Investing in Property in Vaud & Geneva: The Tax Essentials

Let’s be honest, tax isn’t everyone’s favourite subject. But luckily, we know someone who, not only enjoys it but knows how to make it work in your favour. If you’re thinking about buying property in Vaud or Geneva, well that’s the exciting part. Thinking about the tax implications? Maybe less so. That’s where Albatross Group comes in.

We’re delighted to welcome this young, bilingual accountancy firm to the Living in Nyon Directory. Based in Gland, Albatross helps both individuals and businesses make sense of their numbers with clear, practical advice. And to kick things off, they’re sharing insights on a hot topic: how real estate investments are taxed in Switzerland.

No two tax situations are the same. The tips below are a useful guide, but for advice that fits your circumstances, it’s best to speak directly with Albatross.

Investing in Real Estate: A Tax Perspective

Real estate is often seen as one of the most attractive long-term investments in Switzerland. But before you sign on the dotted line, it’s worth knowing how the tax authorities in Vaud and Geneva view your investment activity. Why? Because whether you’re considered an ordinary investor or a professional real estate trader can have a big impact on your tax bill.

Ordinary vs. Professional Management

The Swiss tax authorities distinguish between two categories:

• Ordinary asset management – typical private investors buying property to generate rental income or secure long-term value.

• Professional real estate management – individuals or companies actively trading, flipping, or developing property as a business activity.

If your activity is classified as professional, any capital gains are fully taxable as income. That can have significant consequences.

How is professional status decided?

There’s no single rule. Instead, authorities look at a bundle of criteria, including:

• Frequency of buying and selling

• Use of borrowed capital

• Management of renovations or development projects

• Building or expanding a portfolio with regular transactions

If too many of these apply, it may be smarter to structure your activity as a company from the start, rather than risk being reclassified later.

An Everyday Example

Take a couple living in Nyon who inherit some funds. They don’t currently own property but decide to buy an apartment to rent out for extra family income. This would generally fall under ordinary asset management. A straightforward investment scenario.

Individual vs. Company Ownership

When buying property, one of the key decisions is whether to hold it as an individual or through a company. Each option has pros and cons.

A. Owning as an Individual

Pros

• Simple to manage with lower administrative and accounting costs

• Real estate capital gains tax may be lower on privately property if held long term

Cons

• Limited tax planning flexibility

• Risk of being reclassified as a professional trading in real estate

Tax implications

• Rental income is added to your personal income (a significant impact if you are in a higher tax bracket)

• Wealth tax applies, based on the property’s tax value (close to market value)

• Real estate capital gains tax applies upon sale, with rates reducing the longer you hold the property

B. Owning Through a Company

Pros

• More options for efficient tax structuring

• Greater potential for reinvestment and long-term growth

• Less risk of being treated as a professional trader in real estate

Cons

• Higher setup and operational costs

• Establishing a Swiss company can take up to three months, which must be factored into planning

Why Planning Ahead Matters

Buying a new build, taking on a renovation, or adding a rental property to your portfolio - in each case, tax plays a crucial role in shaping your overall returns. Ownership structure, financing method, and timing all make a difference. Planning in advance helps you avoid surprises and get the most from your investment.

That’s where Albatross Group, your local accountant in La Côte, can make a real difference. With clear, practical advice and a sharp view of the bigger picture, they’ll guide you through the options and help you choose the structure that works best for your situation. From tax planning to long-term strategy, they’re here to ensure your property investment takes off smoothly.

Thinking about a property investment? Start by understanding your numbers. Visit Albatross Group in our Directory to learn more, or let us know in the comments below if you’d like to see more articles on tax and investment topics.

Fly high, with Albatross.

LEARN MORE ABOUT ALBATROSS