Who pays the property transfer tax: buyer or seller?

What exactly is property transfer tax?

Before we clarify who pays, we need to understand what the tax is for. Property transfer tax is a legal transaction tax. It is levied because real estate – that is, a plot of land or a condominium – changes ownership. The state is compensated for the administrative act of "transferring ownership" in the land register.

The amount of tax is generally based on the purchase price. Rates vary between 0% and 3.3%, depending on the canton.

• Example: For a purchase price of 1 million Swiss francs and a tax rate of 1.5% (e.g. Lucerne), 15,000 Swiss francs are due.

It's important to know that in cantons like Zurich or Schwyz, there is no longer any property transfer tax for standard residential properties. Only notary and land registry fees apply there. However, in other cantons like Bern, Vaud, or Fribourg, it represents a significant cost factor.

Who bears the costs? Buyer or seller?

This is the key question. The answer depends on two factors: cantonal law and the contractual agreement.

1. The legal regulation (The standard case)

In most cantons that levy this tax, the buyer is legally liable for the tax. This applies, for example, in Bern, Lucerne, and Thurgau. The state therefore sends the bill to the new owner. However, there are exceptions: In the cantons of Basel- Landschaft and Obwalden, the law stipulates that the buyer and seller each pay half of the costs .

2. Contractual freedom

Regardless of who the state sends the bill to, freedom of contract prevails in Switzerland . can be included in the purchase agreement Agree on who will cover the costs .

• In "buyer cantons" it is often agreed that the buyer pays – this is the market standard (usage).
• However, it is quite possible that the seller will agree to take on half in order to speed up the sale.

3. The risk of joint and several liability

This is where it gets tricky: In many cantons, buyers and sellers are jointly and severally liable . This means that if the buyer (who is contractually obligated to pay) goes bankrupt or fails to pay, the tax office will collect the money from the seller. The tax office is not concerned with any internal agreements you may have in the purchase contract. The same applies in reverse: If the seller is actually liable for the capital gains tax but fails to do so, the state often has a lien on the property.

Connection with the real estate capital gains tax

Property transfer tax rarely comes alone. It is closely intertwined with the question of who has to pay capital gains tax on real estate . These two taxes are often confused, but they are fundamentally different.

The clear separation of duties

• Property transfer tax: Taxation of the transaction (turnover). Usually the buyer 's responsibility .
• Capital gains tax on real estate: Taxation of profit (gain). Always the seller 's responsibility .

The seller must pay capital gains tax on the net profit realized from the sale . This is logical, as they are the one receiving the cash. The buyer isn't directly involved. Nevertheless, it's crucial for the buyer that the seller takes their obligation to pay the capital gains tax seriously. If they fail to do so, the tax office can register a statutory lien on the property that now belongs to you . In the worst-case scenario, you, as the buyer, will have to pay the capital gains tax (or settle the debt) to save your house from foreclosure, even though you haven't actually received the profit.

Optimization potential: Deduct costs

An interesting point for buyers: paying property transfer tax today doesn't mean the money is completely lost. If you sell the house again in ten years and make a profit, you 'll then have to pay capital gains tax . In this future calculation, you can often deduct the property transfer tax paid today as an investment cost from the profit. This means: paying fees today means paying less capital gains tax tomorrow . So keep your property transfer tax receipt safe – it's worth real money if you ever have to pay capital gains tax yourself .

Regional differences in detail

To find out whether you will have to pay property transfer tax in addition to potentially having to pay capital gains tax later, a look at the map will help:

• No property transfer tax (residential): Zurich, Schwyz, Glarus, Uri, Zug, Aargau (only minimal fees). Here you don't need to worry about this tax; as a seller, you only need to focus on being able to pay the capital gains tax .
• Buyer pays alone: Bern, Lucerne, Ticino, Vaud, Valais, Fribourg. Here come the... significant Additional costs will be borne by the buyer .
• Cost sharing (50/50): Basel-Landschaft, Obwalden, Nidwalden. Here it is fairly distributed .

Practical tip : The legal lien secure

Whether you're a buyer or a seller, taxes are the most critical aspect of the transaction. As a buyer, you should ensure that the full purchase price doesn't go to the seller before the tax issues are resolved. It's common practice to transfer a portion of the purchase price directly to the tax office or place it in an escrow account. This ensures that the funds are available to pay the capital gains tax on the property .

If you, as the seller , have to pay capital gains tax on real estate , you should already factor this into your net proceeds calculation. Property transfer tax, on the other hand, is a point of negotiation. In a buyer's market (many properties, few buyers), you, as the seller, can offer to cover the property transfer tax to make the property more attractive. In a seller's market, the buyer will have to accept this .

Don't forget: Even if you, as the seller, believe you haven't made a profit and therefore don't have to pay capital gains tax (e.g., if you sold at cost), you still have to file a tax return. Property transfer tax, on the other hand, is always due as soon as ownership changes hands – regardless of whether someone has to pay capital gains tax or not.

Conclusion

The question "Who pays the property transfer tax?" can usually be answered with "the buyer," but cantonal laws and individual contracts can change this (e.g., cost sharing in Basel-Landschaft). It's important to distinguish this from capital gains tax: while the transaction costs are often borne by the buyer, the seller must pay tax on the profit and thus the capital gains tax on real estate .

The biggest risk lies in joint and several liability and the tax lien. A buyer should always insist that the anticipated tax amounts are deducted from the purchase price and paid directly to the tax office. This guarantees that the seller fulfills their obligation to pay the capital gains tax and that your new home remains free of encumbrances.

If you have any uncertainties regarding tax burdens or contractual protection, Loft offers transparent processes and checklists to ensure your property purchase or sale is handled safely.

Glossary

• Property transfer tax: A cantonal tax levied on the change of ownership of real estate. It is calculated as follows : itself most as a percentage of the purchase price .
• Paying capital gains tax on real estate: The seller's obligation to pay tax on the net profit from the sale of real estate. This is strictly exempt from property transfer tax to separate .
• Joint and several liability: The principle that the state can demand the tax from both contracting parties (buyer or seller) if the actual debtor does not pay.
• **Statutory lien: The right of the state to directly recover damages from unpaid property taxes (if the seller refuses to pay the capital gains tax ), regardless of who the current owner is.**
• Notary fees: Costs for the official notarization of the purchase agreement. These are additional charges. to Property transfer tax .