Tax refugees flee to haven in Switzerland

Switzerland's housing market is one of the few in the world to have benefited from the economic turmoil of the past two years. While property prices in many countries have crashed, in Switzerland they have moved steadily upwards.

Andrew Hawkins, head of international at estate agency Chesterton Humberts, said an influx of rich foreign buyers, lured by the country's low taxes and stable governance, had supported Swiss property prices. Many Swiss had also repatriated their overseas wealth to buy Swiss property, he added.

'Switzerland is one of the few countries where property prices have risen in the past year, with an average increase of 4 per cent, according to the Swiss National Bank,' Hawkins said. 'With recent economic difficulties and proposed fiscal legislation change in many countries, Switzerland once more is seen as a real port in a storm.'

Income tax rates vary between Switzerland's 26 cantons, but are usually below 30 per cent, according to website Switzerland.isyours.com. Most people don't have to pay capital gains tax and few cantons levy inheritance tax.

Multimillion-Swiss franc homes are most in demand. According to a survey by Wealth Bulletin, Via Suvretta, in the Swiss ski resort of St Moritz, was the only street on its list of The Top Ten Most Expensive Streets of the World where prices rose in the 12 months to July this year. They increased by 18 per cent to an average of US$45,000 per square metre. Via Suvretta is sixth on the list.

Many foreign buyers were former London-based finance workers, said Sergio Martinez, general manager of estate agency Aylesford International's Geneva office. Britain's ?30,000 (HK$382,000) levy on non-domiciled foreigners and increased taxes for high earners were driving them to Switzerland.