Property tax, or land or real estate tax as it is otherwise known, is a cantonal or communal tax on land and buildings. It is payable by those who are recorded in the land register as the owners or users of a property.
The tax is calculated on the full value of the property, so disregarding any related debts or mortgages, and is applied at its location irrespective of where the owner resides. Certain cantons do not levy this tax while the rest apply a variety of systems. Rates usually range from 0.05% to 0.3%.
Capital Gains Tax
When reselling, the property is subject to an appreciation tax.
The taxable profit is the difference between the sale price and the total purchase price (in Switzerland the purchase price is not indexed to the cost of living), including fees and property improvements. Deductions can be made for real estate agency commission and other costs.
The rate of the capital gains tax decreases with each year of ownership, starting at 30% and decreasing to 9% after 10 years and 1% after 25 years.
Tax on Rental Income
In Switzerland, rental income is taxable at the federal, cantonal and communal levels. Admin costs, maintenance and improvement costs, as well as interest payments on related loans, are deductible from the taxable amount. The rates of the federal, cantonal and municipal income taxes are then applied. This amount can vary depending on the canton and the scale of the rental income.
If you rent out your Swiss property to guests they will need to pay a daily tourist tax that covers tourist infrastructure such as transportation, information services and cultural performances. Swiss citizens staying in a town where they don’t have permanent residence have to pay the tax too.
The amount is slightly different from town to town and also by type of accommodation. For example, campsites are cheaper than hotels and holiday homes. The amount is set by the local authority, not the owner of the accommodation. A typical amount is CHF 2.50 per person per night.
Find out more about the Swiss purchase process here.