Second home and taxation: your most frequently asked questions

What do I have to declare and in which country?

My secondary residence in France

To be declared in Switzerland:
Although a second home abroad is subject to tax in the country where it is located, it is important to declare it in Switzerland too. This is because Switzerland does not levy tax on a holiday home owned abroad, but its value is taken into account when determining the rate of tax on wealth and income.

Determining the tax value of a property abroad varies from canton to canton. Some cantons use the purchase price at the historical rate on the date of purchase (Geneva), while others use the average rate for the year of purchase (Neuchâtel) or benefit from a 20% allowance (Vaud).

To be declared in France:
You have nothing to declare in France. However, you will have to pay :

• taxe foncière (tax for property owners)
• taxe d'habitation (tax for the person living in the property)

My second home in Switzerland

The taxation of a second home in Switzerland is similar to that of a principal residence, and is levied by the canton in which the property is located.

The rental value of the property must be declared as income. This value (not to be confused with the actual rental income) is calculated on the basis of the theoretical rent that could be received if the house were rented out, based on the market price and according to cantonal rules.

The tax value is added to your assets.

Can I benefit from tax deductions in Switzerland?

My second home in France

Mortgage interest will be deducted from the rental value of this property, in proportion to your gross assets in France.

Mortgage interest will be deducted from the rental value of the property, in proportion to your gross assets in France. Maintenance work may be deducted from the rental value or rental income, and may even produce a negative result. This negative amount will be added to or subtracted from the taxable base of Swiss income, to obtain the tax rate. Taxable income will remain unchanged.

My second home in Switzerland

Some cantons allow a tax deduction forwear and tear caused by letting out your second home.
In all cases, mortgage interest and maintenance costs are deductible, as for a principal residence.

What happens in the event of resale?

My second home in France

On resale, the capital gain will be taxed at 19%, plus 7.5% solidarity levy, exclusively in France. Depending on the length of time the property has been held, allowances may be deducted to minimise the taxable amount.

My second home in Switzerland

This depends on the canton in which the second home is located and the length of time the property has been held.

Reinvesting your gains on sale
Property reinvestment is the deferred taxation of property profits and gains on the sale of your property, allowing the tax corresponding to the sum you reinvest to be deferred.

In the case of the sale of a principal residence, property reinvestment is possible, but please note that this is not the case for the sale of a second home.

What happens in the event of inheritance or bequest?

My second home in France

If a Swiss resident passes on a property in France as part of an inheritance or gift, the tax treatment will be carried out exclusively by France.
Taxation will be carried out after the possible allowances have been applied and according to the family relationship between the deceased/donor and the heir/recipient.

My second home in Switzerland

If the heir lives in Switzerland, inheritance law will be applied according to the canton and the relationship between the deceased and the heir.

If the heir lives abroad, local tax regulations will apply.

As a Swiss resident, will I be subject to wealth tax in France?

My second home in France

If your net property wealth (mortgage debts deducted) in France exceeds €1,300,000, you will be subject to Impôt sur la Fortune Immobilière (IFI) from €800,000 (threshold effect). This tax must be paid to the French tax authorities.

On the Swiss side, the "French" assets will be added to the existing assets solely for the purposes of calculating the rate, but will have no impact on the taxable assets.

In the case of bullet loans (repayment in one go when the loan matures), a notional repayment is taken into account by the French tax authorities when calculating the IFI, which means that wealth increases each year.

To deduct the debt, a proportional breakdown must be made to determine what is deductible and what is not. This breakdown will have an impact on both French and Swiss tax.

Ifyou need personal assistance, our advisers will be happy to help you with the administrative formalities on both sides of the border.