11.12.2023
Buying a house or flat together: this is the wish of many couples. But what are the options if you are not married? If you live in a cohabiting couple and want to buy a home, there are a number of things you should consider to ensure your financial security.
First of all, you don’t have to be married to realize your dream of owning your own home. However, cohabiting couples are not as well protected by law as married couples or couples in a registered partnership. That is why it is worth planning for every eventuality before you buy a home.
If you want to buy a property as a cohabiting couple, there are three types of ownership to choose from:
As a cohabiting couple, you must state in the land register who owns how much of the property. So if the property costs 1,000,000 francs, and you contribute 300,000 francs of equity for a mortgage of 600,000 francs and your partner contributes 100,000 francs, then your proportion is 75 percent and your partner’s proportion is 25 percent. These proportions are calculated as the ownership ratio . Even if you have different proportions in the property, you are both jointly and severally liable for the mortgage.
With this option, you are free to choose your proportion of the property. You contribute as many shares as you can afford. Property maintenance and any investments are also allocated according to this ratio.
If you want to sell your shares in the house after a separation, your partner has the right of first refusal. Moreover, such a share is usually not easy to sell. The land register must also show what proportion of the purchase price was financed from the retirement provision.
Co-owned property offers great flexibility. This type of ownership is particularly suitable if one of the partners contributes to the financing with retirement assets (pension fund or pillar 3a).
This type of ownership is possible only if you can finance the purchase without retirement assets. The property is owned equally by both partners, regardless of the financial participation and capital invested. Both are entered in the land register with equal rights. Joint and several liability also applies in this case.
In this variant, both partners have equal rights.
If one partner has invested more in the property, this is not reflected in the rights: you always have to decide everything together and come to an agreement. In the event of a separation, a sale can therefore be hampered for a long time if you cannot come to an agreement.
Co-ownership does not distinguish who invested what amount at the time of purchase. Both parties are jointly and severally liable. For this reason, it is important to set out the exact ownership structure in a contract (such as a cohabitant or partnership agreement).
In the case of sole ownership, only one party owns the property. They are registered at the land register and have full financial and legal responsibility for the property.
No difficulty in making decisions: the owner can make decisions alone and sell the property or restrict it with liens at any time.
The owner is fully responsible and must meet the affordability criteria and pay for all costs incurred by the property (debt interest, maintenance, investment). The non-participating cohabiting partner has no right of involvement whatsoever. If they opt for joint liability or a contribution to the living costs, separate contracts are required (admission as a borrower, rental agreement).
In a rental agreement, set out the conditions under which your cohabiting partner may live in the property and contribute to the maintenance costs.
Whichever of the three types of ownership you choose, as a couple you should protect yourselves in the event of separation or death. You can do this with a cohabitation agreement or a partnership agreement. A cohabitation agreement should be set out in writing and signed by both partners.
The procedure in the event of a subsequent separation should be governed by law and set out in great detail: for example, if one party moves out, a time limit can be set within which the other party can take over the remaining share or within which the other party must move out. If both parties want to take over the other’s share, the procedure for reaching a decision can be defined, e.g. by drawing lots or a bidding process. And if neither side wants to keep the property, it can be sold through an independent estate agent and the profit or loss shared. Who receives how much of the sale price should also be specified. Only the type of co-ownership is usually already covered: here, the ownership proportion can generally be used as the cost apportionment.
Cohabiting couples are not as well protected as married couples. If one party dies or becomes disabled, the other does not receive any support from the OASI/DI or pension fund. Death risk insurance with a disability pension can minimize this risk. This allows you to pay out any heirs so that you don’t have to sell the property in the event of your death. The other party should be the beneficiary in the event of death. If you don’t want to take out additional insurance, you can also include your partner in your will. However, this is possible only within the freely available inheritance quota. The obligatory parts for the legal heirs always come first.
A cohabitation agreement can also be used as an inheritance contract. In this way, you achieve the goal of mutual inheritance rights, but only within the freely available inheritance quota. If you wish to transfer the statutory obligatory part for the entitled heirs to your partner, the entitled heirs must waive their share in an inheritance waiver agreement.
Buying a home and choosing the type of ownership also has tax implications: cohabiting partners are taxed individually for income and wealth tax purposes. For example, if you pay all the upkeep of the property, even though you only own half of it, you can only claim the upkeep deduction in proportion to your share of the property. This applies to the co-ownership variant. There are no ownership quotas for total ownership. It is therefore essential to include additional wording in the cohabitation or partnership agreement, which will then also be valid for tax purposes. As the sole owner, you also pay tax on your property alone.
Once you have taken the necessary precautions, it is time for fun aspects – designing and furnishing your home together.
This depends on the type of ownership chosen. In the case of co-ownership, the proportions of home ownership are determined in advance and entered separately in the land register: in most cases, the proportion corresponds to the money invested at the time of purchase. In the case of sole ownership, only one partner is entered in the land register as the owner and can alone claim ownership of the home. And in the case of co-ownership, both cohabiting partners are entered in the land register as equal owners. This means they own the home in equal proportions, even if one of them contributed more capital to the purchase.
A cohabitation agreement can cover the following:
From a legal point of view, cohabiting homeowners are at a disadvantage compared to married couples. However, if you plan everything carefully in advance, you can avoid these disadvantages.
As of 1 July 2022, same-sex couples have also been able to marry in Switzerland. Since then, no new registered partnerships have been possible. Partnerships that were established before 1 July 2022 continue to exist as they are. By registering a partnership, the bereaved partner received the same inheritance rights as in marriage and was better protected financially as a cohabiting partner. As of 1 July 2022, it has also been possible for registered existing partnerships to be converted to marriage.
