Real estate investment in Switzerland

Property buyers pay a one-time transfer tax and special fees. The associated costs range between 0.25% and 3.55% of the purchase agreement value.

When buying an apartment worth €1.5 mln, the investor will spend €1.55 mln, including additional costs.

Owners pay a property tax of 0.05 to 0.3% of the cadastral value. The rate depends on the canton; some have abolished the property tax, such as Zurich. The cadastral value is 30—60% of the transaction amount.

Rental income is included in the income tax base. If the owner does not lease the property, they pay the income tax on the imputed income, which could have been received from rent. The imputed income equals 70% of similar real estate’s average market rental price. The imputed rental income is also included in the income tax base.

The income tax rate is progressive and depends on the person’s annual income and the canton.

The seller pays a capital gains tax of 18% to 100% of the difference between the sale and purchase prices.

The tax rate depends on the canton where the property is located, the property value and the period of ownership. The base rate ranges between 25% and 50%.

A flexible system of discounts and markups is applied to the capital gains tax. For example, if the seller has owned a property for more than five years, they will receive a discount of up to 70%, and if less than four years, they will receive a markup of up to 50% of the amount of the base tax payment.

If the owner sells the property through an agency, they pay a commission of 3 to 5% of the sale price.