Calculate Zurich property gains tax: what is left from your sale?

Property gains tax in Zurich is worked out in three steps. First, the gain: proceeds minus investment costs (Anlagekosten).¹ These are the purchase price plus eligible expenses. Second, the basic rate: 10 per cent on the first CHF 4,000, rising to 40 per cent above CHF 100,000. Third, the holding period: it raises or lowers that amount. There is no municipal tax multiplier.

Only expenses from the relevant period of ownership count, that is, since the purchase that counts for the tax.¹ Pure maintenance does not count here. Today it can only be deducted from income tax.⁶ So repainting does not lower the gain, but an extension does.

What this means for you: find the old purchase contract and the invoices for alterations. Every accepted invoice lowers the gain. Does your gain stay above CHF 100,000 even after deductions, and have you owned the house for twenty full years? Then each accepted franc saves 20 centimes in tax.

If the relevant purchase was more than 20 years ago, you may use the market value instead of the old purchase price.¹ It is an option, not an obligation. The law sets no flat rate or formula for it.

An example with our own figures: bought in 1985 for CHF 400,000, sold today for CHF 1,500,000. Twenty years ago the house was worth CHF 700,000. Using the old purchase price, the sale costs CHF 214,700 in tax. Using the market value, it costs CHF 154,700.

What this means for you: with an old purchase, the comparison is worth making. Enter the purchase price once and the market value once in the calculator above. The law does not say explicitly whether older investments still count. Likely only those from the last 20 years count, as older ones are part of the market value. Ask the municipal tax office. For an inherited family home, your parents' purchase usually counts.

Did you use your house or flat permanently and exclusively yourself, lately as your main residence?³ If you then buy or build a home used the same way in Switzerland within a reasonable period, the tax is deferred.¹ The period is usually two years.³ Buying before the sale can also count if the two are connected.³

The tax is only fully deferred if the new home costs at least the proceeds. Official example: sale CHF 1.5 million, investment costs CHF 1 million, new house CHF 1.32 million. CHF 180,000 is taxable at once; after ten years of ownership that means CHF 49,120 in tax.³ If it costs no more than the investment costs, there is no deferral.³

What this means for you: deferred is not waived. Sell the new home later without another replacement, and the deferred gain is taxed too.³ Apply for the deferral before the tax assessment becomes final.³ Enter the new home's price in the calculator above.

The seller is liable for the tax.¹ Property gains tax is levied by the municipality.¹ All of the revenue goes to the municipality where the property is located.⁴ But the canton sets the rates, with no tax multiplier. So the same gain costs the same in every Zurich municipality.

The transfer of ownership (Handänderung) is the change of owner at the sale. Within 30 days of it, you file the tax return with the municipal tax office. This deadline can be extended.¹ The tax falls due on the 90th day after the transfer; interest runs from day 91.⁵ The Canton of Zurich has not charged a property transfer tax since 2005.⁷

What this means for you: have the purchase contract and receipts ready before the notary appointment. Then there is enough time for a complete return. What else a sale needs is in the list of documents for selling.