Building a house - the financial aspect

Recently I’ve been thinking more and more about buying a building plot and building my own house. It looks like the financial considerations there in terms of cost planning, debt financing, expected equity percentages, etc are very different from what you usually find being discussed here.

I didn’t find a topic like that here which surprised me a little.
There are some resources outside of the forum, but they are either not structured too well, or not in a conversational form, or both.
Maybe this hasn’t been discussed here before because it’s not a very mustachian move, but it would be interesting to see if we can get some back of the envelope math how bad it is (or isn’t).

What do others think?


I´m almost done with building a chalet in Chamonix. We originally intended to buy an existing house, but the availability and price never really met what we wanted. I´m fairly confident that what we have built will be worth at least 20% more than what we spent. With that said it´s a major, multi-year project. You need to be invested into the design, the planning, the project management. It takes far more time and energy than you might expect.

I have to say tho, now we are close to the finish close I am really pleased with the result.

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I’d say the most important step is to find a good architect to work on the project. There are a lot of “architects” out there, so I’d try to get word of mouth about the ones you’re considering before hiring them. They should be able to help with the financial aspects too.

Other than that, I don’t think that, on a pure financial standpoint, it’s so much different than buying already built. There is much more price uncertainty, so you should be ready to come out with 10%-20% more (depending on the precision of the architect’s assessment and the inherent uncertainties due to the location of the property (some terrains can be expected to carry more uncertainties than others)) and/or to lower your expectations during the project.

The time constraint is the most important factor. Delays are frequent in construction, and I would expect that I may have to keep my current place a bit longer than the stated date for the end of works, especially until the works are actually started. Building permits can carry surprise and may need additional measures during construction to be taken. To note also that the mortgage will/may carry interest from when the funds are borrowed, and not when the house is finally built. Delays will carry costs in mortgage interest that can pile up since you’re still paying for your older accomodation at that point (I haven’t delved deep in the topic but have heard from people who had to pay current rent+new mortgage during construction).

If you are building in a Gemeinde/commune where there are more than 20% of secondary residencies, then your new construction will be restricted to primary residency, that should affect the comparative value of your property vs renovated properties in the neighborhood that don’t suffer this limitation.

Edit: Also, I would check the contractors I’m working with: the owner is liable for any bill the hired contractor/company wouldn’t pay to third parties and that can be enforced by a lien on the house. Having paid the primary hired contractor doesn’t protect against that, if they don’t pay their own subcontractors, you may have to pay twice. There again, a good architect is the first and most important line of defense against that.


I suppose there are no tax benefits in building a new house, while renovating an old one can come with substantial tax savings.

I agree that a good architect is key, but I’d be careful, they can easily nudge you into spending more and implementing design choices which, even though beautiful/valuable to you, might not please the average buyer, in case one day you decide to sell.


How does one go about finding a good architect, and how are they typically compensated? Are they usually taking a fixed fee or is it % of overall project?

We are renovating an existing home, but are investing probably 300-400k into it (moving walls / kitchen reno / baths reno / heat pump / etc).

Sorry for jumping into the topic - from maybe a slightly different perspective - but how exactly do you find plots that you can buy for building your own property esp. in Zurich/Aargau canton part?

I have never seen anything available for buying as plot in the most popular areas…Also do you have to be Swiss citizen to be able to buy land?

I haven’t gone through the process yet, others may have better insight but I’d say:

Word of mouth would be my best bet: trying to find people who have already built their house and ask about their experience. If they have a good architect to recommand, I’d consider going with them. It’s probably easier for natives who have an extended relationship network in Switzerland than for expats.

There is a system of registers that allows to attest a given arichtect/engineer/environmental specialist has undergone relevant studies and has some experience:

Reg A means Master (usually ETH/EPF for architects) plus 3 years of practice.
Reg B means Bachelor (usually FH/HES/SUP) plus 3 years of practice.

I have gone through the registered architects in Valais/Wallis and haven’t found the really bad ones I know (I’ve worked in a public administration dealing with architects) but that’s no guarantee since I know only a few of them.


mostly based on the SIA 118, if we oversimplify the Norm it basically takes the construction costs and applied a %age, this generates the compensation.
Its a bit more complicated, since for example the architects does not get compensation (or less) for purely engineering works.

At the same time, there are different project Phases (SIA 112) where the development of the project is described. This defines, that the project start with "Phase 21 Machbarkeitsstudien, then 31 Vorprojekt, 32 Bauprojekt, 33 Bewilligung, etc.

At the end of every phase the compensation could be (retroactively) adjusted. The (simplified) process however is more likely to be the following:

  • Lumps sum for studies till ~Phase 31
  • You get a cost estimate on this base the compensation of the architect will be based.
  • The formal approval process begins
  • Detail plan and construction start.
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In the popular areas I would say “forget it”. In these regions constructible land is scarce (to avoid urban sprawl) and multiflat developments are preferred. If you really want to go for it (and have the money for that), build relationships into the industry.

For classic constructible land no (if you are EU/EFTA). If you are from a third party state, some restrictions might apply. If you want to buy to build a primary residence and you are allowed to live in Switzerland, there should be no issue.

Sorry to arrive late to the discussion :slight_smile: I really like these topics! :sweat_smile:

I might be a little biased but this is truly key. While not essential (!), word of mouth can be useful since it allows you to build upon someone’s trust. You don’t have to start from scratch with a completely unknown professional. In my opinion, the most important thing (with or without word of mouth) is to get to know the architect’s work and approach. Take the initiative to contact some offices and arrange a meeting to learn more about their experience. It’s always beneficial when clients and architects share some common vision(s) or values.

Here I don’t fully agree @Wolverine :wink: When working on an existing house, you have limited knowledge about what lies beneath the surface, such as the initial conception and the existing construction details. What lies beneath that layer? What elements hide behind that wall? Is there proper exterior water drainage? Are the conditions satisfactory?

When working in existing houses, you also need to take into account the financial backing linked to architectural works that improve the building’s energy consumption - Typically, each ‘commune’ or canton has ongoing programs that cover various aspects, from kitchen appliances replacement to thermal insulation. A good architect can / should assist you navigating those opportunities.

Here things become nuanced and we’ve seen some examples in this forum. Some architects take a certain number of changes into account and maintain flexibility throughout the development of the project, while others meticulously account for “every” minute spent. Imagine a scenario where the initial project included a $30k kitchen but later on the client decided to have a 60k kitchen just because he wanted highly designed drawer pulls and Vola taps. In this case, the percentage of the overall project changes, but does it mean that the architect had to put in 100% more work? (Of course I’m exaggerating to make the point.) Or the other way around… the architect proposes you 2 design variants for that $30k kitchen but after several long design meetings and an unhappy client, they had to design 2 more variants, build 2 more models for the same $30k kitchen. The best is to clarify these situations beforehand.

I hope that relevant studies can guarantees future designs :wink: (…I have teaching experience in a reputable school)

Finally, everyone can build a house, but most of us want to build a home. It’s very important to have some pleasure in this challenging and amazing process… (I think I should make some time to post some architecture related content here :slight_smile: but keep this discussion running. It’s very good to learn from different moustachian perspectives on these subjects)