Inherit and bequeath property – here’s how

Do you want to make sure your property is left to your descendants when you die, instead of being sold off? Or have you inherited a property and are unsure of what to expect? We’ve got the lowdown on property inheritance.  

Many people put off dealing with inheritance-related matters, as they do not want to think about their own death. But if you own a property and do not want it – in the worst-case scenario – sold off when you die, you should get your estate planning sorted out sooner rather than later. People who are set to inherit property in the future should also work out early on which costs and obligations they will face, so they don’t get a surprise when someone dies.

Swiss inheritance law – who gets what?

If the person who dies leaves no will, their assets are shared equally among their heirs, in accordance with the law. In this case, Swiss inheritance law observes distribution per stirpes. This is structured as follows:

1. Parentela: own children
   
   
   
2. Parentela: parents and their descendants; i.e. the person’s siblings and the siblings’ 
                      children and grandchildren
   
   
   
3. Parentela: grandparents and their descendants; i.e. aunts and uncles and their
                     children and grandchildren
   
   

When someone dies, heirs from a higher parentela cancel out the lower parentela. This means that if their own children are alive, the second parentela and third parentela inherit nothing. If the person who dies has no children of their own, then the second parentela come into play. If there are no longer any heirs on that level, the assets are split between the third parentela.

Sample calculations and explanations on how inheritance shares are calculated can be found in our inheritance guide.

Writing a will and deciding who inherits what

If you would like to choose who inherits which property, you must make out a last will and testament. However, you cannot choose freely, as the law of forced heirship applies in Switzerland. When you die, your descendants and spouse or registered partner are entitled to a forced share. If you do not have any children, then your parents are entitled to a forced share of your estate. Our inheritance guide has more information on who is entitled to which forced shares.

I have inherited property. What now?

Inheriting property also means inheriting obligations. The transfer of assets in Switzerland is often complicated from a tax perspective, as each canton has different inheritance and gift tax systems. The place of residence of the person who died applies. If the property is in a different canton, tax law is applied proportionally between cantons, which makes it even more complicated.

Many cantons also apply a property transfer tax: this tax is due as soon as the property changes hands, even if no profit has been made. The rate of this tax varies between cantons. Some cantons waive property transfer tax entirely.

If you have inherited property and would like to sell it at a later date, you will have to pay capital gains tax on the property, which is calculated based on the difference between the purchase price and sale price. This also depends on the canton where the property is located. You can find out more about capital gains tax on property here.

Our guide has lots of information on inheritance law and estate planning, but it does not fully replace legal and tax advice. However, it offers an initial comprehensive look at what you need to consider and where costs might apply. You can find our inheritance guide online or in print in our shops. Feel free to stop by – we’d love to see you!