Property gains tax in Switzerland: what you pay when you sell

In short Property gains tax falls on the profit, not on the sale price. Hold your property for a long time and document every value-adding investment, and the tax drops considerably.

What is property gains tax?

Property gains tax is a special tax on the profit from selling real estate. Every canton must levy it, and each sets its own rules. The Confederation levies none.

• Who levies it? In most cantons, the canton. In Bern, Obwalden, Fribourg, Basel-Stadt, Schaffhausen, Graubünden and Jura, the municipality as well. In Zurich and Zug, only the municipality.
• Where? Where the property is, not where you live.
• Who pays? The seller. In most cantons, a statutory lien on the property secures the tax, so as a buyer you make sure the contract provides for its payment.

How the gain is calculated

The taxable gain is the sale price minus the investment costs. These include:

• the purchase price,
• value-adding investments such as an extension, a converted attic or solar panels,
• costs of buying and selling, such as the agent’s commission, notary and land registry fees, as far as the canton allows.

Pure upkeep does not count. A new coat of paint or a replacement kitchen of the same quality does not raise the investment costs.

The holding period matters

Almost every canton rewards holding for a long time and penalises quick resales.

• Short holding period: If you sell within a few years, you pay a surcharge. This is meant to make speculation more expensive.
• Long holding period: The tax or the taxable gain falls with every full year, depending on the canton by half or more.
• Geneva exempts gains entirely once you have owned the property for more than 25 years.

Usually only full years count. Selling a few weeks later can therefore save several thousand francs.

Example: canton of Zurich

In the canton of Zurich the tariff rises in steps. Each rate applies only to the part of the gain within its step.

Surcharge and reduction in Zurich

• Sold after less than 1 year: plus 50 %
• Sold after less than 2 years: plus 25 %
• From 5 full years: minus 5 %, then 3 percentage points more each year
• From 20 full years: minus 50 %
• Gains below CHF 5,000 are tax-free.

Worked example

For the CHF 200,000 gain in the table above, the tariff gives CHF 69,400. After ten full years the tax falls by 20 %, so you pay CHF 55,520. Had you waited 20 years, it would have been CHF 34,700.

Example: canton of Bern

Bern calculates differently. The cantonal tariff turns the gain into a basic tax, which the canton and the municipality each multiply by their tax multiplier. With a long holding period the taxable gain falls; with a short one a surcharge applies. The Bern cantonal tax administration publishes the exact figures.

When the tax is deferred

In some cases you pay no tax on the sale yet. It is deferred until the property is sold later:

1. Replacement purchase: You sell the home you live in and buy a new one in Switzerland within a reasonable period. In about half of the cantons the period is two years.
2. Inheritance and advance on inheritance: The heirs take over the property at its original purchase price.
3. Gift: In all cantons, partly with conditions.
4. Transfer between spouses: Depending on the canton, for example on divorce.

A deferral is not a waiver. When the property is sold later, the tax office calculates with the original purchase price.

Tips for buyers and sellers

• Keep invoices: Every receipt for a value-adding investment lowers the tax later.
• Plan the sale date: Waiting a few weeks until the next full year of ownership can pay off.
• Secure the tax in the contract: As a buyer, ask for part of the price to go straight to the tax office.
• Think about ongoing taxes: Besides property gains tax, income and wealth tax matter. They vary widely between municipalities, as our tax comparison of all cantons shows.

General information, not tax, legal or financial advice. Without guarantee.

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