Specific Features of Real Estate Taxation in Switzerland

29.01.2026

• Upon a transfer of title to real estate, a real estate transfer tax is levied (Droits de mutation à titre onéreux (DMTO)).
• Real estate property tax (Impôt sur la propriété immobilière)
• Deemed rental value tax base (Valeur locative fiscale)
• If you intend to let the property (which is not permitted for all categories of foreign nationals), you will also need to pay income tax.
• Upon the sale of real estate, capital gains tax is levied (Impôt sur la plus-value à la cession d’immeubles).
• Contact a lawyer for further information

Switzerland operates a multi-tier and fairly complex tax system. Taxes may be levied at different levels: federal, cantonal and municipal. Each level may have its own tax base and its own tax rate.

At the same time, the same tax may be levied at one specific level or at several levels, which requires particular attention within this article.

Below is a brief overview of the key taxes payable in connection with the acquisition, ownership and disposal of real estate, to be taken into account when considering the purchase of property in Switzerland.

Upon a transfer of title to real estate, a real estate transfer tax is levied (Droits de mutation à titre onéreux (DMTO)).

This tax is a cantonal tax. In some cantons, however, it has been abolished (for example, Zurich and Zug) or replaced with corresponding fees/charges. The rate varies significantly depending on the canton: from 1% to 3% of the value of the property being transferred.

As a rule, this tax is paid by the purchaser (this is expressly stipulated in the legislation of the cantons of Geneva, Vaud, Fribourg, Neuchâtel, Jura and Valais), or the payment obligation is formally imposed on the purchaser, but in the event of non-payment the tax authority may also recover it from the seller (for example, in Vaud, Basel-Landschaft, Obwalden, St Gallen and others). The parties may, however, agree in the contract who will bear the tax. This is where savings may be achieved.

Real estate property tax (Impôt sur la propriété immobilière)

This tax may be cantonal or municipal. It does not exist in all cantons (for example, it does not exist in Geneva and Fribourg). A situation is possible where this tax is not levied at cantonal level but is levied at municipal level—this needs to be checked. The rates are quite low— between 0.02% and 0.3% of the tax value of the property.
The tax is payable irrespective of the actual use of the property and the expenses incurred in relation to it.

Deemed rental value tax base (Valeur locative fiscale)

This mechanism is one of the features of the Swiss tax system. A property owner must include in taxable income an assumed (deemed) rental amount which they could have received if they had let their own home. That amount is treated as taxable income.

Formally, this is not a separate tax but additional “income” included in the tax base for income tax. This applies at both cantonal and municipal levels, with each levying its share. As a result, rates vary widely depending on the location of the property.

This regime exists in most cantons, and the amount may reach 0.5% to 1.5% of the value of the property per year. The taxable base is determined by the municipal tax authority, taking into account the type of property, its location, market conditions, the age and condition of the building, and other parameters.

From the deemed income amount, it is possible to deduct mortgage interest, maintenance and repair costs, and property insurance premiums.

If you intend to let the property (which is not permitted for all categories of foreign nationals), you will also need to pay income tax.

Rental income is taxed as ordinary income and included in taxable income.

However, income tax in Switzerland is levied at federal, cantonal and municipal levels, with each level taking its own share.

The federal personal income tax rate is progressive. It depends on the taxpayer’s marital status and whether they have children. It ranges from 0% (for income up to CHF 28,500) to 11.5% for income above CHF 755,200.

A canton may have its own income tax rates. For example, in the canton of Vaud it ranges from 3.16% (for income starting from CHF 10,000) to 14.48% (for income of CHF 1,000,000 and above).

In addition, local municipalities apply their own coefficient, which may increase or decrease the effective tax rate (for example, the combined municipal–cantonal income tax in Lausanne amounts to 78.5% of the overall cantonal income tax rate (for example, for the municipality of Pully—76%)).

Wealth tax (Impôt sur la fortune)

This is an annual tax on the net value of assets owned by an individual. For real estate, the value is taken net of the outstanding mortgage debt.

This tax is levied at cantonal and municipal levels and is calculated on the fiscal value of the property. Accordingly, the allowance (the value below which no tax is payable), the rates (usually progressive) depend on the value of the assets, the canton and the municipality, and also on the taxpayer’s marital status (from 0.1% to 0.5%).

The allowance also varies widely, from CHF 50,000 (in the canton of Neuchâtel) to CHF 154,000 (in Zurich for a married couple). A municipality may set its own allowance amount.

Upon the sale of real estate, capital gains tax is levied (Impôt sur la plus-value à la cession d’immeubles).

This is a cantonal tax. Its particular feature is that the longer the owner has held the property before selling it, the lower the tax rate. However, this is not always the case for all cantons. For example, in the canton of Obwalden the rate does not change depending on the holding period.

This is intended to reduce the number of speculative real estate transactions.

Rates differ significantly depending on the canton. In Obwalden it is 1.8% of the difference between the purchase and sale price, whereas in Basel-Stadt it can reach 60% within the first three years of ownership (then decreasing by 0.5% for each month of ownership until reaching 9% after nine years). In many cantons, the rate also depends on the amount of profit realised (for example, Neuchâtel, Bern, Schwyz and others).

This tax should be borne particularly in mind if you intend first to purchase housing in one canton and then move to live in another, and it is one of the reasons why it is not advisable to rush into buying property in Switzerland.

Determining the exact tax burden when purchasing property in Switzerland is difficult and depends on many factors, from the location of the property to its fiscal value, condition, year of construction and even your marital status.

Therefore, prior to purchase it is recommended to determine the purpose of the acquisition precisely and to consult specialists in order to reduce risks and assess the likely level of expenses.

Our lawyers are ready to advise on Swiss real estate taxation and related investment aspects.

---

 

Authors: Yaroslavna Zadesenskaya, Aleksei Molchanov.