Switzerland: Worked Example of Tax on Rent

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Last Updated: Oct 03, 2006

Tax Example: Rent

Non-resident couple's joint monthly rental income²	€1,500	€6,000	€12,000
Annual Rental Income	18,000	72,000	144,000
Less Costs³	(2,700)	(10,800)	(21,600)
= Taxable Income	15,300	61,200	122,400
Acquisition Costs	224,248	1,379,721	2,990,574
Taxable Value for Real Property Tax	224,248	224,248	2,990,574
Real Property Tax	224	1,380	2,991
Taxable Value for Net Wealth Tax⁴	276,495	1,105,941	2,203,876
Net Wealth Tax (Geneva)	1,658	9,566	20,633
Taxable Income for Cantonal/ Communal Taxes (Geneva)	15,300	61,200	122,400
Income Tax (Geneva)	5,126	20,500	40,854
Taxable Income for Direct Federal Tax⁵	15,076	59,816	118,961
Income Tax (Federal)	1,734	6,880	13,681
Annual Income Tax Due	€8,741	€38,326	€78,158
Tax Due as % of Gross Income	48.56%	53.23%	54.48%
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DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on October 3, 2006.

Notes

¹ Exchange rate used: €1 = CHF3.097.

² The property is jointly owned by husband and wife.

³ Income-generating expenses are estimated to be around 15% of gross income.

⁴ The annual gross rental income is therefore capitalized with 6.51%. The capitalization rate is determined by the Geneva State Council annually.

⁵ The Real Property Tax can be deducted for the Direct Federal Tax. In these cases, the Real Property Tax was deducted from the respective net income.