Save on your taxes Purchasing real estate – tax-saving tips

Do you want to sell your property? We can give you some valuable tips and show you how to plan for the sale.

by Felix Hauser 27 Sep 2016

Purchasing residential property is not always a decision for life. Changes in family or professional situation can lead to a change of location and to the sale of a home. But how do I sell my home? What are the tax aspects that I have to take into consideration? What should I look out for when buying a new house?

How to pay less real estate capital gains tax

When real estate is sold, a real estate capital gains tax becomes due. This must be paid by the seller. Put simply, a tax is levied on the difference between the purchase and selling price at the tax rate of the canton where the property is located. In addition, the real estate capital gains tax depends on how long the property has been owned. The longer you have lived in the house, the lower the tax. The canton of Zurich calculates this period of time in full years, while other cantons calculate it on a monthly basis. Is your home in the canton of Zurich? If so, you should wait to sell your property if possible until the full year is completed.

Buying a new home: sell your house, find a new one and save on your taxes

If you have to sell your house or apartment because you are moving, you will likely look for a suitable replacement property in the new location. The sale of real estate followed by the purchase of a new home is referred to as a “replacement home purchase.” You can save a lot of money when you buy a replacement home in Switzerland; if you buy the new home within a specified period of time, you do not have to pay the real estate capital gains tax for the time being, because it is deferred. Depending on the canton, this period is between one and five years. The period in the canton of Zurich is about two years.

How do I apply for the tax deferral?

You apply for the tax deferral through your previous place of residence. It is advisable to tell the local officials of your plan to buy a replacement home before you make the purchase. The local tax office will assess the real estate capital gains tax, but will then defer it for the time being. So, you will have the option of moving temporarily into a rental unit after selling your home. You can then take your time to find a new apartment or house to buy. If you buy a new home, the real estate capital gains tax is deferred to the reinvested real estate capital gains.

How do I sell a house?

What shall I look out for when selling a house? This is a question that everyone asks before they sell their real estate. If you are uncertain, it makes sense to talk with a bank advisor who can explain to you the many possibilities and give you some practical tips for selling your home. A good place to start is with a checklist for selling your home so that you can consider all the important aspects.

Checklist for selling your home – What do I have to take into consideration?

  • If possible, delay selling your home in order to reduce the real estate capital gains tax.
  • Think about buying a replacement home in order to save on your taxes.
  • Buy a new home within a specified time period (one to five years).
  • Start the replacement home process with the town officials in your former place of residence.
  • Talk to a bank advisor if you are uncertain.