Information on acquiring property in Switzerland for those resident abroad.
| 1) Annual co-property charges It is commonly estimated that the annual running costs of a building are usually between 0.9 % and 1.1 % of the purchase price. They could be higher if the property is old and needs renovation. These costs are divided up proportionately per the thousandths of each building. These expenses include:
The manager (of the co-property) collects the relevant amounts to cover the total expenses incurred by the building, which are payable in advance quarterly or half-yearly. 2) Taxes Taxes are paid to three bodies :
For individuals, only the property located in the Canton of Vaud and its income (rental revenue) are taxable. All other income and wealth are taxable in the place of residence of the owner. However, all such holdings must be declared to the tax authorities to determine the rate of the total taxes unless the owner accepts to be taxed on a flat-rate basis which can be sometimes more advantageous. The FISCAL VALUE of the property is used to determine the TAXABLE WEALTH (80% of the purchase price). The RENTAL VALUE is equivalent to the amount the owner should pay for renting a similar property. This constitutes the basis of the TAX ON INCOME. The following taxes are in addition to the above :
Taking into consideration the aforementioned details, obviously variable, experience shows that the total taxes amounts approximately to 1.385 % of the purchase price of the property. 3) Rental and rental income Our company can deal with the management of your property. For rentals, we recommend the company INTERHOME whose offices are adjacent to our management company. The experience proves that the RENTAL RETURN should allow you to cover approximately all the costs of the property (co-property charges and taxes). In this case one has to make the sacrifice to make the property available for rent during the high season. BREAKDOWN OF THE CALCULATION OF TAXES
This estimation allows the calculations of the property tax and the Cantonal and Communal tourist taxes (taxe de séjour).
a) flat rate : 1,7 o/oo of the Land Registry Fiscal Value, min CHF 350.--, max CHF 750.— b) per night : adults CHF 3.30, and children (10 to 16) CHF 1.25 Tax on income : (flat-rate offered to non-residents) a) Cantonal tax : Land Registry Fiscal Value x 3% x 11% x 122% b) Communal tax : Land Registry Fiscal Value x 3% x 11% x 90% Rental revenue : Land Registry Fiscal Value x 3% Tax on wealth : (flat-rate offered to non-residents) Taxable fortune 50% of the Land Registry Fiscal Value a) Cantonal tax : taxable fortune x 3.3 o/oo x 122% b) Communal tax : taxable fortune x 3.3 o/oo x 90% - Direct Federal Tax : rental revenue x approx. 10% Example for an apartment costing Fr. 600,000.--
Total taxes 8’314.45 which is about 1.385 % of the purchase price Experience shows that sometimes these amounts can vary in reality. |