In 2018, tax revenue in Switzerland was distributed as follows: The federal government received CHF 70 billion, the cantons CHF 48 billion and the municipalities CHF 30 billion. These figures show how important taxes are for the levels of government in Switzerland. Property tax, levied by the cantons and municipalities, plays a major role in this.
There was an important change to the tax system in 2020. The “Tax Reform and AHV Financing” (STAF) was introduced. This reform introduced new rules for companies. It was adopted in a referendum on May 19, 2019 with 66.4% approval.
According to Article 3 of the Federal Constitution, each canton in Switzerland can decide on its own taxes. This also applies to property tax. There are different tax rates and rules in the 26 cantons and almost 2000 municipalities.
Key findings
- Property tax is an essential part of Switzerland’s federalist tax system.
- Fiscal income in 2018 showed clear differences between the Confederation, cantons and municipalities.
- The “Tax Reform and AHV Financing” (STAF) introduced new taxation rules in 2020.
- Each canton has autonomy in tax collection in accordance with Article 3 of the Federal Constitution.
- There are considerable differences in tax rates and regulations between the 26 cantons and almost 2000 municipalities.
Principles of property tax in Switzerland
In Switzerland, property tax is an important tax for real estate owners. It is determined differently by the cantons and municipalities. The amount of tax depends on local regulations.
Definition and meaning
The Swiss property tax applies to all taxes on land and buildings. It is based on the total value of the property. It does not matter how much the owner earns. In some cantons, such as Zurich and Zug, there is no property tax. However, others, such as Bern and Jura, raise them.
Legal basis and competent authorities
The rules for property tax are set out in the tax laws of the cantons. This means that regional authorities are responsible for this. Some cantons, such as Graubünden, Vaud and Geneva, have this tax. Others, such as Schwyz and Basel-Landschaft, do not. Lucerne and Thurgau offer a minimum tax if it is more favorable than other taxes.
Differences between cantons and municipalities
In Switzerland, the federalist tax system results in major differences in property taxation. Each region can determine its own tax policy. This depends on their own needs.
Anyone who lives in Switzerland and owns a property is subject to various taxes. These are incurred during ownership.
Cantonal differences
Taxes vary greatly between the cantons. The property tax is usually between 0.3 and 3 per thousand of the property value. This has a major impact on tax revenues.
Each canton has its own rules for property gains tax. Transfer tax is payable on every property sale.
Community-specific regulations
There are many special regulations at municipal level. Municipalities set their own tax rates, which may differ from cantonal requirements.
This is how the imputed rental value of rentals is taxed. The rental value of the property is taxed irrespective of benefits. This shows how taxes can vary from place to place.
Federalist tax system in Switzerland
The federalist system gives cantons and municipalities a great deal of freedom. They can make their own tax laws. This is particularly evident in the case of property tax on real estate.
The property tax is levied on 60-80% of the real estate market value. This has a major impact on the annual tax burden. The self-determination of the cantons and municipalities results in tax diversity.
Let’s compare some of these differences in a table:
| Canton | Property tax | Property gains tax | Property tax |
|---|---|---|---|
| Zurich | 1.2 ‰ | 20-25% | 70% of the market value |
| Geneva | 2.6 ‰ | 25-30% | 75% of the market value |
| Berne | 0.8 ‰ | 15-20% | 80% of the market value |
Switzerland’s federalist tax system adapts to regional needs. This leads to the various tax regulations.
Calculation of property tax
Calculating property tax in Switzerland is not easy. There are many factors that play a role. For example, the taxable value of a property is determined in various ways.
The location of the property and the tax rates of the cantons or municipalities are decisive. Both the capitalized earnings value and the market value are important here.
Principles and evaluation procedures
To understand the tax, you need to know a few things. The basis for the calculation is the full value of the property. The property tax calculator can help you determine the tax due.
Relevant factors for the calculation
There are several important factors when calculating property tax:
- The exact location of the property strongly influences the tax rates.
- The value of the property is determined by various methods.
- Cantonal and municipal tax rates vary considerably.
In some cantons, natural persons pay direct property taxes. Others do not have such taxes. Different regulations lead to different tax rates.
In St. Gallen, for example, there is a municipal tax of 0.75 per thousand for residents. The many differences in the Swiss tax system make the tax calculation complicated. The property tax calculator helps you to find the exact amount.
Real estate tax comparison: Switzerland and abroad
Real estate taxes in Switzerland are not easy. They are different than in many other countries. One major difference is the number and type of taxes. In Switzerland, the property tax is between 0.3 and 3 per thousand of the property value. This tax is determined by the cantons themselves. But there are exceptions. For example, cantons such as Aargau and Zurich have no property tax.
Swiss real estate tax vs. European real estate transfer tax
In Germany, you have to pay land transfer tax when you buy real estate. Switzerland has a more diverse tax system. There is also the property gains tax. This tax is paid on the profit from the sale of a property. How long you have owned the property affects the tax rate. Each canton in Switzerland has its own rules. In addition, there is usually a transfer tax on the change of ownership. Only Schwyz does not have this. Normally the buyer pays this tax. In some cantons, however, buyers and sellers share them.
International taxation practices and local differences
Real estate taxes vary greatly around the world. Switzerland has a complex system. In France and Spain, for example, there is a cadastral tax. These countries also have special taxes for non-rented properties. Foreign investors in Switzerland must also pay attention to wealth and income taxes. These taxes vary depending on the canton. Certain costs may be deducted. For example, for maintenance or energy-efficient conversions. This can reduce the tax burden.
For more information and details on taxes, see this page.