Real estate in Swiss estate
June 19, 2019
Estate refers to all active and passive patrimonial values left by the deceased when he dies. It is good to know that real estate is not distinguishable from other heritage values. It is a whole that is embedded in the succession. However, real estate is a major issue during inheritance because it is often sentimental. Similarly, it is also more difficult to share than money. This is why we will see here the rules that apply in Switzerland in case of succession.
The different heirs in Switzerland :
Without a will or an estate contract, it is the inheritance law that will affect your estate after your death. The heirs follow an order established by law. First, there is the surviving partner and the descendants (children, grandchildren and even great-grandchildren). If there is none, it is the parents or their descendants who inherit. If there are no parents at all, the estate is entirely the responsibility of the state. Of course, it is possible to designate on your will or on your declaration of succession one or several people to inherit. To know that if there is more than one heir, the law provides for the constitution of a community of heirs. This will be formed just after death for the distribution of all assets.
What are the expenses of an estate?
It is important to know that direct heirs do not have to pay inheritance tax in Switzerland. This is a real advantage that encourages the Swiss to invest in real estate. Indeed, the children will not have to pay to recover the family home for example.
The tax rate then varies according to the degree of relationship with the deceased. The closer the relationship is, the lower the rate will be. To know this rate, you have to ask the tax administration of the last canton of residence of the deceased. If a property is in the estate, then it must be seen with the municipality where it is located.
If the heirs are third parties in relation to the deceased, the inheritance tax may amount to 54.6% of the sum received.
How is the property assessed?
The property will be valued in the tax declaration of the heir at the value that has been indicated in the declaration of succession. And that, regardless of the relationship of the heir. This value corresponds to a market value that may be very different from the value on which the deceased was taxed. Hence the importance of properly evaluating the property in the declaration of succession. And for good reason, it is this amount that will serve as a basis for the valuation of property for wealth tax and property tax.
(In the Geneva canton, there is nevertheless a provision that allows the heir who was a common household with the deceased to benefit from a suspension of the adjustment of the tax value.)