Fees and taxes todo

Which fees have to be paid to the state when a piece of property changes hands?

by Gabi Hophan and Gergina Hristova

When a piece of property changes hands, fees must be paid to the state. These vary by canton; for instance, in the Canton of Zurich they amount to 3.5 per mil of the sales price (1 per mil to the notary and 2.5 per mil for land register fees). As a rule, these are split in half by the buyer and seller.

Real estate transfer tax

The real estate transfer tax likewise differs by canton. In most cantons (among others, Zurich), however, it has been abolished. If it must be paid, as a rule it is split in half.

This tax is not imposed upon sales or transfers among parents and children or foster children, among step-parents and stepchildren, among parents-in-law and their in-law children, among grandparents and grandchildren or between spouses.

Real estate profit tax

The amount of real estate profit tax depends on the length of possession, differs from community to community, is subject to the cantonal real estate profit tax and is paid exclusively by the seller. The real estate profit is determined as the amount by which the sales proceeds exceed the actual costs (purchase price plus costs of improvements).

If the sales proceeds of a property which has been used continuously and exclusively as the owner's residence are put to use within a certain period of time to acquire a replacement property in Switzerland which is at least as expensive and used for the same purpose, the real estate profit tax is not charged (cf. «Replacement purchase»). If the existing property has been owner-occupied sufficiently long (Canton of Zurich, 20 years), this tax is lower.

Replacement purchase

Anyone who sells their own home and plans for a replacement should, at the time the existing residence is sold, inform the previous community of residence in writing about the planned replacement purchase. The community can then indeed assess the real estate profit tax, but it is postponed for the time being. The replacement purchase must not be made immediately. In the period between the sale of the old home and the purchase of a new one, a certain amount of time may pass (regulations differ by canton).

Important note for the buyer

Should the seller be insolvent after concluding the purchase and sale agreement, the buyer is left responsible for the real estate profit tax. Therefore it's recommended that the buyer have the corresponding amount guaranteed, e.g.by taking a deduction from the sales price and transferring it to the account of the tax office by means of a direct payment.