Taxes and extra fees Home ownership and taxes

In most cantons, the very fact that a property changes owners is itself already subject to a property transfer tax. As a rule of thumb, you should budget from 1 to 3 percent of the purchase price. The buyer must come up with a portion of the costs, and the buyer and seller share a portion – and this varies from canton to canton. The federal government and cantons such as Zurich or Schwyz do not charge a property transfer tax.

Notarial and land registry fees also differ widely. Though they are not taxes as ordinarily understood, these costs can also have an impact. By way of example, let’s look at the notarization of a deed of sale for a home valued at 700,000 Swiss francs. In many cantons, for example Zurich, Schwyz or Thurgau, this will involve a charge of a few hundred francs. In Bern, Ticino or in some cantons of Western Switzerland, the same transaction can cost from 2,500 to 3,500 francs; in an extreme case, notarization can cost up to six times more.

The same applies to drafting a Schuldbrief (Swiss mortgage certificate), which you will need to secure a mortgage. Issuing a Schuldbrief worth more than 500,000 francs costs 750 francs in the canton of Schwyz, including VAT. In the canton of Bern, on the other hand, a notary will charge roughly 1,300 francs, in line with the cantonal schedule of fees, not including VAT. Not to be forgotten are any taxes on lump-sum payments, which would apply if you use pension assets in the purchase (pension fund or pillar 3a). For example, taxes of roughly 4 to 10 percent apply when you withdraw 250,000 francs. In an extreme case when you make a purchase, after adding up all positions, you could incur tens of thousands of francs in taxes and ancillary costs.

Depending on the circumstances, proceeds from the sale of a property could be higher than the purchase price. All cantons levy a capital gains tax on the difference arising from such a sale. Also the capital gains tax on the sale varies a great deal by canton. How much tax is charged depends on how long the property was owned – the greater the profits and shorter the time of ownership, the higher the taxes. You can deduct all value-enhancing investments throughout the entire length of ownership, as well as property transfer costs, brokerage and notarial fees. For this reason, you should safely store all records of incidental expenses and investments over at least the past 20 years.

We recommend that you clarify all fees, tax implications and any potential tax breaks in advance. Capital gains taxes can be deferred in all cantons if the seller becomes a homeowner again within a reasonable period of time. Summary: To keep taxation reasonably moderate, seek out advice and look more deeply into the tax consequences of owning a home yourself.

According to current regulations, homeowners in Switzerland must pay tax on the imputed rental value as income. The Federal Court has stipulated that this must come to at least 60 percent of the market value. Property taxes are also owed on the real estate. Some cantons also charge a separate property tax. This usually falls between 0.1 and 3 per mil of the taxable value of the property.