A guide to Swiss tax for property investors

Switzerland has become a popular country for investors as well as those looking for a second home, with this country offering a high living standard in addition to great business opportunities. Despite the tight restrictions on foreigners moving to Switzerland, especially for those who are not a member of the EU, the country actually has a very high percentage of non-Swiss residents.

Despite Switzerland being a small country, it is, in fact, a very diverse region both in terms of its people and geography, meaning your experience will depend on which part you visit or decide to reside in. Those who choose to move will discover that all the neighbouring countries have a strong influence on the Swiss culture; French, German and Italian traditions still live on in parts of the country.

While Switzerland offers its residents and visitors a moderate climate, those in the south can benefit from a Mediterranean influence regarding temperatures. However, you can experience more precipitation than the rest of country, and this is due to the mountains which block the way of rain clouds to the north of the country.


Switzerland has strict regulations about the purchase of properties by foreigners. However, you can buy a property if the following applies:

  • You are an EU of EFTA (European Free Trade Association) national with a Swiss residence permit who resides in Switzerland.
  • You hold a Swiss C Permit.

However, if you want to stay in Switzerland for more than 90 days, you will need a residence permit.

There are different permits available depending on your requirements. Typically, the majority of individuals from abroad will apply for a renewable B permit that allows them to live in Switzerland and also work, if they wish.

B Permit holders are allowed to purchase any property without having to apply for a separate permit.

EU citizens are also allowed to purchase in addition to their residence, further homes that would not be used as a primary dwelling but as, for example, holiday homes. However, the number of properties available to foreign buyers is limited by the Swiss Government.

In both of these cases, you will have same rights as a Swiss citizen to purchase a property; this means that you can buy a business premises, investment property or a holiday home, as well as a primary residence.

Second home owners are liable to annual taxes, which amounts to about 1.3 % of the purchase price per annum. This figure consists of several small taxes including land tax, tourist tax and wealth taxes. Also included is a tax on estimated rental income from the property regardless of whether the property is rented out during the year.

Taxes are paid to three bodies:

  • The Swiss Government (Federal tax)
  • The Canton (Cantonal tax)
  • The Commune (Communal tax)

Views near our Swiss property for sale

Property transfer tax

Property transfer tax is usually paid by the buyer of the property, as are most of the costs of the transaction. It is set at a cantonal level, meaning it varies in each of Switzerland’s 26 cantons.

Capital Gains Tax

If you decide to sell a property, you will be subject to Capital Gains Tax if you have made a profit from the Swiss property market. This does not apply if you are reinvesting in a Swiss property of equal or higher value, only if you are leaving the country or buying another property which is valued at less than your current property sale price. Capital Gains Tax rates vary from one canton to another, and how long you have owned the property is also taken into consideration. For this region, it is hard to outline a tax percentage on a property’s profit, but the system is intended to discourage those looking to make a quick profit. However, value-adding renovations and improvements to a property can be offset against Capital Gains Tax.

Tax on homeownership

If you are a homeowner in Switzerland, you must pay income tax on the equivalent rental value of your property. However, mortgage interest rates are fully deductible, and maintenance expenses are sometimes partially deductible.

  • Cantons tax on property (also known as land or real estate tax).
  • Property transfer tax is normally collected when you buy property.
  • If you own an apartment, a house or land, you must declare it on your tax return, and you are liable to pay wealth tax on it.

Foreign exchange gains and losses

Switzerland does not offer tax gains made on disposal of an investment, personal or business assets with the exception of real estate owned in Switzerland.

As mentioned above, the rules and rates for capital gains on the disposal of real estate vary from canton to canton and depend on how long the property has been held for. There is no federal income tax on capital gains.

As discussed in one of our previous posts, you will have to declare any overseas income to HMRC; you can find out more about it here.

If you are looking for Swiss real estate for sale, contact us today to find out how we can help you with your international property purchase.

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