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Emigrants with property in Germany
Do you own a property in Germany and are moving to Switzerland? When emigrating, you should clarify the tax consequences of your move at an early stage and how renting or a possible sale of your property will affect you. We'll show you what's important so that you don't suffer any financial disadvantages and your new start in Switzerland is a success.
Property owners - Emigration Switzerland
Are you planning to emigrate to Switzerland and have questions about your property in Germany? You don't know whether you have to pay tax on your German flat in Switzerland? We will be happy to answer your questions in a free consultation so that you can emigrate to Switzerland without any worries. We will show you which regulations apply in Germany and Switzerland and how you can optimise your situation.
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Property in Germany - Emigration Switzerland
If you own a property in Germany 🏠 and live in Switzerland, you are officially considered a cross-border property owner. Incidentally, this also applies if you buy a property in Switzerland and later return to Germany.
The tax regulations for your property in Germany will continue as before. You do not have to worry about additional taxes simply because you are moving to Switzerland - the German tax laws remain applicable. These include, in particular, income tax on rental income, property tax and, in the event of sale, possible speculation tax.
In Switzerland, you also have to declare your property and any rental income, but they are generally only taken into account for the calculation of the tax rate (progression proviso) and for wealth tax - but only if you have to submit a tax return at all as a B permit holder and fulfil the requirements for this, for example an annual gross income of over CHF 120,000.
Case 1: Apartment in Germany without letting
In Germany, property tax and ongoing ancillary costs are still payable, but no income tax, as no income is generated. In Switzerland, the property is taken into account in the assets (wealth tax, progression), but only if there is a tax declaration obligation, for example for a B-authorised person with an income of over CHF 120,000.
Case 2: Apartment in Germany with letting
The rental income is taxable in Germany, less income-related expenses. Property tax is also payable. In Switzerland, the rental income and the property value are also declared, but only for the calculation of the tax rate (progression proviso) and the wealth tax, if there is a tax declaration obligation. There is no double taxation, as Germany has the right to tax the income from the property and Switzerland only takes it into account for progression and wealth tax.
Income tax Germany
Even after moving to Switzerland, you still have to pay income tax on rental income in Germany. As a person with limited tax liability, you declare your German rental income to the tax office, deduct income-related expenses and pay the regular income tax on your property. The tax is paid directly to the relevant German tax office, regardless of the fact that your place of residence is now in Switzerland. There is no additional taxation of this income in Switzerland, as Germany has the sole right of taxation here.
Property tax Germany
Property tax is an annual tax payable to the German municipality in which your property is located. It is payable regardless of whether you live in the property yourself, whether it is empty or whether it is rented out. Even if you now live in Switzerland, you still have to pay this tax in Germany. There is no property tax in Switzerland as there is in Germany. Your change of residence does not change this obligation - it remains the sole responsibility of the German municipality.
Income tax Switzerland
Firstly, your tax liability in Switzerland depends on your residence permit. With a B permit you pay withholding tax, i.e. a direct levy on your income, for five years without having to submit a tax return yourself. Exception: If certain conditions are met, for example an annual income of over CHF 120,000 or net assets of over CHF 80,000 (this also includes real estate or a share deposit), you must also submit a tax return as a B permit holder and declare your property in the Swiss tax return. At the latest with the C permit, As a rule, a full declaration obligation applies five years after moving to Switzerland - from this point onwards, you must submit your Swiss tax return every year.
If you have to file a tax return in Switzerland, your German rental income will not be taxed again. It merely serves as the basis for calculating your personal tax rate. This means that your Swiss salary will be subject to a higher tax rate because the rental income from Germany is taken into account when determining this tax rate. In Switzerland, a slightly higher tax rate is therefore only applied to the income you actually earn (salary, job); your rental income is not taxed twice.
If your home is not rented out, there is no income that is taken into account for Swiss income tax purposes. In this case, your property has no impact on income tax, only on wealth tax.
Wealth tax Switzerland
If you have to submit a tax return in Switzerland, for example as a B-authorised person with an income of CHF 120,000 or more or with net assets of around CHF 80,000 or more, you must declare the value of your German property as assets in your Swiss tax return, regardless of whether it is rented out or not. The wealth tax is levied by the cantons and is based on the value of your property minus the property loan. For most people, the Swiss wealth tax is rather low and is in the per mille range. The burden only becomes more noticeable for large assets, for example from around CHF 2 million.
Should I keep my property in Germany?
Whether to keep or sell a property when moving to Switzerland is a personal decision. There are good reasons for both options.
Keeping a property is worthwhile if you want to generate long-term income. Those who rent out receive regular income. If you don't rent out your property, you have the option of having a home again when you return to Germany.
Selling the property can also make sense if you don't want to have to deal with administration, maintenance or finding tenants in Germany. If you want to gain a long-term foothold in Switzerland, you can use the proceeds from the sale of the property in a targeted manner. The freed-up capital allows you to expand your own pension provision in pillar 3a and thus noticeably improve your financial security for the future. At the same time, the proceeds can be used to purchase new residential property in Switzerland.
Buying property in Switzerland 🇨🇭
But perhaps you are thinking of buying a property in Switzerland after you move here. But what do you need to bear in mind when buying a house in Switzerland?
The first question that quickly arises is whether a purchase licence is required. According to the Swiss Federal Administration, this is to prevent Swiss land from falling into foreign hands. However, not all foreign nationals need a permit; the decisive factor is the nationality and residence status of the foreign national. As a German emigrant in Switzerland with a B permit, you have the advantage that you have the same rights as Swiss nationals when buying property and therefore do not need a special purchase permit to buy a flat, house or plot of land.
There are huge differences in property prices in Switzerland - and this opens up exciting opportunities. Although prices are higher in popular regions such as Zurich, Geneva or Zug, you benefit from an excellent infrastructure, the best job opportunities and a very high quality of life. Well-known holiday regions such as Ticino or the Engadine are also in demand, which is reflected in the prices, but they offer a unique living experience surrounded by nature and culture. If you are a little more flexible, you can often find attractive alternatives outside the centres at much more favourable conditions. In more rural areas, in Valais, the Jura or parts of eastern Switzerland, you can still discover properties with plenty of space and charm that also promise a high quality of life. Smaller towns such as St. Gallen, Chur or Biel also combine a good price level with a lively neighbourhood.
Financing your own home: We specialise in mortgages and provide you with comprehensive advice on all aspects of property financing in Switzerland. From initial budget planning and choosing the right mortgage to a long-term financing strategy, we are at your side. Do you need support when buying a property? We will be happy to advise you - contact us at an early stage so that we can find the best solution for your situation together.
10 tips for emigrating to Switzerland - How to do it right!
- Keep or sell your property? Check tax and financial consequences.
- Letting in Germany: Declare and pay tax on rental income correctly in both countries.
- Pay attention to capital gains taxSale within 10 years may be taxable.
- Avoid double taxationUse the tax agreement between Germany and Switzerland.
- Regulate property managementProperty management or estate agent required for on-site support?
- Continue the mortgage? Swiss banks rarely grant loans for German property.
- Utilise tax deductionsInterest, maintenance costs and depreciation.
- Check inheritance regulationsNote the different taxation in the two countries.
- Obtain a property valuation: Current market value is decisive for sale or lending.
- Customise insurancesCheck building, liability and loss of rent insurance.
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Counselling team
Our advisory team and office staff specialise in emigrants from Germany and Austria, and we help people emigrate to Switzerland every day. If you would also like to emigrate to Switzerland, please get in touch using the contact form and get to know our team in Zurich - we look forward to hearing from you! 🤗
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Do you have any questions?
You want to emigrate to Switzerland? We are here for you. Our consultations are free of charge. You can reach us via the contact form or drop by for a coffee in Zurich.
