Do you know if this is related to the fact that Real estate gains are subject to capital gains tax and hence they would like to keep the tax value same as the actual cost of acquisition?
And eventually at time of sale
Capital gains = Sell value - Tax value ?
It feels a bit weird that wealth tax on real estate is applied to values which are not really the current value of the asset.
tax value for wealth tax is typically not the same as the cost of acqusition.
AFAIK:
Capital gains = Sell value - Purchase price - Value-increasing renovations
Don’t worry, you’ll be taxed when/if you sell .
Sure.
I was just surprised by the rule. That’s all
But to me it makes sense.
If capital gains tax 30-40% can be charged at time of sale, then taxing current market value would mean double taxation on same thing
In case that helps - the rate of real estate gains taxes decreases with the holding period.
The longer you hodl the lower it gets
Yes, for example in AG it‘s 40% in the 1st year and decreases by 2%/year for the first 10 years (20% after 10 years) and then by 1%/year for the next 15 years.
In Zurich the tax value of properties will be updated Kanton Zürich: Steuerliche Immobilienwerte ab 2025 neu festgelegt .
Thanks for sharing
This explains a lot
So all this information that tax value doesn’t change for real estate is driven by the fact that tax office simply didn’t reassess them since 2009
However this ~50% increase in tax value is a steep increase.
The article states 10/11% increase in imputed rent (vs 2009) and ~50% in wealth. That is probably quite in line with how average rent increased (not new ones) and how the value of flats evolved. I would call it a fair increase.
Clearly, some people will claim that imputed rent was unfair in pronciple. I don‘t agree to this but lets put it aside. As long as the rules are how they are, the increase seems appropriate to me.
Well hopefully the Bund will get rid of that nonsense ‘soon’.
And now we moved into politics 
I don‘t think that it will happen, and for sure it should not happen
Ah, maybe time for a long term update. All net.
Total 1.5m
That’s a decent uptick, but the inherited RE was a ITA emotionally, and a hassle to deal with/sell.
Also, thanks to the crazy Swiss RE market, there is a net value of the house we life in, located in Zurich city:
House 1.2m
I don’t add it to the total, since is is not really useful equity, and taxed to some extend if we sell and don’t rebuy Swiss RE for ourselves. Still, better as net worth, then as net debt.
Is the Investment RE meant for your house in Zurich City? Or is that for other RE?
Not sure what you mean by Investment RE.
Thanks
Ah, sorry for not specifying (and the horrible markup!).
Investment RE, are a bunch of properties we have bought in France over the years, which we rent out. For a couple of them the mortgages have been paid of, others are still mortgaged.
We should actually buy some additional ones, since we are not properly profiting of leverage at the moment. We even discussed with our bank in France at the end of 2022, and they were willing to consider the bigger mortgage free property as a collateral for a 500k loan. We didn’t follow up, but should – though I am not sure whether to go for more RE, or something else.
Just by curiosity… what is the % return (rent/RE price + costs) of your RE investments in France?
That would be 4% – I actually estimated the value based on that, we had about 30k net income last year. This year we might end up a bit higher, but something unforeseen can always happen.
This value estimation seems quite realistic to me, based on (market asking prices - 20%). Our French bank is a bit more generous with their estimation for lending purposes, but I guess that’s both based on their business interests and the fact that we have a long term working relation.
Our ROI is, of course, much higher, since we invested ~100k since 2004 and the rest is based on leverage and increases in RE value.
4% yield is on the current asset value I guess.
Is this pre-tax or post tax?
Pre-tax.
and as a non resident you’re taxed at 20% up to a taxable income of 28 797 €, then 30% + 7.5% impôt de solidarité + real estate tax (impôt foncier), correct ?
The ‘impot foncier’ I considered as a cost factor, so the 30k remaining is after impot foncier is paid. The 20% part sounds reason able; the 30+7.5 hmmmmm – does it matter if you file as a couple?
(Anyway, taken care of by a ‘comptable’, so I hope all fine).
edit, just checked… Declared income 34 979 – tax 7 941