Taxes on property sales: what taxes do you have to pay when selling a home?
Taxes and fees reduce the profits you earn when selling your property. Comparis explains what costs can occur and shows you how to reduce your tax bill.
03.08.2022
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1. What taxes do I have to pay when selling property?
Which taxes apply mainly depends on where the property is located. As a rule, you must budget for property transfer tax and property gains tax.
What is property transfer tax?
Property transfer tax is due as soon as a property changes owners. This applies regardless of any profit that may have been earned. Each canton regulates property transfer taxes differently. In most cases, the buyer has to foot the bill. Some cantons do not charge any tax for changes of ownership on a property.
What is property gains tax?
You will have to pay capital gains tax on any profit you generate from the sale of your home. The applicable tax rate is set by each canton. In most cases, they are the ones collecting the tax, but sometimes this is done by municipalities. The final tax bill depends on how the property is used, how long it was held by the previous owner and the amount of profit generated from the sale.
Are you purchasing a new property to replace your current home? In that case, you can defer the property gains tax. The tax will then be due when you sell this new property.
Is speculation tax applied to home sales in Switzerland?
In Switzerland, there is no speculative tax per se, but there is capital gains tax on property. It is incurred when the property is sold. Generally speaking, the longer you owned the house, the lower the tax.
2. Which taxes apply in which cantons?
Each canton regulates property transfer taxes and capital gains taxes on real estate differently. The following table provides an overview:
| Canton | Property gains tax | Property transfer tax |
|---|---|---|
| Aargau | 5-40% depending on length of ownership | – |
| Appenzell Ausserrhoden | Flat rate of 30%; possible reductions or upcharges depending on length of ownership | 2%; municipalities may charge lower rates |
| Appenzell Innerrhoden | Progressive tax between 10% and 40%; possible reductions or upcharges depending on length of ownership | 1% |
| Basel-Landschaft | Progressive tax between 3% and 25%; possible reductions or upcharges depending on length of ownership | Buyer and seller each pay 1.25% |
| Basel City | 30-60% | 3% |
| Bern | Progressive tax between 1.44% and 8.1%; possible reductions or upcharges depending on length of ownership | 1.8% |
| Fribourg | 10-22% depending on length of ownership; upcharges depending on profit possible if property held for under 5 years | 1.5%; municipalities may charge additional fees |
| Geneva | 0-50% depending on length of ownership | 3% |
| Glarus | Progressive tax between 10% and 30%; possible reductions or upcharges depending on length of ownership | – |
| Graubünden | Progressive tax between 5% and 25%; possible reductions or upcharges depending on length of ownership | Maximum 2%; tax rate set by municipalities |
| Jura | Progressive tax between 0% and 6%; possible reductions or upcharges depending on length of ownership | 2.1% |
| Lucerne | Progressive tax based on income tax rate | 1.5% |
| Neuchâtel | Progressive tax between 10% and 40%; possible reductions or upcharges depending on length of ownership | 3.3% |
| Nidwalden | 12-36% depending on length of ownership | 1% |
| Obwalden | Tax of 1.8% multiplied by the annual tax rate for the municipality; possible upcharges depending on length of ownership | 1.5%, split in half between buyer and seller |
| Schaffhausen | Progressive tax between 2% and 20%; flat rate of 15% from CHF 100,000 profit; possible reductions or upcharges depending on length of ownership | – |
| Schwyz | Progressive tax between 8% and 30%; possible reductions or upcharges depending on length of ownership | – |
| Solothurn | Calculated based on income tax rate; 0-13.7% | 2.2% |
| St. Gallen | Progressive tax between 0% and 11%; possible reductions or upcharges depending on length of ownership | 1% |
| Ticino | 4-31% depending on length of ownership | – |
| Thurgau | 40%; possible reductions or upcharges depending on length of ownership | 1% (paid by buyer; seller is jointly liable) |
| Uri | 4-31% depending on length of ownership | – |
| Vaud | 7-30% depending on length of ownership | 2.2%; municipalities can levy upcharge of up to 1.1% |
| Valais | Progressive tax between 12% and 24%; possible reductions or upcharges depending on length of ownership | 1-1.5% depending on value of property |
| Zug | 11-60%; possible reductions depending on length of ownership | – |
| Zurich | Progressive tax between 10% and 40%; possible reductions or upcharges depending on length of ownership | – |
Information correct as at June 2022, supplied without guarantee.
You can find more information in these detailed articles on property gains tax and property transfer tax.
3. What other costs and fees may be charged?
Apart from tax, you may be required to cover the following additional fees and costs:
Estate agent commission: if an estate agent helped you to sell your home, you will be charged for the service. The commission is usually 2% to 3% of the final sale price.
Notary fees: you will need a notary to transfer ownership of the property to the buyer. This involves drawing up the contract, certifying it and entering the information in the land register. The fee for this depends primarily on what is stipulated by the canton. In the canton of Zurich, it is 0.1% of the purchase price. Some cantons do not stipulate a rate. In this case, you should get some quotes. As a general rule, the buyer and seller share the cost.
Land registry fees: as well as the fee for transferring ownership, there is a charge for the entry in the land register. This fee varies considerably from canton to canton. The buyer and seller usually split the cost, with each paying half.
Possible charges for cancelling the mortgage certificate: if the buyer does not want to take over the mortgage certificate, you can have it deleted – usually for a fee. However, in most cases, it makes more sense to transfer the mortgage certificate to the buyer or use it for a new property.
Marketing costs: if you sell your home without an estate agent, there will still be various fees to cover – as well as many hours of work. For example, you will need to pay for the valuation, professional photos, home staging and advertising.
4. What should I keep in mind when selling inherited property?
If you inherit a property, you’ll face a major decision: should you keep the house or sell it? If you choose to keep the property, you can postpone the payment of capital gains tax. In other words, you only have to pay this tax once the property has actually been sold.
Things get more complicated if you are part of a community of heirs. If the property is transferred to individual heirs, for example, property gains tax should be taken into consideration when dividing the estate. This tax may differ depending on the canton and the value of the property.
Good to know: the amount of inheritance tax you have to pay depends on the value of the estate and how closely you are related to the deceased. Spouses and registered partners are generally exempt from inheritance tax. Often, direct descendants don’t have to pay this tax either.
5. What are some tips for reducing my tax bill when selling a home?
The biggest potential saving is on property gains tax. As a general rule: the longer the house was owned, the lower the tax.
You can also consider deductions including value-enhancing investments such as renovations, estate agent’s commission, the cost of advertising, property transfer taxes, notary fees and any early repayment penalty charged by the bank. Ideally, you should consult a tax advisor directly to find out what deductions you can claim.
This article was first published on 15.06.2021
