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Switzerland Consistently Ranked as one of the Cheapest Countries for Real Estate Investors

Switzerland Consistently Ranked as one of the Cheapest Countries for Real Estate Investors

Research conducted by Taxand, the world's largest global organisation of tax advisors to multinational businesses has shown that Switzerland is one of the least expensive countries in the World in which to sell residential property and for those investing in buy-to-let.

The Taxand Total Tax Take (T3) research into the real estate market, conducted across 23 countries across the globe, reveals that the tax rate on residential sales is the fifth lowest of the countries analysed at a rate of 13.07%, 10.97% for the sale of an apartment and 23% taken on residential rental income.

Commercial rental property investors can also benefit from attractive tax rates of 13.28% of income taken, which is well below the average of 25.40%. Investors of healthcare related property, such as hospitals and care homes, achieve the World's lowest tax take at just 18.66%, which compares very favourably to the world's most expensive Spain with a tax take of 41.59%.

The Swiss tax rates are being decreased in many cantons to the lowest ever level. A majority of the cantons reduced their corporate income tax rates dramatically - some of them even by 50 percent. In half of the cantons the corporate income tax rates now range between 12 and 16 percent.

Tax reductions and several important tax incentives were also introduced for individuals so that the maximum net income tax rates went down to between 20 to 30 percent in many cantons, in some municipalities in Schwyz even to 19 percent.

Furthermore, transfer tax rates were reduced in some cantons (if any). Some cantons also abolished the property taxes.

Overall, the tax climate for real estate investors in Switzerland improved further despite the crisis.

Keith O'Donnell of Taxand, Global Head of Real Estate, at Taxand said:

"Our research throws up some interesting trends with regards to residential property within Europe as well as worldwide. Purchasing a new home in Switzerland is a relatively low tax transaction mainly due to the low VAT rate. Property investors may well be surprised by these results and in light of them consider a shift in their investment portfolios to less tax-heavy jurisdictions in order to boost overall profits. Certainly, with governments reversing tax concessions in order to generate revenue, a growing number of investors could be tempted by the attractiveness of countries already exhibiting a lower tax take."


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Taxand T3 research methodology
Taxand has updated and expanded last year's T3 data.

To arrive at the figures, Taxand has taken into account VAT (or its local equivalent), corporate income tax, and property taxes. The property taxes were usually subject to various country-specific assumptions and modifications as they often differ on municipality basis or sometime just location basis. Those were reviewed by the coordinating Taxand team to assure comparability. Administrative fees, notary fees, court fees were excluded as having a relatively low impact on the overall tax take.

To ensure comparability of the results, certain data has been fixed such as size of the building, investment costs, and 100 percent non-interest bearing equity financing.

With all of that built into the model, Taxanders adopted it to the local law.

Your Taxand contact for further queries is:
Abigail Tarren, Global Operations Director
T. +44 (0)207715 5243

Taxand's Take

Taxand's Take Author