Receiving a property through inheritance is often associated with mixed feelings. On the one hand, it is a valuable legacy, but on the other hand, questions can arise regarding administration, maintenance and, in particular, tax aspects. If you have inherited a property in the canton of Zurich and are considering selling it, it is essential to familiarise yourself with Zurich inheritance tax and its impact on your planning.
Inheritance tax is regulated at cantonal level, which means that the provisions and rates vary from canton to canton. In the canton of Zurich, the acquisition of assets upon death is subject to inheritance tax. The amount of this tax depends on the degree of kinship to the deceased and the value of the inherited assets. It is important to understand that inheritance tax is generally owed by the heirs before the inheritance is even divided or a property is sold. A sound knowledge of this matter is crucial in order to avoid unnecessary costs and organise the sales process efficiently.
How high is the inheritance tax in the canton of Zurich?
Inheritance tax in the canton of Zurich is progressive and depends on the degree of kinship and the amount of inherited assets.
Tax exemptions and allowances:
- Spouses and registered partners as well as direct descendants (children, grandchildren) are completely exempt from inheritance tax in the canton of Zurich. This is a significant relief for many heirs.
- There are allowances for other degrees of kinship. For example, the tax-free amount for parents is CHF 200,000 and CHF 15,000 for siblings. The tax-free amount is generally lower for unrelated persons.
Tax rates (basic rates, as at approx. 2024/2025 - these are subject to change and should always be checked on the official cantonal website):
The tax rates are determined on the basis of the basic rate and multiplied by a multiplier depending on the degree of relationship.
- Parents: 2% to 6% (multiplier 1)
- Grandparents: basic rate times 2
- Siblings: basic rate times 3 (results in 6% to 18%)
- Aunts, uncles: basic rate times 5
- Non-related persons: Basic rate times 6 (e.g. up to 36% or more, depending on the amount)
Example calculation (simplified and without deduction of allowances):
For an amount of CHF 500,000, for example, the tax burden could be as follows:
- Parents: approx. CHF 12,000
- Siblings: approx. CHF 67,500
- Non-related persons: approx. CHF 140,400
It is important to note that these rates are complex and depend on the exact amount of the inheritance. For precise calculations, it is advisable to consult the official information provided by the cantonal tax office. A useful resource for detailed information on inheritance and gift tax in the canton of Zurich can be found on the official website of the canton.
When do you have to pay inheritance tax in the canton of Zurich?
Inheritance tax is due as soon as the inheritance has been accepted. The exact deadlines for filing the tax return and paying the tax are set by law. In the canton of Zurich, inheritance tax must generally be paid within a certain period after receipt of the tax assessment. The Zurich tax office sends out a corresponding assessment as soon as all the relevant information is available. It is crucial to adhere to these deadlines in order to avoid interest on arrears or other consequences.
The tax liability arises upon the death of the testator. The heirs are jointly and severally liable for the tax claims arising from the estate. This means that the tax authorities can demand payment from each individual heir until the entire amount has been paid.
Which part of the inheritance must be taxed in which canton?
Swiss tax law stipulates that inheritance tax is primarily levied at the deceased's last place of residence. This applies to movable assets. In the case of real estate, however, the so-called location principle applies: real estate is taxed in the canton in which it is physically located.
This means for you:
- If the deceased was resident in Zurich and the inherited property is also located in Zurich, the canton of Zurich is responsible for inheritance tax on this property.
- If the deceased was resident in another canton but the property is located in Zurich, inheritance tax on the property is levied by the canton of Zurich, while the remaining movable assets are taxed in the deceased's canton of residence.
- If the inherited property is located outside Switzerland, it is generally not subject to Swiss inheritance tax, but may be taxed in the respective foreign country.
Properties in different cantons are subject to intercantonal tax differentiation in order to avoid double taxation. This is a complex issue where the support of a tax expert or an experienced property company is essential.
Who is liable for tax?
In the canton of Zurich, the recipients of the inheritance, i.e. the heirs or beneficiaries of a legacy, are liable to pay tax. Unlike in some other systems, it is not the estate as a whole that is taxable, but the individual acquisition of each heir. The tax is therefore calculated individually on the share that each person receives.
As already mentioned, spouses, registered partners and direct descendants are exempt from this tax liability. In the case of other degrees of kinship or unrelated persons, the tax liability comes into force. The heirs are jointly and severally liable for the entire inheritance tax debt of the estate.
Saving inheritance tax in the canton of Zurich - is it possible?
Although direct descendants and spouses are exempt, there are ways for other heirs to optimise or minimise their tax burden:
Early estate planningGifts during one's lifetime (subject to gift tax) can be used to transfer assets before death, which can bring tax advantages depending on how it is organised. In the canton of Zurich, gifts are also subject to tax, but the tax-free amounts and rates are similar to inheritance tax.
Company successionIn the canton of Zurich, there are reductions in the tax burden for the transfer of companies under certain conditions, especially if the company is continued by the heir (up to 80% reduction).
Correct inventoryAccurate and complete recording of all assets and debts of the estate is crucial. Errors or missing information can lead to a higher or incorrect tax assessment.
Professional adviceConsultation with tax and property experts is the most effective way to optimise the inheritance tax burden. They know the current laws, allowances and can develop customised strategies tailored to your specific situation. This can include, for example, the optimum sales strategy for your inherited property to take into account not only inheritance tax but also property gains tax.
Why professional support is essential when selling a property
The sale of an inherited property in Zurich is more than just a transaction. It requires a comprehensive understanding of the local property market, the legal framework and the tax intricacies. Emotions can play a role, especially when it comes to an inherited property, and objective, professional support is invaluable.
Our team specialises in helping heirs sell their properties in Zurich. We offer comprehensive support - from the precise valuation of your property to the creation of a customised marketing strategy and negotiations with potential buyers. We work closely with tax experts to ensure that all aspects of inheritance tax in Zurich and property gains tax are optimally taken into account and that you find the best solutions for you.
Our aim is to make the sales process as simple and transparent as possible for you. We take the burden of the complex details off your shoulders so that you can concentrate on other important matters. With our expertise in the Zurich property market and our focus on your individual needs, we ensure that your inherited property is sold at the best possible price and under optimal conditions.
Conclusion
Selling an inherited property in Zurich can be a challenge, especially when it comes to inheritance tax in Zurich and the canton's complex regulations. However, with the right professional support, this process can be significantly simplified. We are committed to your success and the smooth handling of the sale of your estate property. Contact us today for a no-obligation consultation and find out how we can best support you to realise the full potential of your inherited property in Zurich.
