Property in the Principality of Liechtenstein, a tiny landlocked country
sandwiched between Switzerland and Austria, is very expensive. Rents are
high. Yields are not
Property in Liechtenstein can cost around €300,000 for a 50 sq. m.
apartment, or €1.5 million for a 300 sq. m. apartment or house,
depending on the size of the property.
Restrictions on Buying Property:
There are restrictions on the purchase of real estate by foreigners.
Buying property requires 3 years residency first. Since joining the
European Economic Area, (an organization serving as a bridge between the
European Free Trade Association (EFTA) and the European Union) in
May1995, Liechtenstein has also imposed stringent rules on residency
permits from people from the EU.
EU has given Liechtenstein the freedom to restrict entrance due to its
small size. Currently it allows 28 EU nationals every year without
working permits, excluding multi national employees who can take up
residence as long as they have a work permit.
Liechtenstein and the EU including links to Liechtenstein government
and Tourist Information.
Once the buyer decides on a property, he needs to
appoint a lawyer who
will conduct the search and hands in details of the buyers to the
concerning government agency (Grundbuchregistrar). Once the search has
been completed and there was no formal objection to the buyer acquiring
the property, the money is then transferred to a private account at a
lawyer’s. The money is only transferred to the vendors account when all
bureaucratic steps have been completed, registration of the property and
checking that it is clear of debts and taxes.
Total transaction costs amount to 4% of the selling price. The buyer
pays 0.9% notary fees. The agent’s fee of 3% is paid by the vendor.
The Rental Market:
Rents can be freely negotiated between landlord and tenant, as can many
other points appearing in a rental contract.
civil code has provisions disallowing disproportionate increases in
rental prices. A basic rule is that the rent can only be raised where
the contract is for more than 2 years’ duration, and only proportionally
to the real inflation rate.
maximum of three months’ rent can be taken on deposit. When this deposit
is held by the landlord for more than a year, he must pay the standard
interest rate on those funds.
Landlord and Tenant Laws are enforced through local courts in
Liechtenstein, whose procedure follows the Court Rules for Tenancy
issues. The law’s tendency to favour the landlord is noticeable, because
hardly any legal dispute go beyond the court of first instance.
fact, there have been very few cases of disputes in this area. Legal
costs are very high and tenants usually cannot afford the cost and
effort. However, in the case of disproportionate rent increases, or
where the tenant is in special circumstances (e.g. many children), a
court procedure may be worthwhile because the court may allow the tenant
to extend the time before an eviction for up to a year, depending on the