Property selling costs.

Accomodation, House and Garden
1
Hi all

Has someone recently sold a house and has a rough breakdown of the various outgoing? Items such as agency fees, notary, Gemeinde, mortgage fees etc...

Would be helpful to cost up what our costs would be if we sell and buy elsewhere such as in Zug or Baar.

2
Agency fees will be whatever you agreed with them in your agreement Notary fees are often set by the canton as a percentage of the value of the

property you are selling. Who pays varies from canton to canton. In Aargau the seller/buyer split notary costs 50/50. In Ticino it seems the buyer pays the entire amount. The Notary may well deduct a percentage of the sales price to be held by the Gemeinde as Property Gains Tax. You will have to fill out a tax form and this will determine whether you get any of the money back or have to pay more. Mortgage fees again will depend on your agreement and notice period with your bank. If you are buying a new property, you may just be able to transfer the mortgage to your new property.

3

To provide figures for Snoopy’s comments:

1- Real Estate Agent: Minimum is like CHF 10’000, maximum 3%. But if you are selling a place in Zurich, you can also list it yourself, it should sell very fast and you would not pay a fortune for an agent.
2- Transfer fees: This seems to be really low in Zurich (0.2%?)
3- Real Estate Capital Gains Tax - this one is hefty
https://www.zh.ch/content/dam/zhweb/…B-Nr-225-1.pdf

4
Literally just sold a property last week.

3% + VAT agents fee.

CHF 15,000 notarial act and stamp duty (or whatever it's called here) paid in full by the buyer.

Deducted 4% to cover potential property gains tax. When the sum is agreed by the tax office, the lawyer will refund the difference to us.

We will also pay an amount to our own lawyer who will follow the sale, but this is not really necessary. It just removes an element of work that we would have to do.

In addition, though not due till December 2022, we had to pay the full amount of the Federal Tax based on our personal taxation, up front. Could probably argue it as this is just one of the properties owned, but not really worth the hassle.

Interestingly, we had a small mortgage on the property which expires end of 2025, at 1.1% The penalty to repay amounts to just 0.37% of the principal times the remaining time. Not sure how it's worked out to be honest, but it seems very fair.

5
I was told by my tax person that you only pay capital gain if you cash in but if for example I sold and bought a more expensive property that it would get carried over?

6

Correct but within 12 months i believe.

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I know the OP is talking about Zurich, but in Ticino, agent fees are often between 4-5% and I would certainly try to sell by yourself. We have done it four times successfully and an agent could not have added any more value, but... you need to have your ducks in a row and have all necessary information such as the extract from the land registry and an official lot plan (Katasterplan).

8
That's correct, but in many cases the notary will still deduct a percentage at source (required by the cantonal regulations) which will be held by the Gemeinde until you have filed. You have, IIRC, two years after you sell to buy another property, or you can buy three years before you sell to counteract the gains tax (or vv, not quite sure).

9
Interesting that you only had to pay a third of the total amount of the outstanding mortgage payments.

I was told, verbally, by my lender I'd have to repay 100% of the outstanding payments if I sold early.

But I vaguely remember hearing that there is an applicable 'law' about what is due ?? Anyone know anything ?

10
You can always take your mortgage with you - within Switzerland. Or pass it to the next buyer, if you have competitive terms.

Capital gains tax (Grundstuckgewinsteuer) on sale was estimated for us by the local tax office after completion of a long form. A bill sent, not paid and then cancelled when we completed on the next place with a couple of weeks overlap.

Again this tax is avoided only when buying the next property within Switzerland...

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If anyone would have more info about that part I'd be glad to learn more.

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https://www.credit-suisse.com/ch/en/…en-201901.html

As you can see, even here the deferment periods are regulated by the cantons, so may vary.

13
It is 24 months in VD.

14
But carried over does not mean you don't pay. Eventually somebody will have to pay that money

And the next property should always be more expensive, once you buy one which is cheaper, BAAM

15

No because after a certain (lengthy) period of time the tax becomes less, it is on a sliding scale

16
No it does not work like that.

Example:

You bought a property for 100K, sold for 150K; the capital gains tax is calculated based on when you buy, vs when you sell, etc. (no surprises there). Let's assume the tax is 30% (you sold one year later in VD, max tax). So you need to pay 15K in taxes. However, you bought a new property for 200K. So your 15K CHF tax debt is carried over.

10 years later, you sold the second property for 500K. But you have lived in it for 10 years and thus the minimum tax of 7% applies (again VD). That means you owe the government (500-200)*0.07 = 21K in taxes. Your final tax bill will be 36K, the 21K you owe from this property PLUS the 15K from the previous property.

The property tax is calculated when you sell your place, and it does not decrease after that. I have bought and sold several properties in Switzerland, and that is how it applies to the individuals. That is the reason why I started using a company after the second purchase.

17
We looked at selling in Zug late last year. Family house that the agent would sell quickly. Selling costs were 3% - a sizable amount. You have to pay the capital gains tax before you get your funds cleared.

18
Correct, but it has to be your principal residence that you're selling and then buying. You can up-size or downsize the rule still applies.

Also, all the buying and selling costs, plus any capital improvements you have made, can be deducted from the gain.

In my case, it was not our principal residence and anyway, we've had the property for such a long time that the taxable gain will be a low single percentage.

19

Caveats:

  • this tax is a cantonal thing. While the way this tax is calculated has been harmonised, some differences persist.
  • this is about the self-inhabitated main residence only, not about for-rent properties or holiday homes or whatever
    Actually it does (assuming VD isn’t the exception that confirms the rule). The carryover isn’t the tax amount due (15k in your example) but the capital gain itself, and the applicable effective tax rate is degressive over time in most cantons.

Further, if you move to another canton, that (different) tax rate that applies to the old capital gains as well. The parameters of the calculation have been determined in the past, some of which may lapse, but the actual calculation doesn’t happen until the tax comes due.

See this official example calculation (section 5) by Kanton Thurgau ( this page will be interesting as well). The example talks about the capital gain only, as opposed to the resulting tax amount. Of course the postponement will result in a lower effective tax rate in most cantons. Further, the actual amounts disappear into the fog of oblivion and lapse after 20-30 years, when they get replaced by certain higher and thus more favorable values.
Nope, it can indeed mean that the tax amount that would have had to be paid without the postponement is never actually due. We’re talking about postponement by decades.

20
It is not just about the property cost itself. We bought a house that was, on paper, less expensive than the one we sold. Out situation was rather complicated as we had a house and building land. The building land was sold separately, then the house. Capital gains on land cannot be carried forward.

If you have many deductions from the house you have sold which fall under capital gains (these would be things you could not have deducted from your taxes as repairs or replacements) then you can possibly close the gap between the property you have sold and the one you purchase. For example, a pool, that would be a rather expensive deduction from the capital gain. Aesthetic improvements in the garden, which can be quite costly, may also be applied to reduce the capital gains.

If you obtain a copy of the capital gains tax form from the relevant canton, you can input the numbers and get a fairly good idea of the sums. There should also be a publication which explains what deductions are allowed. Some of these deductions are open to interpretation. We appealed our assessment as initially some of our deductions were not allowed. So it it is not always as straightforward as one might think.

I will give an example. We replaced 2 Velux windows in the roof. At the time we replaced them, we didn't buy any additional items to stop the sun or insects, just inside window coverings, but they weren't enough to stop the heat. So we bought Velux sunshades which are built into the frame of the window (you have to remove some original parts to install them). And we installed Velux window screens on the inside of the house. Well you guessed it, all of this was rejected initially. Why? Because they claimed the items could be removed. Theoretically, yes. But they were improvements, and in our opinion, not like a light fixture, which you could remove. In hindsight, we should have ordered all the "extra" items at the time we ordered the replacement windows and claimed the whole thing on the annual taxes as a "replacement".