When Is the Purchase Price Paid?

The notary's escrow account

In Switzerland, the purchase price is not paid directly from the buyer to the seller. Instead, it is transferred to the notary's escrow account (compte de dépôt) before the deed is signed. The notary holds the funds in escrow until the deed is signed and the transfer is registered in the land register, at which point the funds are released to the seller.

This escrow mechanism protects both parties — the seller knows that the funds are available before signing, and the buyer knows that the funds will only be released when the transfer is legally complete.

The deposit

The deposit (typically 10 percent of the purchase price) is paid to the notary's escrow account when the reservation agreement is signed — typically 4 to 8 weeks before the deed signing. The deposit is applied against the purchase price at completion.

If the buyer withdraws from the transaction without a valid reason, the deposit may be forfeited. If the seller withdraws, the deposit is returned to the buyer, and the seller may be liable for damages.

The balance of the purchase price

The balance of the purchase price (purchase price less the deposit already paid) must be transferred to the notary's escrow account before the deed signing appointment. The notary will confirm the exact amount and the account details in advance of the signing.

For buyers financing the purchase with a mortgage, the bank will transfer the mortgage funds directly to the notary's escrow account. Buyers should coordinate with their bank to ensure that the funds are available in the escrow account on the required date.

Transfer tax and notary fees

In addition to the purchase price, buyers must pay the transfer tax (droits de mutation) and notary fees at the time of signing. In the canton of Vaud, the transfer tax is approximately 2.2 percent of the purchase price, and notary fees are typically 0.1 to 0.3 percent. These amounts are calculated by the notary and must be paid to the notary's account before or at the time of signing.

Buyers should budget for these additional costs when planning their finances — the total acquisition cost is typically 4 to 6 percent above the purchase price.

Key points

• Purchase price paid to notary's escrow account — not directly to the seller
• Deposit (10%) paid at reservation agreement stage; balance paid before deed signing
• Mortgage funds transferred directly from bank to notary's escrow account
• Transfer tax (~2.2%) and notary fees (0.1–0.3%) paid at signing
• Total acquisition costs: 4–6% above purchase price