Real Estate Capital Gains Tax Act (GGStG) - Object of the Tax (GGStG)

1. Real estate capital gains tax is imposed on profits from the sale of properties or shares in such properties; profits from the sale of business assets that are subject to income or profit tax are exempt.

2. Additionally, the real estate capital gains tax applies to

1. * Profits from the sale of agricultural and forestry properties by individuals, to the extent that they are assessed under this law and are not subject to income tax;

2. * ...

3. The real estate capital gains tax is jointly levied by the canton and the municipality in which the sold property is located.

1. Real Estate within the meaning of this law includes

1. the properties, including movable structures, belonging to the landowner and so connected with the real estate that they form an economic unit;

2. the independent and permanent rights recorded in the land register;

3. the mines.

2. Real estate that forms an economic unit is treated as a whole when calculating the property gains tax.

1. The following are considered a conveyance

1. the transfer of ownership of a property or a share in common ownership;

2. the transfer of economic control over a property, particularly through the sale of shares in real estate companies;

3. the sale of a purchase right, pre-emption right, or redemption right to a property. A compensated waiver of any of these rights is also considered a conveyance;

4. the entry of a third party into a purchase contract or pre-purchase agreement for a property. A compensated waiver of the rights from a purchase contract or pre-purchase agreement is also considered a conveyance;

5. the encumbrance of properties with private easements or public-law property restrictions, if these permanently and substantially impair the unrestricted management or sales value of the properties, and the encumbrance is for compensation. Taxation as capital gain from property sales is omitted if the compensation is subject to income tax;

6. the transfer of properties or shares in such from private assets to business assets;

7. the transfer of private asset participation rights in real estate companies, if these participation rights embody a special usage right (e.g., a right of residence) to a residential unit.

1. Tax is Deferred

1. in the event of a change of ownership through inheritance processes (inheritance succession, partition, bequest), anticipation of inheritance, and donation, subject to § 17 paragraph 3;

2. * in the event of a change of ownership between spouses, including as a result of marital property division, and between registered partners, provided both parties agree;

3. in land reallocations for the purpose of land consolidation, district planning, boundary adjustment, rounding off agricultural holdings, as well as in land reallocations during expropriation proceedings or in the event of impending expropriation;

4. in the case of a sale by an institution exempt from tax under § 70 paragraph 1e-i of the Tax Law, provided the proceeds from the sale are used to acquire a replacement property in Switzerland. The provisions of § 78 of the Tax Law apply correspondingly;

5. * in restructurings within the meaning of §§ 26 and 75 of the Tax Law in cases subject to the application of this law (§ 1);

6. * in the complete or partial sale of a self-operated agricultural or forestry property, provided the proceeds from the sale are used within two years before or after the sale to acquire a self-operated replacement property in Switzerland or to improve one's own, self-operated agricultural or forestry properties;

7. * in the sale of a permanently and exclusively self-used residential property (single-family house or condominium, excluding holiday and secondary homes), provided the proceeds from the sale are used within two years before or after the sale to acquire or build a similarly used replacement property in Switzerland.

2. In the event of a sale of a property for which a tax deferral according to paragraph 1, points 4, 6, or 7 was granted upon acquisition or for its improvement, the reinvested gain must be deducted from the investment costs.

3. If a deferral according to paragraph 1, points 6 or 7 is granted, the period of two years after the sale may be extended to a maximum of four years in justified cases.

4. In the event of a tax-triggering sale of the replacement property located in another canton, the deferred gain in the canton of Lucerne may be subsequently taxed according to paragraph 2, provided that the other canton claims subsequent taxation in a similar case. The government council can enter into reciprocity agreements with other cantons on this matter.

1. Exemptions from the Real Estate Capital Gains Tax

1. * The Confederation and its institutions, in accordance with federal law;

2. * Gains from sales by the Canton of Lucerne, a Lucerne municipality, or parish, provided the property is located within the respective municipality;

3. * Foreign states for their domestic properties used exclusively for the direct use of diplomatic and consular missions, as well as the institutional beneficiaries exempt from tax according to Article 2 paragraph 1 of the Host State Act of June 22, 2007, for properties owned by the institutional beneficiaries and used by their offices.

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1. The real estate capital gains tax is owed by the seller. If the property was held in joint ownership, the sellers are jointly and severally liable in the case of collective ownership, and liable according to their shares in the case of co-ownership.

2. A contractual agreement for the purchaser to cover the real estate capital gains tax does not exempt the seller from the tax liability.

1. A capital gain on real estate is defined as the excess of the sale value over the investment value of the property.

2. In the case of acquisition through a tax-deferring sale, the calculation of the investment value is based on the last taxable sale.

1. The asset value is derived from the purchase price and the statutory deductions.

1. The purchase price is deemed to be the value of the services rendered for the acquisition of the property. If no additional tax can be levied and the acquiring person contributed to the insufficient taxation, services not considered during the assessment of the last tax-triggering sale cannot be credited.

2. If the purchase price cannot be determined, the market value at the time of acquisition by the seller or the legal predecessor is considered as such.

3. In-kind benefits in addition to the numerically agreed purchase price are to be credited at the market value at the time of acquisition, while lifetime benefits of a person are to be calculated at their cash value.

4. Payments for movable property, goodwill, and similar items are not part of the purchase price.

2. In the event of the sale of real estate that has previously been transferred from business to private assets, the transfer value relevant for income taxation purposes is considered as the acquisition price, provided that the transfer was subject to an income tax assessment.

1. If the relevant acquisition occurred more than 30 years ago, the cadastral appraisal existing 30 years ago, with a surcharge of 25 percent, is considered the acquisition price. However, if the acquisition price at the relevant acquisition, including the items from more than 30 years ago according to §§ 12 and 13, results in a higher value, the value of the asset is determined based on the relevant acquisition.

2. No surcharge is applied to non-agricultural properties whose cadastral value has been newly determined pursuant to the Valuation Act of June 27, 1961, as amended on June 21, 1988.

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1. The purchase price shall include

1. the acquisition costs, such as notarization fees, land registry fees, costs for the establishment of liens, property transfer taxes;

2. expenses for carrying out the acquisition transaction, particularly customary brokerage commissions;

3. expenditures for permanent value enhancement;

4. * ...

5. costs of the constructional development of the property;

6. compensation for the establishment of an easement or a real burden in favor of the property, or for the redemption of an easement or real burden on the property;

7. contributions towards the construction or correction of roads and sidewalks, watercourse constructions, the construction of water pipes and sewage systems, etc.;

8. * ...

2. Expenses that have been considered as deductions for income tax, and the value of the owner's labor that has not been taxed as income, cannot be claimed. The owner's labor is, provided it is to be added to the purchase price, valued at the amount that would have been incurred if performed by a third party.

3. Insurance benefits and contributions from the federal government, the canton, and the municipality, for which the seller is not liable for replacement or repayment, are deducted from the investment value.

1. If only a part of the property is sold, its capital value shall be calculated according to its proportional share of the total capital value.

2. If the parts of the overall property were unequal in value at the time of acquisition, the property shall be divided into value zones upon the first partial sale. This determination of partial capital values is binding for subsequent partial sales.

1. The disposal value is equal to the disposal price, reduced by the statutory deductions.

2. In the case of the transfer of real estate or shares in such properties from private assets to business assets, the disposal value is considered to be the value at which the asset is recognized in the company.

3. In the event of a wholly or partially gratuitous transfer of real estate to a person subject to income tax, the disposal value is considered to be the value at which the real estate is recognized by that person.

1. The selling price shall be deemed to include all the purchaser's services.

2. In the case of an exchange, the market value of the exchanged property at the time of the exchange shall be considered the selling price, plus any additional payment received and minus any additional payment made. The market value is deemed to be the price that could presumably be achieved in an ordinary business transaction sale.

3. The provisions of § 9 paragraphs 2-4 shall apply mutatis mutandis.

4. The obligation of the transferor toward the acquirer of the property to provide certain future services, such as the construction of an access road, a sewerage system, and the like, is taken into account when the service can be definitively measured at the time of tax assessment, and the execution is certain.

5. Compensation for disadvantages arising to the transferor from the sale, such as the depreciation of the remaining property, necessary construction expenses, and the like, shall not be part of the selling price.

1. The following are deducted from the sale price

1.* the value of the increase in the quantity of crops, especially forest, compared to the value at the time of the relevant acquisition;

2. the costs of the transfer of ownership, such as notarization costs, land registry fees, costs for the establishment of mortgage rights, transfer fees, etc.;

3.* expenses for carrying out the sale transaction, especially standard brokerage commissions.

2. Due to economic disadvantages that arise for the seller after the sale, such as the devaluation of the remaining property, no deduction is allowed, subject to § 18 paragraph 4.

1. If the acquirer has undertaken to pay the real estate capital gains tax, the sale price shall be increased in the tax calculation such that, after deducting the real estate capital gains tax calculated from this amount, the contractual sale price is achieved.

1. A loss incurred from a partial disposal can be deducted from the real estate gain in the next and in subsequent partial disposals.

2. The offsetting of losses is only permissible for disposals that are made within 30 years after the conclusion of the loss-making transaction.

1. The basic tax is calculated according to the income tax rate (§ 57 paragraphs 1 and 3 of the Tax Act) at the rate that applies solely to the profit.

2. Profits up to CHF 13,000 are not taxed.

1. The tax rate is 4.2 units.

1. If the property was held for less than six years by the transferor, the tax amount is increased by 10 percent for each full year by which the holding period is shorter. However, the tax should not exceed 40 percent of the capital gain on the property.

2. If the property was held for more than eight years by the transferor, the tax amount is reduced by 1 percent for each additional full year, but by no more than 25 percent.

3. In calculating the holding period, the decisive acquisition or decisive disposition is to be taken into account. The last disposition that established tax liability is considered the decisive acquisition. The effective date is the entry in the land register (journal) or the date of contract conclusion if no land register entry occurs.

4. For the disposition following the transfer of the property from business to private assets: A surcharge under paragraph 1 does not apply if the property was part of business assets for at least five years; for the reduction under paragraph 2, the timing of the transfer to private assets is decisive.

1. The municipality is the assessing authority.

2. It may designate an administrative office to fulfill tasks assigned to it. Several municipalities may designate a joint administrative office.

3. Unless otherwise regulated by this law and the legislative decrees of the municipality, the authority responsible for the real estate gains tax in the municipality is the municipal council.

1. The municipality shall, as soon as it becomes aware of the sale, request the seller to provide within 30 days the information necessary for the calculation of the property gains tax and to submit the corresponding evidence. The deadline may be extended.

2. In cases where no land registry entry is made, the seller must report the taxable event to the municipality within 30 days of the sale and submit the corresponding evidence. The deadline for submitting evidence may be extended.

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1. The assessment authority reviews the self-assessment, conducts the necessary investigations, and determines the property gains tax. If no self-declaration is submitted despite a reminder, or if the tax cannot be accurately determined due to a lack of reliable documentation, the assessment is made at the authority's reasonable discretion.

2. The assessment decision should include

1. the basis for the tax calculation and any deviations from the self-assessment;

2. the amount of the tax;

3. the determination of the statutory lien (§ 32);

4. guidance on legal remedies.

3. In addition to the provisions pertinent to the obligation of confidentiality, administrative assistance, and cooperation duties of the taxable person, the provisions of the Tax Law shall apply mutatis mutandis to the certification, information, and reporting obligations of third parties.

1. An objection to the assessment may be filed in writing with the assessment authority within 30 days of delivery. The provisions of § 154 of the Tax Act apply mutatis mutandis.

2. Entitled to file an objection are the transferor and the Cantonal Tax Office, as well as the acquirer who has contractually assumed the reimbursement of the real estate gains tax.

3. If the statutory lien is asserted, the property owner is also entitled to file an objection.

1. If properties that constitute an economic unit are located in multiple municipalities, the assessment and collection of taxes should be carried out by the municipality in which the largest portion by value is situated.

2. If the municipalities disagree on the competence for assessment, the tax department of the canton will make a final decision.

3. The tax revenue will be distributed among the municipalities in proportion to the taxes attributed to the individual properties.

4. The distribution of the tax revenue can be contested by the other municipalities with an objection within 30 days.

1. The Tax Office of the Canton implements the enforcement of this law and exercises immediate supervision over the property gains tax system.

2. It issues the instructions and orders necessary for its correct and uniform application. In particular, it regulates the electronic recording and processing of data as well as their exchange with municipalities and taxpayers, and determines the tax forms.

3. It may issue binding advance rulings for the assessment authority. The assessment authority is usually to be heard beforehand.

1. The tax claim becomes due upon the finality of the assessment.

2. After the expiration of the appeal period, the tax amount is to be subject to interest at a rate determined by the Council of State. An appeal and administrative court complaint do not suspend the accrual of interest.

3. If no assessment has been issued six months after the transaction that gives rise to the tax, a provisional payment based on the presumed tax liability will be invoiced. The provisions of the tax law concerning provisional payments and interest application shall apply mutatis mutandis.

1. Provisions of the tax law shall be applied mutatis mutandis to payment facilities and remission.

2. Applications for payment facilities or remission must be submitted to the municipality. The municipality makes the final decision on the granting of payment facilities.

3. The municipality can grant partial or full remission for the municipal and state share up to an amount determined by the government council. The government council also regulates jurisdiction in other cases.

1. For the tax claim, including default interest, a statutory lien takes precedence over other liens from the time of sale, but only for a maximum period of two years from the due date.

2. ...

3. Any person who demonstrates a concrete interest in purchasing a property may request information from the assessment authority regarding the existence and probable amount of liens on the property for land value increment taxes.

1. The right to assess the tax becomes statute-barred five years after the taxable disposal took place. Sections 38a and 39 are reserved.

2. The provisions of the Tax Act apply to the commencement, suspension, and interruption of the statute of limitations.

3. The right to assess the tax is in any case barred by the statute of limitations fifteen years after the disposal.

1. The tax claim becomes statute-barred five years after its final assessment.

2. The provisions of the Tax Act apply to the commencement, suspension, and interruption of the statute of limitations.

3. The statute of limitations comes into effect in any case ten years after the tax has been finally assessed.

1. For the appeal, subject to the provisions of this Act, the provisions of the Tax Law shall apply mutatis mutandis.

1. The taxpayer may request the revision of a legally binding tax assessment and, if applicable, the refund of the paid tax from the tax authority,

1. if the basis for tax calculation has changed due to the rescission of the sale transaction or due to subsequent amendments to the contractual obligations, provided these actions were not carried out to evade taxes;

2. * if the taxpayer has contractually performed future obligations that could not be considered according to § 18 paragraph 4;

3. if a loss from a partial sale cannot be offset according to § 21. In this case, the revision extends to the preceding profitable disposals;

4. * if a replacement purchase has been made according to § 4 paragraph 1 numbers 4, 6, or 7.

1. The assessment authority revokes a legally binding tax assessment and issues a new assessment decision,

1. if the basis for tax calculation changes due to subsequent modification of contractual obligations;

2. if future contractual obligations considered in accordance with § 18 paragraph 4 have not been fulfilled;

3. if the profit from real estate sales is subsequently subject to income or profit tax. The assessment authority for income or profit tax must apply for a revision with the assessment authority for real estate capital gains tax within five years after the finality of the real estate capital gains tax assessment. This authority notifies the taxable person of the application and suspends the revision proceedings until the income and profit tax assessment becomes final.

1. The right to appeal expires in cases under § 35 numbers 1, 2, and 4 and § 36 numbers 1 and 2, one year after the date on which it originated, but in any case, five years after the finality of the assessment.

2. The appeal according to § 35 number 3 must be requested within one year after it has become necessary, and it applies to tax assessments that are no more than five years prior to the transaction conducted at a loss.

3. Exceptions are made for additional tax and fines pursuant to §§ 38a and 39.

1. Computational errors and typographical mistakes in final decisions can be corrected within five years of their issuance, upon request or ex officio, by the authority responsible for them.

2. The same legal remedies available against the decision may be pursued against the correction or the refusal thereof.

1. For the supplementary tax, the provisions of the Tax Law are applicable. The assessment authority is responsible.

2. The procedure is subject to the corresponding application of §§ 26-30, and for maturity and interest, § 31 applies.

3. The right to initiate a supplementary tax procedure expires ten years after the tax-triggering disposal for which an assessment was unjustifiably omitted or no complete and legally binding assessment was made.

4. The right to determine the supplementary tax expires fifteen years after the tax-triggering disposal.

5. For the supplementary tax, the statutory lien according to § 32 exists for a maximum of two years after the legal finality of the original assessment. Against a fraudulent real estate owner, it can be asserted for a maximum of two years after the legal finality of the supplementary tax assessment.

1. The provisions of the Tax Law are applicable to tax criminal law.

2. The fine is imposed by the assessment authority or the appellate body.

3. The prosecution for completed tax evasion is barred ten years after the taxable disposition for which the tax was not or incompletely assessed, or ten years after an unlawful refund or an unjustified waiver was obtained.

4. § 34 applies to the limitation period for collection.

1. Additional Taxes, Fines, and Costs Must Not Exceed the Taxable Real Estate Profit.

1. The procedure is governed by §§ 26-30 of this Act and the provisions of the Tax Code.

1. Section 31 applies to the maturity and interest of the fine.

1. Appeals against the objection decisions of the assessment authority can be lodged with the administrative court within 30 days of delivery. The right to appeal is granted to those entitled to object.

2. The cantonal court also has discretionary power of review.

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1. Under the conditions set forth in Article 73 paragraph 1 of the Federal Law on the Harmonization of the Direct Taxes of the Cantons and Municipalities dated December 14, 1990, the affected person, the Canton Tax Office, and the Federal Tax Administration may file a complaint in matters of public law with the Federal Supreme Court against the decision of the Cantonal Court.

1. The tax revenue, including any fines, is allocated 70 percent to the canton and 30 percent to the municipality in which the property is located.

2. The municipality, which carries out the assessment and collection, receives an assessment and collection commission as determined by the government council.

3. If a municipality acquires properties for public purposes, the state’s share of the real estate gains tax also goes to this municipality.

1. The municipal communities are accountable to the canton for the timely assessment, correct collection, and prompt remittance of taxes. They are directly liable for culpable acts and omissions of the municipal bodies entrusted with these tasks.

2. The balance of tax amounts existing at the end of the month must be transferred to the canton within 15 days. In the event of late remittance, an interest rate determined by the government council will be charged.

3. In the event of late remittance, a default interest will be charged.

1. The municipalities are required to maintain a register of the annually assessed real estate capital gains taxes.

1. Conveyances that occurred before the enactment of this law shall be taxed according to the previous law, regardless of the time of tax assessment. The previous provisions shall apply to the procedure, including the appeal process.

1. Sales conducted prior to the entry into force of this amendment are taxed according to the previous law, regardless of the time of assessment. The relevant date is the date of registration with the land register or the date of conclusion of the respective contract if no land register entry occurs. For the procedure, the new provisions apply.

2. In the case of the sale of properties acquired as compensation according to § 4 paragraph 1 number 4 in the version valid from January 1, 1975, to December 31, 2000, the reinvested gain must be deducted from the investment value.

3. Additional taxes for sales occurring before January 1, 2001, are determined according to the old law. New law applies to the procedure, as well as to the statute of limitations if the latter had not yet occurred by January 1, 2001.

4. Fines according to § 39 for sales occurring before January 1, 2001, are imposed under the old law if the new law is not more lenient for the affected person. New law applies to the procedure, as well as to the statute of limitations if the latter had not yet occurred by January 1, 2001.

1. This law repeals §§ 20-32 of the law from July 28, 1919, concerning the partial amendment of the Tax Law from November 30, 1892.

2. The law shall enter into force on January 1, 1962.

3. It is to be published and executed by the Government Council.