Switzerland Fact-File Part 7:
Individual Business Owner Welfare and Lifestyle

7.8 Switzerland Domestic Real Estate

Domestic Real Estate and its Tax Treatment

Fees are involved when buying a property (Transfer Tax) and these can be imposed at up to 3.3% of the property value. Canton Zurich does not impose transfer taxes.

Once a property owner, an annual property tax is levied by cantons at between 0.02% and 0.3%, depending on the location of the property. There is no land stamp duty in Switzerland.

Although there are a number of situations in which capital gains tax is not imposed on the sale of property at federal level, some cantons may impose CGT on the sale of real estate, in place of imposing municipal or cantonal income tax.

Those in possession of a class C resident’s permit may buy a holiday home in tourist areas. Citizens of the EU who are also full Swiss residents may purchase a property without restrictions, whether for private use to rent out as a commercial let. Other Swiss residents may buy a property solely for their private use.

The sale of private property is not subject to federal capital gains tax (as previously stated), and profits from the sale of business property are taxed as general income.

Although there are many properties for sale in Switzerland, but the aforementioned restrictions make it essential to identify those areas in which a property may legally be purchased by those who are not full residents. Once a person is a full-blown Swiss resident on a permanent residence permit, all restrictions to property ownership will be removed.

In 2010, each canton is afforded the power to establish its own foreign property laws, with the intention of making purchasing a property a quicker procedure. Prices of property compare favourably against those in other major European countries like the UK and France and indeed continued to rise during 2009.

All property transactions in Switzerland must be notarized.