golf course has been crowned Switzerland’s best for the second year in a row and the skiing is world class, with runs to suit every ability and acclaimed off-piste skiing on the Gemsstock mountain.
Switzerland offers practical benefits for the wealthy too.
The super-rich have long been attracted to the country for its beneficial tax treatment of foreigners.
Wealthy individuals can choose to pay a relatively low lump sum on money they bring into the country and become exempt from further taxation.
But Switzerland’s housing market is notoriously hard to buy in if you are an international buyer, which is what makes Andermatt interesting.
Regulations including Lex Koller, a law which restricts foreign ownership of Swiss property, have discouraged international buyers and have pushed investment towards neighbouring countries, such as France and Italy.
But in agreeing to fund the resort’s development, Mr Sawiris negotiated an exemption from these onerous restrictions, meaning it’s much easier for Britons to buy in Andermatt than anywhere else in Switzerland.
At 1,444 metres above sea level, Andermatt is perfectly placed for snow all year round
Andermatt is a small town, tucked up in the Swiss mountains between the Alpine passes in the Ursern valley. It’s a stunningly beautiful place, all high imposing crags and mountains surrounding a village, chocolate-box in its prettiness.
At 1,444 metres above sea level, it’s well placed for snow and has quietly been gaining greater popularity with skiers and snowboarders as a reasonably undiscovered treasure.
The town is mid-development, so many of the new apartments and chalets are already sold. But there are still opportunities to invest, with some financial incentives on offer for those who fancy buying off-plan.
As mentioned previously, Switzerland makes it difficult for foreign investors to buy property in the country but Andermatt is an exception.
Andermatt Swiss Alps – the company funded by Mr Sawiris – has agreed a deal with the Swiss government that allows it to offer properties that are exempt from the lengthy, expensive and uncertain approval process of Lex Koller.
The resort is currently at a pivotal time in its development
‘The resort is currently at a pivotal time in its development, with the ski run expansion due to be completed by December, and the opening of Raddison Blu and hotel-serviced Gotthard Residences,’ explains Franz-Xaver Simmen, chief executive of Andermatt Swiss Alps.
‘Andermatt is exempt from Lex Koller until 2030, and with the option to rent out your property when not in use, there are many reasons why now is the time to take advantage of this rare opportunity.’
There are no restrictions for buying and selling by foreigners for the next 12 years and, Andermatt Swiss Alps properties are exempt from the Swiss second home law, which limits the number of second homes to 20 per cent of the number of residents in a village – a fact which has attracted both Swiss and international buyers.
Simmen says: ‘Switzerland is one of the most attractive countries in the world for risk-averse investors and we have seen rising property prices recorded over the last decade.’
Inside one of the Andermatt Swiss Alps apartments – interior finishes can be chosen ahead
What properties are being sold?
Andermatt Swiss Alps has a huge range of properties for international buyers.
Options in one of the new apartment buildings range from studio apartments up to four bed apartments. Prices start at £280,000 and go up to £2.8million.
Penthouse suite apartments start at £3.3million, and buyers are able to design and build their own bespoke chalets from £2.8million.
There are serviced and un-serviced options to choose from, with a range of smaller hotel-based residences due to be released in the Radisson Blu complex later this year.
Currently two thirds of the completed apartments have been sold, with nearly a billion Swiss Francs invested (£790million).
The view from an Andermatt apartment, showing the mountains that attract visitors
As some of the apartment buildings are still under construction, there is the option to reserve an apartment.
Extensive floorplans and design brochures give buyers a 360-degree view of what the apartment will look like upon completion.
Check the documentation, but according to Andermatt Swiss Alps, properties are available to buy freehold. There are annual service and management charges to take into account – these vary depending on the property size and location.
If you choose to buy off-plan, you can work with the developer to choose your finish
Cuddled up: An Alpine bedroom in one of Andermatt Swiss Alps’ newly built apartments
How does investment work?
There are various options if you choose to buy and it’s possible under the Lex Koller exemption to resell to another foreigner until 2030.
Many people buy and hold their property and visit when they want but there is a managed rental scheme available which offers owners 75 per cent of net rental returns.
Based on full-time occupation by holidaying tenants and six weeks a year where the owner stays, Andermatt Swiss Alps says the rental yield works out between 2 and 3 per cent depending on the apartment type.
Buyers of the new properties in the Gotthard Residences – serviced hotel apartments – are offered a guaranteed 3 per cent return on investment for the first three years after they purchase, if they choose to enter the rental scheme.
There are some tax considerations too. Depending on how much time you choose to spend there, you may be subject to paying Swiss taxes – even if the property isn’t your primary residence.
Before you get going, seek out an independent tax and financial adviser who specialises in helping Britons in Switzerland to assess the impact on your financial situation.
Not all of the apartments cost millions – some of the one-beds can be got for £280,000
Getting a mortgage to buy in Switzerland
All of the properties offered by Andermatt Swiss Alps can be bought with the aid of a mortgage.
The firm has links to most of the Swiss high street banks including Credit Suisse, UBS and Raiffeisen.
If you apply for a mortgage, it will be denominated in Swiss francs – so be warned, currency exchange rates can fluctuate and affect how much your mortgage repayments cost if you’re converting any money from pounds.
That said, the mortgage affordability will be assessed on the rental income – payable in Swiss Francs or the equivalent.
The minimum loan-to-value on purchases is 50 per cent and the maximum you can borrow is 80 per cent.
You won’t need to open a Swiss bank account in order to apply, but the lender will assess your credit score and full financial position before making a decision on whether to lend.
What is Andermatt like for skiing?
Andermatt is known for its challenging off-piste and steep slope terrain
Andermatt is known for its challenging off-piste and steep slope terrain, which has attracted world –class skiers, such as Bernhard Russi, the Swiss World Champion downhill skier.
He now lives in Andermatt for the guaranteed snow each winter due to the altitude.
Andermatt’s slopes are not restricted to expert skiers, as this year the skiing area has been significantly expanded.
The resort is suitable both for experienced skiers on the Gemsstock, and those looking for a more relaxed skiing experience in the newly connected Sedrun area.
Lessons are on offer for all ages and stages.
What else does the area offer?
The summer months offer hikers an abundance of options in the eight surrounding Alpine passes.
For those more inclined to cocktails and spas, the Chedi is is starting to gain widespread recognition with its first Michelin star
Switzerland is considered the water tower of Europe – and in the holiday region of Andermatt you stand right in the middle. Four water sources spring from the Gotthard massif, namely the Rhine, Reuss, Ticino and Rhone, which carry seven percent of the alpine water in all four directions.
The four-source path, an attractive and varied hike in five stages, connects the sources.
The Urseren valley has also become a destination for climbing, mountain biking, horse-riding, fishing, tennis and river rafting.
And Andermatt is just over an hour’s drive from Lake Como in Italy for those seeking out alternative cultures.
For those more inclined to cocktails and spas, the Chedi is is starting to gain widespread recognition with a first Michelin star awarded to the Japanese restaurant there and the golf course winning the best golf course in Switzerland award for the second time this year.
There have also been awards for the spa, and an annual classic music festival attracts some of the industry’s top international performers such as Lang Lang, who headlined this year’s concert.
The town also boasts an eclectic mix of French, German, Italian and Swiss culture, thanks to its central location – a great opportunity for visitors wanting to explore.
How easy is it to get there?
The town is within easy reach of both Zurich (an hour and a half) and Milan (two and a half hours), both of which have international airports with regular and relatively inexpensive flights to and from the UK.
Both offer car hire, or there’s the option to take a taxi, which from Zurich takes around an hour.
What to do in Andermatt?
- Gemsstock – incredible panoramic views from the summit over the heart of Switzerland and about 600 Alpine peaks.
- Schöllenenschlucht – a gorge, which legend has it that a bridge could only be built across with the aid of the devil. Right beside, there is the Suworow memorial, a huge stone cross cut into the cliff face in memory of the Russian soldiers who fell in 1799.
- Dampfbahn Furka Bergstrecke – nostalgic rack-and-pinion steam railway (only runs in summer) between Realp and Oberwald (Valais), with stops on Furka and in Gletsch.
- Nine-hole golf course Gotthard Realp – one of the best alpine golf courses in the world and 18-hole golf course in Andermatt.
- Museum Sasso San Gottardo – deep inside the mountain you can see the once top secret Artillery Fortress of the Swiss Army, long a secret until just a few years ago. You also have the opportunity to admire the unique giant crystals found on the Planggenstock.
- Museums – the Ursern valley museum is housed in a beautiful building in Andermatt. While the history of the Gotthard Pass is documented in the Gotthard Museum at the top of the pass.
- World of Water – a 60km themed walk in the Göscheneralp valley, with 90 stopping points with information about water as an element.
- Ski, snowboard and snowshoe – something for everyone, beginners to free-rider will find their own experience.
- Ski-tour area with a snow-sure location, right up to summer too.