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Old 03.01.2015, 18:21
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Gewinnsteuer when selling house and leaving CH

Has any one had experience with the above?
Will the tax authority withold the profit on our house sale until the Gewinnsteuer has been paid?

Any information on this would be welcome
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Old 03.01.2015, 18:32
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Re: Gewinnsteuer when selling house and leaving CH

I think you will find that he tax is taken, via the Notary, from the amount you receive for the flat. In our experience, it took a couple of weeks for the Canton to agree the amount of tax due and the sale then proceeded with 3 separate payments; the 10% deposit, the tax and the balance.

That's just our experience, others may be much more informed about this.
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Old 03.01.2015, 18:50
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Re: Gewinnsteuer when selling house and leaving CH

Thanks Ormsby. I guess the quickest way to get this sorted out will be to talk to the Notar Will try this Monday
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Old 03.01.2015, 19:09
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Re: Gewinnsteuer when selling house and leaving CH

You will see that, from the thread below, the handling of the payment of Grundstückgewinnsteuer in Argau (which you list as your location) is somewhat 'looser' than in other cantons. . .

The [home] ownership experience....

Normally, except in Argau, the purchaser is jointly liable for this tax if the seller absconds without paying it, so the purchaser attempts to protect himself and ensure that the seller really does pay the tax, by withholding it, or paying it directly etc.

The Notar should, anyway, ensure that it is handled correctly.
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Old 03.01.2015, 21:13
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Re: Gewinnsteuer when selling house and leaving CH

In Aargau the Notar is not involved.

The first question is how long you have owned the property. The capital gain tax is calculated on a percentage basis based on ownership. In the 25th year of ownership the percentage on the gain is 5%. In the first year it is 40%.

Improvements made to the property, notar costs and selling costs can all be deducted from the gain.

You should talk to the tax authority in the Gemeinde where you live. They should be able to help you. The other alternative is to see a tax specialist in Kanton Aargau.
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Old 04.01.2015, 20:07
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Re: Gewinnsteuer when selling house and leaving CH

Hi Thanks all for the information I will contact the local tax office for further info.
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Old 04.01.2015, 20:25
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Re: Gewinnsteuer when selling house and leaving CH

The join liability is given but the purchase contract will usually protect the buyer from non-payment of the gains tax.

What might be interesting if whether they allow you to deregister before it's calculated and paid. From experience, you get a first bill and then supply evidence to reduce it. I would liaise with an accountant and maybe think about some POA contract for this if you want to leave in a hurry.
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Old 25.08.2017, 08:00
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Re: Gewinnsteuer when selling house and leaving CH

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In Aargau the Notar is not involved.

The first question is how long you have owned the property. The capital gain tax is calculated on a percentage basis based on ownership. In the 25th year of ownership the percentage on the gain is 5%. In the first year it is 40%.

Improvements made to the property, notar costs and selling costs can all be deducted from the gain.
Do you happen to know if the calculation for this is fairly simple?
I mean say my profit (before these deductions) is 10'000 francs and I can produce proof I invested 10'000 francs in renovating. Does that mean the tax is then effectively zero?
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Old 25.08.2017, 08:16
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Re: Gewinnsteuer when selling house and leaving CH

Yes.
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Old 25.08.2017, 08:36
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Re: Gewinnsteuer when selling house and leaving CH

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Do you happen to know if the calculation for this is fairly simple?
I mean say my profit (before these deductions) is 10'000 francs and I can produce proof I invested 10'000 francs in renovating. Does that mean the tax is then effectively zero?
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Yes.
Yes, with a caveat:

The renovation needs to be a like-for-like replacement, not an upgrade.

For instance, an obvious example would be adding something - in our case, a new bathroom or the cost of things included in a kitchen renovation that were not there in the original, like adding a grill or steamer. None of those costs are deductible.

But there are also some less obvious things that might get rejected. Again, from my own examples: replacing carpet with tile and parquet, replacing a regular cooktop with an induction, replacing a broken Cheminee with one that has a heating element. In this case we were only able to deduct up to the cost of the original item, not the full price of the 'better' replacement.

I would imagine, though, that as always YMMV. Submit your renovation costs, if there are questions be prepared to argue your point. Perhaps if you are more eloquent than I you might get the whole deduction.
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Old 25.08.2017, 08:50
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Re: Gewinnsteuer when selling house and leaving CH

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Yes, with a caveat:

The renovation needs to be a like-for-like replacement, not an upgrade.

For instance, an obvious example would be adding something - in our case, a new bathroom or the cost of things included in a kitchen renovation that were not there in the original, like adding a grill or steamer. None of those costs are deductible.

But there are also some less obvious things that might get rejected. Again, from my own examples: replacing carpet with tile and parquet, replacing a regular cooktop with an induction, replacing a broken Cheminee with one that has a heating element. In this case we were only able to deduct up to the cost of the original item, not the full price of the 'better' replacement.

I would imagine, though, that as always YMMV. Submit your renovation costs, if there are questions be prepared to argue your point. Perhaps if you are more eloquent than I you might get the whole deduction.
The ones which are considered like-for-like replacements are tax deductible in the year that they were made. Those which are rejected, or the extra component which was rejected if not 100% accepted, will be the ones you can deduct from capital gains because they improved the value of the house.

So these like-for-like replacements are exactly the ones which you can't use to lower your capital gains tax when selling your home.
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Old 25.08.2017, 08:57
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Re: Gewinnsteuer when selling house and leaving CH

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Those which are rejected, or the extra component which was rejected if not 100% accepted, will be the ones you can deduct from capital gains because they improved the value of the house.

.
Do you have a reference?

I ask because this is not what the local Steueramt has told us. However, it is not unheard of that one needs to gently remind local officials that their chosen path might not be consistent...

If you have a reference, I'd be most grateful.
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Old 25.08.2017, 09:24
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Re: Gewinnsteuer when selling house and leaving CH

You're confusing income and capital gains taxes. You deduct renovation costs from income taxes, value-adding costs from capital gains. Costs could split between two, but not double deducted from both: "Aufwendungen, die steuerlich bereits abgezogen worden sind, werden nicht angerechnet", Schwyzer Steuerbuch § 116
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Old 25.08.2017, 09:27
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Re: Gewinnsteuer when selling house and leaving CH

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The ones which are considered like-for-like replacements are tax deductible in the year that they were made. Those which are rejected, or the extra component which was rejected if not 100% accepted, will be the ones you can deduct from capital gains because they improved the value of the house.

So these like-for-like replacements are exactly the ones which you can't use to lower your capital gains tax when selling your home.
So do I understand that anything that was accepted for yearly tax deductions will be accepted also for capital gains tax post-sale? Likewise anything that was rejected will be rejected again?
Though for yearly tax it is the town hall who deal with it, whilst for capital gains it is the cantonal office.
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Old 25.08.2017, 09:30
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Re: Gewinnsteuer when selling house and leaving CH

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The ones which are considered like-for-like replacements are tax deductible in the year that they were made. Those which are rejected, or the extra component which was rejected if not 100% accepted, will be the ones you can deduct from capital gains because they improved the value of the house.

So these like-for-like replacements are exactly the ones which you can't use to lower your capital gains tax when selling your home.


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So do I understand that anything that was accepted for yearly tax deductions will be accepted also for capital gains tax post-sale? Likewise anything that was rejected will be rejected again?
Though for yearly tax it is the town hall who deal with it, whilst for capital gains it is the cantonal office.
I understood the complete opposite from that post.
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Old 25.08.2017, 09:32
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Re: Gewinnsteuer when selling house and leaving CH

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I understood the complete opposite from that post.
Yes of course, you are completely right! Having reread I do too now! Sorry!
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Old 25.08.2017, 09:49
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Re: Gewinnsteuer when selling house and leaving CH

Almost everything you spend on your house is tax-deductible.

If the expenditure is to maintain or replace (like for like) an existing item, it's deductible for income tax purposes in the year in which the money was spent.

If the expenditure is to add value to the house, i.e. to improve it, it is deductible for capital gains tax purposes in the year in which you sell your house.

The two are mutually exclusive. Expenditure on your house can only be deducted once, and only in accordance with the guidelines above (i.e. you can't choose whether to deduct against income or capital gain).
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Old 25.08.2017, 09:58
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Re: Gewinnsteuer when selling house and leaving CH

To be honest at this stage, in our case, it looks as if almost everything has already been deducted once from income tax, so nothing left to deduct from capital gains.

We are selling in the uncompleted sixth year of ownership, which equates (in Aargau) to 30% of what we make on it.
We were not expecting to make anything much on it.
We are selling for 50'000 francs more than we bought for.
So we will probably be invoiced for 15'000 francs in capital gains tax post-sale.
Which in my opinion is no disincentive to sell.
The profit is still 35'000 francs (before considering any work we did on it of course).

I posted in this thread as apparently Aargau invoices the seller some time after the sale, but we are not leaving Switzerland, we are just moving into another property in another canton and are selling because we need the money.
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Old 25.08.2017, 10:12
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Re: Gewinnsteuer when selling house and leaving CH

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Yes, with a caveat:

The renovation needs to be a like-for-like replacement, not an upgrade.
.
Surely thats against income tax?
Upgrade are detectable come sale time.
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Old 25.08.2017, 10:32
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Re: Gewinnsteuer when selling house and leaving CH

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Do you have a reference?

I ask because this is not what the local Steueramt has told us. However, it is not unheard of that one needs to gently remind local officials that their chosen path might not be consistent...

If you have a reference, I'd be most grateful.
Unfortunately I don't have a reference, but it was how it was described to us at a new homeowner's meeting. As already described by the others in this thread, you either deduct it from income tax the year of the renovation or you deduct it from the profit at the end.

An example: you buy a house for 500k, add a new floor (level) to it for 200k, then you sell the house for 700k. You won't be able to deduct this renovation from your income tax return because it increased the original value of the house. However, you will be able to deduct the 200k from the profit of the house because you didn't actually make any capital gain on it, you had to spend 200k to get the value to go up by that much.

I guess there are some which can't ever be deducted, like painting your walls a different colour every month, so just because it's not deductible from the yearly income tax it doesn't mean that it's automatically going to be deductible from capital gains at the end.

Regarding capital gains tax, I'm not sure how it is in other cantons, but I know of some where you can transfer the capital gains from one property to another so you can delay the payment to when you sell the next property. There is a certain time frame (fairly short) in which you have to buy the new property and transfer the capital gains from the old property. I can imagine a few situations where this could be useful.
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