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Old 27.12.2007, 16:24
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Q related to selling/buying property and taxation

Hi,

I will sell property in canton Vaud and buy somewhere in, likely, canton Zurich.

I understand that I can carry my profit into Zurich without having to pay tax in Vaud if I reinvest it all.

My question: how much time can there be in between selling and buying, e.g. for how long can I keep the cash in my account without it being taxed. I only ask so I know how long I've got to find another property...

Thanks in advance for your reactions.
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Old 27.12.2007, 16:26
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Re: Q related to selling/buying property and taxation

I think this is such an important question and could potentially make you liable for 40% of any profit on sale - or nothing at all - that you should get a definitive written answer from your local community tax office before proceeding...
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Old 27.12.2007, 20:02
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Re: Q related to selling/buying property and taxation

You don't get all of the money in your account. The notaire will take 40% (or all??) of the profit. then when you prove you don't owe that money to the tax people, they will give it back to you.
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Old 27.12.2007, 21:08
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Re: Q related to selling/buying property and taxation

If anyone could provide a more comprehensive answer, much appreciated.
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Old 31.12.2007, 22:18
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Re: Q related to selling/buying property and taxation

2 years you have to find a place in switzerland I read somewhere
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Old 31.12.2007, 23:42
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Re: Q related to selling/buying property and taxation

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Hi,

I will sell property in canton Vaud and buy somewhere in, likely, canton Zurich.

I understand that I can carry my profit into Zurich without having to pay tax in Vaud if I reinvest it all.

My question: how much time can there be in between selling and buying, e.g. for how long can I keep the cash in my account without it being taxed. I only ask so I know how long I've got to find another property...

Thanks in advance for your reactions.
The process of what happens to the money is different by canton. The rules however are not. On the selling of your house the money is split into 2. Assuming the house realizes a profit, the original value of the house is returned to you/the bank free of any tax. The remaining money is liable for tax at a rate which varies from close to 100% down to peanuts dependent on how long you have owned the house and the canton you live in.

However under certain quite strict conditions it is possible to ***postpone*** payment of any tax on profit from the sale of the house IF a substitute house is bought somewhere in Switzerland. From here on I will use old and new to represent the houses...

Here are the key points of the conditions:
The new house must cost more than the original price of the old house. If it does not cost more than the sale price of the old house then it is subject to tax on the difference ie monetary win.
The new house must serve the same purpose as the old house. This bit is too complicated to go into detail save to say, you need to use 100% of it to live in as your primary residence.
Neither old nor new house may be a second home or a holiday home nor may it be a block of several houses some of which are for rent.
The owner of the new house must be the same as the owner of the old house (there are exceptions here but generally...)
The start of the purchase of the new house must take place within a reasonable period (ie it is not fixed at 2 years). Generally this reasonable period is determined to be 2 years

So assuming you meet the criteria (ie you sell your house and go and buy another one to live in) you can claim a postponement in the payment of taxes. This bit is handled differently. Some cantons tax you anyway and then ask you to claim it back. Some cantons request that you declare this in advance and then the money stays with the notar. Some cantons allow you to transfer the money into a locked bank account. No cantons allow you to walk off with the loot in a normal savings account...

A rather large point to note here. I have consistently used the word postponed. That is exactly what happens. If the next property is sold within a period of 20 years then the tax is due. Don't think they will forget they won't. Your land registry entry has a lien attached to the property

If you have any questions that are not specific to the semi-socialist republic of Vaud then I will be happy to answer them.
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Old 31.12.2007, 23:44
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Re: Q related to selling/buying property and taxation

Quote:
View Post
The process of what happens to the money is different by canton. The rules however are not. On the selling of your house the money is split into 2. Assuming the house realizes a profit, the original value of the house is returned to you/the bank free of any tax. The remaining money is liable for tax at a rate which varies from close to 100% down to peanuts dependent on how long you have owned the house and the canton you live in.

However under certain quite strict conditions it is possible to ***postpone*** payment of any tax on profit from the sale of the house IF a substitute house is bought somewhere in Switzerland. From here on I will use old and new to represent the houses...

Here are the key points of the conditions:
The new house must cost more than the original price of the old house. If it does not cost more than the sale price of the old house then it is subject to tax on the difference ie monetary win.
The new house must serve the same purpose as the old house. This bit is too complicated to go into detail save to say, you need to use 100% of it to live in as your primary residence.
Neither old nor new house may be a second home or a holiday home nor may it be a block of several houses some of which are for rent.
The owner of the new house must be the same as the owner of the old house (there are exceptions here but generally...)
The start of the purchase of the new house must take place within a reasonable period (ie it is not fixed at 2 years). Generally this reasonable period is determined to be 2 years.

So assuming you meet the criteria (ie you sell your house and go and buy another one to live in) you can claim a postponement in the payment of taxes. This bit is handled differently. Some cantons tax you anyway and then ask you to claim it back. Some cantons request that you declare this in advance and then the money stays with the notar. Some cantons allow you to transfer the money into a locked bank account. No cantons allow you to walk off with the loot in a normal savings account...

A rather large point to note here. I have consistently used the word postponed. That is exactly what happens. If the next property is sold within a period of 20 years then the tax is due. Don't think they will forget they won't. Your land registry entry has a lien attached to the property

If you have any questions that are not specific to the semi-socialist republic of Vaud then I will be happy to answer them.
Forget to mention that this law is relatively new. Prior to 1999/2000 the tax postponement only applied within the canton and only through the tax harmonization law revision of 1998 did it become law for the whole of Switzerland. The cantons had two years to implement it hence 2000...

Because it is relatively new you might not get very good answers from the local authorities...
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  #8  
Old 01.01.2008, 00:24
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Re: Q related to selling/buying property and taxation

Thanks very much Richard for those two very informative posts..! Now I'm starting to understand why so many Swiss avoid purchasing a home here (even if they had the money) and stick with renting.
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Old 01.01.2008, 11:26
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Re: Q related to selling/buying property and taxation

Thanks Richard, very helpfull.
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Old 22.01.2008, 18:39
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Re: Q related to selling/buying property and taxation

Hi.
Very useful answers!
Anyway, what you described is not that bad after all.
So, if you are lucky to sell your house for more money, then you may buy another one and sell it again for more money.. and do so, until you don't find your "dream house", and stay there for more than 20 years
In that case you don't have to pay any tax.
mine is a bit simplified version....
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