Tax assessment basis for the transfer of ownership tax

In most cantons, a real estate transfer is subject to a real estate gains tax, as well as a transfer tax. The specifics are regulated differently in each canton. However, the amount of tax is usually based on the counter-performance paid for the acquisition of the property.

The transfer of a property always brings tax obligations with it. In case of a profit, a real estate gain tax is due. In most cantons, however, a transfer tax is also owed, which taxes the transition of a property right. Whether and how the tax is levied is not regulated at the federal level but is the responsibility of the cantons. Various cantons such as Schwyz, Zug, or Zurich refrain from levying a transfer tax. In certain cantons, it is not referred to as a tax but as fees. The amount of the transfer tax is usually based on the counter-performance paid for the acquisition of the property. This can be the purchase price, but may also include additional services. On March 15, 2018, the Federal Court dealt with a case that disputed the amount of a transfer tax in the canton of Bern. The complainant contracted Y AG on June 13, 2013, to check the buildability of a plot, develop a preliminary project and project plans for a single-family house, and prepare a building application for submission. For this, he paid CHF 30,000, which would be credited to the house's construction price upon completion of the definitive construction contract. On August 26, 2013, he acquired the still undeveloped plot for CHF 232,200. Two days later, on August 28, 2013, the complainant signed the building application and submitted the plans. On November 29 and December 9, 2013, he concluded a construction contract with Y AG to build a single-family house on the affected plot, for which a lump-sum price of CHF 437,690 was agreed. The responsible land registry office assessed this transaction as equivalent to the purchase of a turnkey component, so not only the land price but also the labor cost of Y AG was included in the calculation of the transfer tax. The taxpayer objected and appealed the case to the Federal Court.

The Federal Court referred to Article 6a of the Bern Transfer Tax Act, which states that in purchase contracts for a turnkey building component or condominium unit and in purchase contracts that are so linked to a construction contract that a turnkey building component or condominium unit is acquired, the tax is assessed based on the total price (land price and labor cost). The complainant argued that he was not obligated to conclude the construction contract of November 29/December 9, 2013, due to the project contract. Had he changed the provider, only a loss of CHF 30,000 would have occurred. However, he could not convince the Federal Court. Although the construction contract was not concluded until after the acquisition of the land on August 26, 2013, extensive preliminary works and completed project plans had already been made due to the project order of June 13, 2013, which enabled the complainant to sign the land purchase contract and submit the necessary plans only two days later. It must therefore be assumed that when signing the land purchase contract, he was already determined to build the building planned by Y AG and was factually no longer free to decide when and how to build on his land. Findea helps you to keep your taxes simple and trouble-free.

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