Taxes

The market value of a property is usually determined by expert estimates that take into account both the location and the condition of the property. However, the actual selling price may vary, influenced by subjective factors such as buyer preferences or sales pressure.

Homeowners pay taxes on the imputed value of their apartment as a notional rental value. There are plans to abolish this as well as the property maintenance deduction soon.

Real estate held in private assets allows a lump-sum deduction for maintenance costs, unless the use is predominantly business-related. A federal court ruling confirms that when used for business purposes by third parties, only actual costs are deductible.

In Switzerland, when transferring real estate, in addition to the property gains tax, a transfer tax is often due, the amount of which usually depends on the purchase price. Taxation is regulated by the cantons, and some cantons do not levy a transfer tax.

Deposits into the pension fund are subject to a three-year blocking period for tax savings. However, exceptions apply in the case of divorce, as a federal court case shows.

The tax residence is determined at the place of the center of life, based on objective living conditions. The Federal Court confirmed that for a non-self-employed person over 30, who has lived at the place of work for more than 5 years, the center of life is there.

The Swiss Parliament has adopted Tax Proposal 17; changes will take effect from 2020. However, a possible referendum could still stop the proposal.

The Swiss value-added tax law allows companies to calculate VAT based on agreed or actually received fees and to choose between actual taxation, balance rate taxation, or flat-rate taxation. Companies can settle the tax based on the invoice date or the date of payment receipt, which affects liquidity.

The motion for tax privileges for startups was adopted by the Council of States. The Federal Council now has two years to develop a solution.