A Three-Bedroom Villa on the Swiss-Italian Border

$4.2 MILLION (3.95 MILLION SWISS FRANCS)

This low-slung three-bedroom villa overlooks Lake Lugano and the mountains of northwest Italy from Lugano, the largest city in the Ticino region of southern Switzerland.

Built in 1980 and renovated in 2009, the two-story house, with about 1,930 square feet of interior space, borrows from the Spanish Mediterranean style with its arches, tiled roof and wood-frame accents. The style is in keeping with the general ambience of Ticino, known as “Switzerland’s Mediterranean” for its mild climate and laid-back lifestyle, said Ueli Schnorf, owner and chief executive of Wetag Consulting, which lists the property.

The rooms are “few but very large,” designed to maximize the expansive views, Mr. Schnorf said. The main floor consists of the kitchen and open-plan living and dining room with a vaulted ceiling and wood-burning fireplace, and opens to a large stone-inlaid terrace with seating and dining areas. The westward views from a terrace and swimming pool take in the lake and the Swiss-Italian border.

“It’s a brilliant position because you’re on a little hill with a large green area around you and a wide view over the lake and the mountains,” Mr. Schnorf said. The 0.13-acre plot also includes a one-car garage and outdoor spaces for two cars.

The living room features a timbered ceiling and a wood-burning fireplace, but the view from the picture window is the star attraction. A smaller room off the living area is configured as a den, but could be a guest bedroom. The kitchen is up to date with integrated appliances, high-finish cabinetry and stone countertops.

The primary bedroom follows the minimalist aesthetic of the living spaces, with a white wall of built-in closets and a black accent wall behind the bed.

One story down, a second living room has its own wood-burning fireplace and doors to a terrace. Also on this level are a wine cellar, a third bedroom, a full bathroom and a large laundry and storage room. Sliding glass doors open onto a small terrace bordered by natural greenery. Wide-plank oak floors run throughout the house on both levels.

With 62,000 residents, Lugano is the largest city in Switzerland’s Ticino region, where Italian is the official language. The city center, about six miles from the Italian border, reflects the neighboring culture in cuisine, language and lifestyle. Lugano is also Switzerland’s third largest financial center, after Geneva and Zurich.

The city is served by several train lines: the Swiss Gotthard railway, the Swiss Federal Railways and the Trenitalia regional and international lines. The closest international airport is in Milan, about 50 miles south.

Market Overview

Political and financial stability, as well as excellent infrastructure, health care and education, contribute to Switzerland’s standing as one of the world’s most expensive places to live, said Simon Incir, owner of the Engel & Völkers affiliate office in Lugano. “Switzerland is very stable and secure for international people,” Mr. Incir said,

And Ticino is one of its priciest regions, which the housing stock anchored by noble palaces built from the 16th to 18th centuries. Another period of development in the 19th and early 20th centuries saw a mix of classic and more flamboyant villas built by a class of new wealth, while more recent construction evokes Mediterranean styles and ultramodern architecture.

Mr. Incir said that stricter government lending policies have limited the overall market for foreign buyers — most banks require 50 percent down — but the premium sector remains robust.

“After Covid, we had a lot of demand from all over the world and especially families with a very high power of purchase,” he said. Housing in the lower segment of the market ranges from 500,000 to 1 million Swiss francs ($530,000 to $1.06 million), with the midrange going up to about 2.5 million francs ($2.65 million).

An Engel & Völkers market 2018 report on Lugano ranks Monte Brè, east of the city center, and Collina d’Oro, on a peninsula southwest of the center, among Lugano’s most sought-after areas. Mr. Incir said the trend has not changed: Current listings by the agency range from $6.63 million francs ($7.02 million) for a five-bedroom Monte Brè apartment overlooking the lake, to 14 million francs ($14.8 million) for a six-bedroom villa built in 2016 with a pool and various amenities in Collina d’Oro.

Alessandro Dubini, owner of Domus Realty in Lugano, said Ticino enjoyed an 11-year price boom before the pandemic slowed the market. Now, he said, “there is another boom because of new customers looking for more space to work at home, more outdoor and green spaces.”

“In 2021 we had a 100 percent increase in demand compared to 2019, and now in 2022, we have another 50 percent compared to 2021,” Mr. Dubini said. “Anything new and modern we sell or rent quickly.” His current listings include a 2,195-square-foot, two-bedroom apartment for 2.9 million francs ($3.1 million) and a 2,580-square-foot, three-bedroom apartment in the center with lake views for 3.78 million francs ($4.01 million).

Matteo Degli Agli, owner of MDA Group Real Estate, said prices in Lugano have increased by about 10 percent since the onset of the pandemic — an increase that UBS, Switzerland’s largest bank, also reports for luxury and second homes.

“Buyers want an extra room for an office, or a garden or a terrace,” he said. “Villas are more requested and don’t stay on the market — they are sold within two or three months.”

But a recent Real Estate Bubble Index compiled by UBS warns of “a clear overvaluation of the local housing market” and the likelihood of “an imminent price drop.” The index rose only 0.1 percent point, to 1.58, in parallel with consumer prices in the second quarter of 2022. Because of a limited housing supply, however, the bank notes a price correction is “unlikely in the next 12 months.” Ticino has a low “relative risk assessment,” according to the report.

Mr. Degli Agli estimated prices in the center of Lugano at 7,000 to 27,000 francs a square meter ($690 to $2,660 a square foot), with high-end amenities and views commanding the highest prices. “For 27,000 francs, you should get a luxury flat or villa with a lake view, a garden and a pool,” he said. In the middle range, expect to pay 10,000 to 12,000 francs a square meter ($985 to $1,185 a square foot).

Who Buys in Ticino

Mr. Schnorf said that before the pandemic, about 30 percent of buyers in Ticino were northern Swiss, with much of the rest coming from elsewhere in Europe. Now, with less interest in traveling abroad, Swiss buyers are filling more of the market.

Mr. Degli Agli has seen the same trend. “They decide to invest in the Ticino market instead of going to Sardinia and other resort locations,” he said. “The organization and mentality is of the Swiss people, but the culture and restaurants have the Italian lifestyle.”

Mr. Dubini said that he fielded more rental queries from Americans and non-Swiss Europeans during the pandemic, especially from France, German and Italy. “Here in Switzerland, we had more freedom than in Spain and Italy. The majority came here to rent to see how life is here, and after a year or two now are asking for houses to buy.”

Buying Basics

Foreign buyers are limited on the size of the property they buy if it is not intended as their primary residence. Nonresident owners who live abroad and use their Ticino property only for holidays are limited to homes with a maximum of 200 square meters (2,150 square feet) of living space and 1,000 square meters (0.25 acres) of land — an edict meant “to discourage speculation and protect the Swiss from being priced out of their own market,” Mr. Schnorf said.

Websites

Languages and Currency

Italian; Swiss franc (1 franc = $1.06)

Taxes and Fees

The annual property tax for this house, like all purchases in Ticino, is dependent on the buyer’s assets, Mr. Schnorf said. Foreigners who have an annual income of at least 750,000 francs ($790,000) can apply for a flat-tax scheme — also arranged on a case-by-case basis with the canton — with an average minimum payment of 130,000 francs ($138,000).

A notary or public officer (depending on the region) performs due diligence and steers the transaction, said Gianni Masera, a partner who specializes in real estate at Masera & Della Casa’s Lugano offices. The fees amount to about 0.5 percent of the price.

Stamp duties and other transfer taxes vary by region or municipality; in Ticino, the stamp duty is 0.3 percent of the purchase price. Other fees, such as the official purchase authorizations, can run from very little up to about $30,000, “at the discretion of the authority and depending on the complexity,” Mr. Masera said.

Fees for Ticino regional and municipal certificates are another 200 francs ($212), paid by the buyer. Broker commission fees are from 3 to 5 percent, paid by the seller.

Contact

Ueli Schnorf, Wetag Consulting Immobiliare SA; +41 (0) 91 601 0440; www.wetag.ch

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