When you sell your property in Geneva, you’ll be required to pay a tax on real estate profits, known as the Impôt sur les Bénéfices et Gains Immobiliers (IBGI). This is a capital gains tax based on the profit made from the sale.
As long as the property is considered part of your private assets (as opposed to commercial assets), the tax rate is progressively reduced based on how long you’ve held the property:
50% if held for less than 2 years
40% if held for at least 2 years, but less than 4
30% if held for at least 4 years, but less than 6
20% if held for at least 6 years, but less than 8
15% if held for at least 8 years, but less than 10
10% if held for at least 10 years, but less than 25
2% if held for 25 years or more
In the case of an inheritance, and as long as the death occurred after January 1, 2001, the years of ownership by the deceased are carried over to the heirs.
Note that certain expenses — such as brokerage fees or value-enhancing renovations (not regular maintenance) — can be deducted when calculating taxable capital gains.
Good to know: it is possible to defer this tax if you reinvest the proceeds from the sale into a new primary residence within five years.
The sale of shares in real estate companies that own property in Geneva is also subject to the IBGI and must be declared accordingly.
Important: If the property is classified as part of your commercial assets, any capital gain will simply be added to your income and taxed at your regular income tax rate.
In the context of your private residence, this is usually not the case. However, if there’s any doubt, we strongly recommend consulting a tax expert. You may also request a preliminary ruling (ruling de principe) from the Geneva Tax Administration before putting your property on the market, to avoid any unpleasant surprises at the time of sale.
Excerpt from our guide: Selling Your Home in 42 Questions