Unsatisfactory Market Due to Transaction Costs

In Switzerland transaction costs such as notary’s fees, land register fees and so on are considered to be too high. The equivalence principle for such fees and taxes has been infringed, depending on the canton, which is why the price inspector took action.

The following opportunity costs had to be recorded hitherto:

Transaction Costs – Quantitative

Type of costs

Basis of calculation


Transfer costs

Purchase price

6% – 8%

Valuation error

Purchase price

approx. 10%

Subtotal transaction costs


approx. 16 – 18%

Equity ratio

Purchase price

approx. 30%

Ratio of transaction costs to own funds


> 50% own funds

The consequences of these high transaction costs, which many investors perceive as prohibitive, are:

  • Waiver of necessary adaptations because of the costs
  • Disincentive to maximise
  • Inefficient allocation
  • High level of illiquidity of property investments

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