This article compares the tax implications of two forms of investment: holding real estate directly as part of one’s private assets and holding it indirectly through a real estate company. It highlights how tax treatment differs, particularly during the holding and sale phases, and how significantly location, structure, and personal circumstances influence the effective net return.
When holding property in a private portfolio, progressive income tax rates, the deductibility of maintenance costs, and the deduction of interest on debt have a particularly significant impact. With the system change, the imputed rental value is expected to be eliminated starting in 2028, while deductions will be severely restricted—especially for owner-occupied properties.
Real estate companies are generally subject to proportional income tax and can claim additional expenses such as business-justified depreciation, provisions, and interest on debt for tax purposes. Dividend distributions generally result in economic double taxation at both the corporate and shareholder levels. At the same time, the company has considerable flexibility in choosing between retaining and distributing profits, which allows it to influence the timing and extent of taxation at the shareholder level.
Upon sale, there are significant differences depending on the investment structure. Private individuals are subject to real estate gains tax at the cantonal and/or municipal level, while they realize a tax-free capital gain at the federal level. Depending on the cantonal system (dualistic or monistic), capital gains on real estate held by real estate companies are subject either to real estate gains tax or—in accordance with the direct federal tax—to ordinary income tax. The sale of shares in real estate companies may also constitute an economic change of ownership and thus trigger real estate gains tax liability.
The article makes it clear that no single structure is universally advantageous. The actual circumstances are decisive; a careful analysis of each individual case is essential to determine the tax-optimized form of investment.
