Real estate market in Vaduz: an emerging market

The real estate market in Vaduz, the capital of Liechtenstein, presents a unique blend of stability, limited supply, and stringent regulations. The country’s small size and its appeal as a financial hub make its property market particularly intriguing for potential investors.
Property Prices
In central Vaduz, the average price per square meter is approximately €2,600, while outside the city center, it drops to around €2,200. These figures can vary based on specific neighborhoods, property types, and their conditions.
Restrictions for Foreign Buyers
Acquiring property in Liechtenstein as a foreign citizen comes with several challenges. Prospective buyers must obtain a residence permit, reside in the country for at least three years, and secure government approval for the purchase. Even with substantial financial resources, the acquisition process can be complex and time-consuming.
Property Purchase Procedure
The standard procedure for purchasing property in Liechtenstein involves several steps:
1. Property Selection: Identifying suitable residential or commercial properties.
2. Federal Buyer Screening: The buyer undergoes a compliance check to meet established requirements.
3. Acquisition Approval: Obtaining official permission from authorities to purchase the selected property.
4. Signing the Purchase Agreement: Formalizing the agreement between the seller and buyer.
5. Title Registration: Registering the new owner in the appropriate registries.
Associated costs during the purchase process amount to approximately 3.9% of the property’s purchase price. For instance, when buying a new apartment priced at €500,000, additional expenses would be around €19,500.
Taxes and Maintenance Expenses
Liechtenstein does not impose an annual property tax. Income derived from renting out properties is subject to progressive income tax rates ranging from 3.24% to 17%. Estimated annual maintenance costs for an apartment include utility payments (€85–278 per month) and fees for internet, television, and telephone services (€45–49 per month).
Rental Market
Rental prices for one-bedroom apartments in Liechtenstein start at €1,500 per month, two-bedroom units at €2,000, and three-bedroom units at €2,500.
Market Prospects
Housing prices in Liechtenstein have been steadily increasing by 4–5% annually, making the market attractive for long-term investments. However, rental yields remain relatively low, ranging from 2.2% to 3.4% per year.
The real estate market in Vaduz is characterized by its stability and limited availability. Strict regulations and high prices make it accessible primarily to affluent investors prepared for long-term commitments and adherence to local requirements. Before making a purchase decision, it’s advisable to thoroughly examine all aspects of the process and consult with professionals if necessary.