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Old 28.02.2021, 11:37
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Non-Swiss, non-resident, inherited property and taxation?

Hi,

It's that time of year again where for the past few years I'm being contacted by the Swiss government to pay taxes. I was hoping that someone here might be able to offer me insight on my tax situation, or provide the name of a tax professional (preferably English-speaking) that can advise me on whether I really am liable for paying taxes when I am:
-not a Swiss citizen
-not a Swiss resident
-do not live in Switzerland, left over 20 years ago
-am not renting out any property

I lived in Geneva for about 10 years, many years ago under a 'carte de legitimation' when my family moved there. I never became Swiss, and never had a permis C (some rule about my not having accumulated a certain number of years of residence by the age of 21 and having a father who was a 'fonctionnarie international'). I later moved to the other side of the planet where I work and pay taxes. I'm a US citizen (expat) and also file US taxes.

When my father passed away, the apartment in his name was transferred to my mother's, sister's and my name (50:25:25) as per Swiss inheritance law. My mother continues to live in the apartment, rent-free, of course.

I don't know of anyone else in my situation: someone who once lived in Switzerland but left, was never Swiss or held a permis C, but that inherited part of a property that is not being used as an investment property i.e. I am not profiting financially from the apartment that is partly mine, although that will change in future.

Is anyone here in my situation or does anyone know of someone in a similar situation to mine? Are they being taxed? I'm wondering if it's a mistake that I'm being taxed? Does the AFC not realize that this is an inherited property and that it's not being rented out? I don't recall ever having to notify the AFC that the property was inherited or having to pay any inheritance tax. I could understand if I was profiting financially from the apartment, but I'm not. I don't even have the right to live or vote on any matter in Switzerland.

The most frustrating part is that I can't seem to speak with anyone in the taxation department by phone who is helpful or interested in listening, they just assume I'm liable but just trying to escape paying taxes. There is no contact person that I know of in the department that I can reach by phone or write to. I've tried to contact a Swiss lawyer where I live via the Swiss embassy, but they had no idea about taxation for the canton of Geneva. I don't travel to Switzerland often, and in particular, right now travel is restricted due to covid.

I'd really appreciate if someone here could offer advice or their personal experience or point me in the right direction to get help/advice.

Thanks.
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Old 28.02.2021, 11:51
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Re: Non-Swiss, non-resident, inherited property and taxation?

If the property is in Switzerland, you are taxed as per Swiss rules.

Likewise, for other countries (my wife inherited property in Italy, for example).

You pay taxes based upon your percentage of ownership.

Actually, if it is communally owned, you are liable for 100% and not just your part, in case the others don't pay, which is your case:

"When my father passed away, the apartment in his name was transferred to my mother's, sister's and my name (50:25:25) as per Swiss inheritance law."

Tom
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Old 28.02.2021, 12:06
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Re: Non-Swiss, non-resident, inherited property and taxation?

I guess said apartment is in Geneva? Even if the property isn't rented out, it's worth something, so property taxes are due.

If you didn't renounce to your part, then I am afraid you will have to pay taxes in Switzerland.
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Old 28.02.2021, 12:37
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Re: Non-Swiss, non-resident, inherited property and taxation?

"Likewise, for other countries (my wife inherited property in Italy, for example)."

I don't know Italian laws but is your wife an Italian national? Or does she have Italian permanent residency?
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Old 28.02.2021, 12:40
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Re: Non-Swiss, non-resident, inherited property and taxation?

"If you didn't renounce to your part, then I am afraid you will have to pay taxes in Switzerland."

I'll be selling, not renouncing.
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Old 28.02.2021, 13:12
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Re: Non-Swiss, non-resident, inherited property and taxation?

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"If you didn't renounce to your part, then I am afraid you will have to pay taxes in Switzerland."

I'll be selling, not renouncing.
To sell, you will need the 100% agreement of the others.

Tom
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Old 28.02.2021, 13:12
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Re: Non-Swiss, non-resident, inherited property and taxation?

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"If you didn't renounce to your part, then I am afraid you will have to pay taxes in Switzerland."

I'll be selling, not renouncing.
Then paying property taxes from the date of inheritance till it's sod seems reasonable.
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Old 28.02.2021, 13:11
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Re: Non-Swiss, non-resident, inherited property and taxation?

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"Likewise, for other countries (my wife inherited property in Italy, for example)."

I don't know Italian laws but is your wife an Italian national? Or does she have Italian permanent residency?
No, she is Swiss only, as are the other heirs.

Tom
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Old 28.02.2021, 14:25
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Re: Non-Swiss, non-resident, inherited property and taxation?

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No, she is Swiss only, as are the other heirs.

Tom
Ok, so it didn't matter that she never had permanent residency status in Italy?
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Old 28.02.2021, 13:08
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Re: Non-Swiss, non-resident, inherited property and taxation?

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I guess said apartment is in Geneva? Even if the property isn't rented out, it's worth something, so property taxes are due.

If you didn't renounce to your part, then I am afraid you will have to pay taxes in Switzerland.
I'd presume that your mum would be compensating you for the taxes since she is benefiting from the property? Seems the obvious answer.
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Old 28.02.2021, 13:12
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Re: Non-Swiss, non-resident, inherited property and taxation?

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I'd presume that your mum would be compensating you for the taxes since she is benefiting from the property? Seems the obvious answer.
Doesn't work that way, except by legal agreement.

Tom
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Old 28.02.2021, 13:26
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Re: Non-Swiss, non-resident, inherited property and taxation?

Your nationality is not important. Same rules for Swiss nationals which are not Swiss resident. Thus, it boils down to:

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-not a Swiss resident
-am not renting out any property
Accordingly you are taxed on the imputed rental value (valeur locative) of your share. Most double tax treaty give the country where the real estate is located the taxation rights. W/o a double tax treaty Switzerland has free reign anyway, so nothing changes from Swiss point of view (except that you might be taxed twice in your country of residence).

https://www.handelskammerjournal.ch/...mobilienbesitz
https://www.weka.ch/themen/steuern/i...landswohnsitz/
https://hausinfo.ch/de/finanzieren-k...steuerung.html

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To sell, you will need the 100% agreement of the others.
Not when they only sell their share. Potential buyers are few. Most likely candidates are the other co-owners.
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Old 28.02.2021, 17:26
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Re: Non-Swiss, non-resident, inherited property and taxation?

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Doesn't work that way, except by legal agreement.

Tom
I'm not saying it does - but this is a family.

In this situation I'd just tell my mum this is costing me X CHF / year and she'd reimburse me. This is unlikely to be a huge sum of money.

OP have you not just talked to your mum about it?

Last edited by HickvonFrick; 28.02.2021 at 17:38.
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Old 28.02.2021, 13:19
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Re: Non-Swiss, non-resident, inherited property and taxation?

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I'd presume that your mum would be compensating you for the taxes since she is benefiting from the property? Seems the obvious answer.
Property taxes are only for non-residents, or non-primary housing, so she owes nothing.

Tom
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Old 28.02.2021, 14:28
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Re: Non-Swiss, non-resident, inherited property and taxation?

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Property taxes are only for non-residents, or non-primary housing, so she owes nothing.

Tom
Correct.
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Old 28.02.2021, 14:17
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Re: Non-Swiss, non-resident, inherited property and taxation?

"Same rules for Swiss nationals which are not Swiss resident"

I'm not sure my point is getting across- it's not just that I'm a non-resident of Switzerland. I never held a permit other than a carte de legitimation under a parent and I'm not even allowed to work or live in Switzerland- this has no bearing on my taxation? I'm also a non-resident of the US, but at least I can live there if I wanted to and I can vote.
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Old 28.02.2021, 14:49
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Re: Non-Swiss, non-resident, inherited property and taxation?

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"Same rules for Swiss nationals which are not Swiss resident"

I'm not sure my point is getting across- it's not just that I'm a non-resident of Switzerland. I never held a permit other than a carte de legitimation under a parent and I'm not even allowed to work or live in Switzerland- this has no bearing on my taxation? I'm also a non-resident of the US, but at least I can live there if I wanted to and I can vote.
I am not sure you are listening to the point people are making. Your residency status is not relevant. You own property = you pay tax on it until you own it. This has got nothing to do with whether you were at one point resident or will be in the future. This is common in many countries.
The comparison with the US is irrelevant since you are taxed because of nationality on worldwide income.
In CH (and many EU countries) you will pay property tax on property you own regardless of residence or nationality. If you did become a resident this tax may change depending on the local taxation rules.
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Old 28.02.2021, 15:11
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Re: Non-Swiss, non-resident, inherited property and taxation?

Point taken, thanks for clarifying that my residency status -at any time- is not relevant to taxation of an inherited property.

Speaking of worldwide income, are the Swiss allowed to inquire about my worldwide bank accounts? It's on my Swiss tax form but doesn't seem to be a compulsory question.
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Old 28.02.2021, 15:59
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Re: Non-Swiss, non-resident, inherited property and taxation?

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Point taken, thanks for clarifying that my residency status -at any time- is not relevant to taxation of an inherited property.

Speaking of worldwide income, are the Swiss allowed to inquire about my worldwide bank accounts? It's on my Swiss tax form but doesn't seem to be a compulsory question.
Switzerland uses worldwide income to determine taxation rate to be applied to income that is taxable in CH.

So for example, if you rented the flat and generated income in CH, they would use your worldwide income.to determine the tax rate and then apply it to the income generated by the rent.
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Old 28.02.2021, 17:12
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Re: Non-Swiss, non-resident, inherited property and taxation?

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Switzerland uses worldwide income to determine taxation rate to be applied to income that is taxable in CH.
As always in Switzerland: It depends on the canton. In canton Aargau, only the local net income of the property is relevant (for a non-resident).

If no rental income is generated the imputed rental value is used as income. Imputed rental income is in the range of around 60 - 70% what a comparable objects makes on the market. If the property is rented out and it generates less than 50% of the market value the imputed rental value might be used instead. Maintenance costs and mortgage interest can be deducted.
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