Taxes on the house in Switzerland
Let’s start by explaining that the Swiss system provides, for the residents, a system of taxation at 3 levels:
– Federal taxes (the federal government)
– Cantonal taxes
– Municipal taxes
The first is determined by income, income from the other two and the ‘substance’ (so it is called the Capital represented by savings, securities, property and other valuables).
In practice, the citizen fills in a single statement. The taxable result are subject to the rates cantonal and federal, while the municipal tax is calculated by applying a coefficient (called ‘multiplier’) to amounts due to the State.
Each of the 26 cantons has its own tax legislation, and, within each canton, each municipality has in turn its own multiplier.
By way of example, a single person with no children, who live in rented accommodation and has no assets, residing in Lugano and with a taxable income of CHF 50,000, pays taxes just over 6,000 francs, which will 51% to the State, 41% to the City and 8% to the federal government.
On a practical level – real estate taxes you pay will be once again on three fronts:
Rental value (is incident on income)
In Switzerland, the income split the exploitation of real estate that you have, even when you live them personally. That is to say, if the property is rented to a third party, you pay taxes on the profit derived from the lease, but if primary home was still taxed according to the so-called rental value, which is in addition to income from professional activities, rents and yields. This is one of the peculiarities of the Swiss system and since, for tax purposes, the rental value will be deducted as interest expense on financing and maintenance costs, is as seen in Switzerland a normal family does not have as a priority the repayment of the loan: the absence of a mortgage on the house can be disadvantageous.
As mentioned, they fall into the ‘substance’ (taxed in Switzerland only at the cantonal and municipal) also properties that the taxpayer owns (or of which enjoys usufruct). They are calculated based on estimates of land and buildings operated by a cantonal office. The substance, however, are deduced debts, including mortgages on buildings. If you become a tax, it is taxed at a rate that changes from canton to canton, and the amount that results is applied to the aforementioned ‘multiplier’ to determine how much you will pay to the municipality. This tax is calculated at the real estate on the “estimated value” which on average is around 60/70% of the real value.In Ticino, for example, up to CHF 200,000 in the substance is not taxed; a taxable assets of CHF 300,000 would be taxed at a rate of just under 1.4 per thousand, up to a few million substances in excess of 3.5 per thousand.
The estate tax
In many cantons (more than half), it is also levied a specific tax on landed property. In such cases the rate, which amounts to 1 per thousand in Ticino, is applied to the “estimated value” of the property, without the possibility of deducting the debt.To benefit from the tax revenue immobilare are mostly municipalities, which, in some jurisdictions, they may surrender.
For non-residents: for second homes and holiday homes, the same principles of taxation, but “generally enjoys fewer discounts than at market value.” Even here we must remember