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Old 04.08.2011, 13:16
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Flower has slipped a little
Rolling over of capital gains tax on sale of principal residence to BUILD new house

There is a big discrepancy between the building cost and purchase prices per square meter in Switzerland. Hypothetically, if one bought a house (principal place of residence) for CH0.5M ( CHF0.2 equity & CHF0.3M mortgage) and were to sell this principal place of residence for CHF1M and use the proceeds to BUILD another bigger house (and keep it as one’s principal place of residence), in order to minimise the capital gains tax and maximise the rolling over of capital gains tax, does one need to build a new house:

1. that costs CHF1M to build and can possibly be estimated to be worth a CHF1.5M by local tax authorities? There can be a big gap between the cost of built and final estimated value by tax authorities. Does anybody know how big that gap is in a % range?

2. that is estimated by tax authorities to be worth CHF1M after it is built (e.g. one could use CHF0.7M to built a new house which final estimated value by tax authorities to be CHF1M).

3. using the same amount of equity that one has in the current house, i.e. sale price of CHF1M minus CHF0.3M mortgage, i.e. CHF0.7M to built if one does not want to take on any mortgage?

4. using the original amount of equity that one put to buy the current house CHF0.2M and if one does not want to take on a mortgage?
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