Tax aspects of buying property abroad for Swiss taxpayers

Purchasing property abroad is an attractive investment for many people residing in Switzerland. There are important tax aspects to consider, especially in relation to the Swiss tax return.

Tax treatment of foreign properties in Switzerland

Although Switzerland has double taxation agreements with numerous countries, foreign properties must be declared in the Swiss tax return. This is because the tax rate calculation uses worldwide income and assets.

Tax value of a foreign property

Let's take the example of a Zurich couple who buys a holiday apartment in France. The tax value and the imputed rental value of the property, minus maintenance costs and mortgage interests, must be declared as assets or income in the Swiss tax return.

Imputed rental value and its tax treatment

The imputed rental value is the amount an owner could earn by renting out the property. This value is taxed as income. The calculation of the imputed rental value varies depending on the canton. For rented properties, the actual rental income must be declared.

Tax optimization

It is possible to reduce the imputed rental value by deducting maintenance costs. A lump sum deduction is possible, and its amount varies depending on the canton. If the actual costs are higher, they can be claimed instead of the lump sum deduction.