Real estate and tax are inseparable in Switzerland. Whether you live in your property, rent it out or sell it, the tax office steps in at several levels. The good news: most charges and works are deductible, and a well-prepared sale legally reduces the bill. A clear overview, specific to the canton of Vaud. This guide is informative and does not replace the advice of a notary or a tax specialist.
When you live in your property
An owner who occupies their home is taxed on an imputed rental value: a notional income corresponding to the rent they would receive by letting the property. In return, they deduct mortgage interest and maintenance costs. Its abolition was approved in a federal vote in 2025, but it remains in force until it takes effect, scheduled for 2029.
The property also enters the wealth tax, at its tax value, from which the mortgage debt is deducted.
This is the whole Swiss trade-off: paying down debt reduces interest but increases taxable wealth and income. The right balance depends on your situation: personalized advice is helpful.
The real-estate capital-gains tax
On a sale, the capital gain is taxed: this is the real-estate capital-gains tax. It is calculated on the difference between the sale price and the purchase price, less the costs and the works that added value.
A degressive scale
The longer you have held the property, the less you pay. In the canton of Vaud, the rate depends only on the length of ownership: from about 30% if you resell in the first year to about 7% after 24 years. The years during which the property was your primary residence count double.
Under certain conditions, the tax can be deferred, notably when the proceeds are reinvested in a new primary residence.
The reflex that pays off: keep ALL your works invoices. Those that added value are deducted from the taxable gain and directly reduce your tax.
The best tool to optimize a sale is the works invoices you keep: they directly reduce the taxable gain.
Transfer duties and notary fees
At purchase, the transfer of ownership comes with transfer duties (3.3% of the price in the canton of Vaud), to which are added the notary's fees and the entry in the land register.
These costs are in principle the buyer's responsibility. It is best to budget for them from the start: they add to the price and to the required equity.
What you can deduct
Several charges reduce your taxable income each year. For maintenance, you can generally choose between actual costs (with supporting documents) and a flat-rate deduction.
- Mortgage interest
- Maintenance costs (actual or flat-rate)
- Management fees for a rented property
- Building insurance premiums
- Energy measures (deductible, carry-forward possible over several years)
Watch the key distinction: maintenance works (restoring to condition) are deductible from income; value-adding works (improvement) are not, but they will reduce the real-estate capital gain on resale. Hence the importance of classifying your invoices correctly.
Gift, inheritance and transfer
In the canton of Vaud, the spouse and the registered partner are fully exempt from inheritance and gift duties. Children and descendants in the direct line have benefited, since 2025, from an allowance of one million francs per family branch; above that, their share is taxed on a progressive scale. Transferring a property remains a matter to anticipate, notably because of the latent real-estate capital gain.
Anticipating the transfer (gift, usufruct, division) often helps avoid friction and optimize taxation. It is a subject to handle with a notary.
Optimizing, legally
Optimizing is nothing aggressive: it is above all documenting your works well, choosing the right time to sell, spreading renovations over several tax years and seeking advice before major decisions. The right reflex at the right moment is often worth several thousand francs.
Frequently asked questions
What is the imputed rental value?
A notional income taxed on the owner who occupies their home, corresponding to the rent they would receive by letting it. In return, interest and maintenance costs are deductible.
How is the real-estate capital-gains tax calculated?
On the capital gain, that is the sale price minus the purchase price, the costs and the value-adding works. The rate is degressive depending on the holding period.
How can I reduce the taxable real-estate capital gain?
By deducting all value-adding works supported by invoices, and by accounting for the holding period. Keep your supporting documents carefully.
Who pays the transfer duties?
In principle the buyer. In the canton of Vaud, count on 3.3% of the price, in addition to the notary and land-register fees.
What is the difference between maintenance and value-adding works?
Maintenance (restoring to condition) is deductible from annual income; value-adding works (improvement) are not deductible from income but reduce the real-estate capital gain on resale.
Are energy renovations deductible?
Yes, measures that improve energy efficiency are in principle deductible from income, with the possibility of carrying them forward over several years, on top of subsidies.
Is the transfer to children taxed in the canton of Vaud?
The spouse and the registered partner are exempt. Children benefit, since 2025, from an allowance of one million francs per family branch; above that, their share is taxed on a progressive scale. Unlike many cantons, Vaud therefore does not fully exempt direct descendants.
Is the sale of my primary residence tax-exempt?
No, but the tax can be deferred when the proceeds are reinvested in a new primary residence, under conditions. To be confirmed with a notary.
Do I need a notary?
Yes, for any sale or transfer: the deed must be notarized in Switzerland. For optimization, a tax specialist usefully complements the notary.