Selling an apartment building: capitalised earnings value, buyers, taxes and procedure in the Baselbiet
- How the capitalised earnings value of an apartment building is derived
- Before the sale: getting income and documents in order
- Buyer groups and how they calculate
- Tenancy agreements, tenants and notification after the sale
- Taxes on the sale of an apartment building in Basel-Landschaft
- The sale process: discreet or public
Selling an apartment building means selling not a home but a stream of payments. The buyer, whether a private investor, a pension fund or a property company, pays for the future net rents, and pays more the more secure and the higher they are. That is why the sale price of an apartment building is decided months before the listing: by the rent level, the ancillary cost statement, the condition of the building services and whether the documents stand up to the buyer’s scrutiny. This guide explains how the capitalised earnings value is calculated and how you can influence it, which buyer groups pay which prices, what happens to the tenancy agreements in a sale, how property gains tax on investment properties is calculated in the canton of Basel-Landschaft and how the sale process works. With a worked example from Pratteln.
In brief
- The price of an apartment building is derived from the capitalised earnings value: sustainable net rental income divided by the capitalisation rate; at a capitalisation rate of 3.5 %, every franc of net rent is worth around CHF 29 in sale price
- Before the sale, check rents against the customary local level, let vacant units, clean up the ancillary cost statements and prepare the last three years’ annual accounts properly; buyers check everything
- Tenancy agreements pass to the buyer by law (sale does not break a lease); tenants do not have to consent, but must be informed in writing after the transfer of ownership
- Property gains tax in Basel-Landschaft: the gain is the sale price minus investment costs, including value-enhancing investments; after 20 years of ownership the rate falls significantly, and a surcharge applies for short periods of ownership
- Buyer groups: private investors up to around CHF 5 million, property companies and foundations above that, pension funds from around CHF 10 million; if you know the buyer pool, you advertise differently and negotiate differently
How the capitalised earnings value of an apartment building is derived
For investment properties, what counts is the capitalised earnings value, not the intrinsic value. Buyers and banks calculate with it, and if you understand it, you can improve it before the sale.
The formula: Capitalised earnings value = sustainable net rental income ÷ capitalisation rate. Net rental income is the sum of the annual net rents excluding ancillary costs, minus the owner’s costs: maintenance and repairs, management, insurance, operating costs that cannot be passed on to tenants, provisions for renewal and an allowance for vacancy risk. Banks and valuers put these costs at a flat rate of 15 to 25 % of gross rents, rather more for older buildings.
The capitalisation rate: It is made up of the risk-free interest rate, a premium for property risk and, depending on location, condition and tenant mix, a further premium or discount. In autumn 2026, rates for residential properties in the Basel region range between 3.0 and 4.5 % depending on location and condition; in Liestal or Pratteln rather 3.5 to 4.0 %, lower in the agglomeration municipalities towards Basel, higher in remote municipalities. A difference of half a percentage point in the rate changes the value by around 12 to 15 %.
Worked example from Pratteln: Apartment building with six flats, built in 1978, gross rents CHF 132,000 per year. Operating costs 20 % = CHF 26,400, net rental income CHF 105,600. Capitalisation rate 3.75 %: capitalised earnings value CHF 2,816,000. At 3.5 %: CHF 3,017,000. At 4.0 %: CHF 2,640,000. The room for negotiation from the rate alone is therefore almost CHF 400,000, and every measure that increases net rental income by CHF 10,000 is worth around CHF 270,000 on sale.
Discounted cash flow method: Institutional buyers use DCF: they forecast the cash flows over ten years, including renovations and rent development, and discount them. The result is usually close to the capitalised earnings value, but explicitly takes upcoming renovations into account; a building whose heating and façade are due for replacement thus becomes visibly cheaper. Which method suits which situation is explained in the guide Property valuation: methods compared.
Before the sale: getting income and documents in order
With an apartment building, there should be at least three to six months between the decision and the listing. This is when the price is made.
Check the rents: If the rents are below the customary local level, the buyer pays less than the building would be worth, because rents under existing tenancy agreements can only be raised to a limited extent. Where the reference interest rate, inflation or value-enhancing investments allow an increase, it should be made before the sale, with the correct notice period and the official form; the rules are set out in the guide Calculating a rent increase. When tenants change, the market rent applies; how it is determined is shown in the guide Setting the rent.
Eliminate vacancies: An empty flat costs 25 to 30 times the annual rent on sale, not just the lost rent. Better to let it at a market rent before listing than to give the potential away to the buyer.
Clean up ancillary costs: Buyers ask for the ancillary cost statements for the last three years. Missing statements, flat rates without a basis or claims by tenants are red flags in due diligence. The requirements are set out in the guide Ancillary cost statement for landlords.
Maintenance and renovation backlog: Heating, roof, façade, pipework, windows, lift: for every component, the buyer wants to know age and condition. A condition report with a renovation plan and cost estimate that you commission yourself prevents the buyer from estimating the figures at your expense. Fix minor defects before the sale, but as a rule not major renovations: you rarely recoup the outlay in the price, unless they allow a rent increase.
Compile the documents: Rent roll with all tenancy agreements, rents, payments on account for ancillary costs, start dates and notice periods; annual accounts for the last three years; ancillary cost statements; insurance policies; land register extract, cadastral plan, building permits, plans; building insurance value; GEAK energy certificate, if available; records and invoices for major renovations. The complete list, and where to obtain the documents in the Baselbiet, can be found in the guide Documents for a house sale.
Buyer groups and how they calculate
Who buys an apartment building depends heavily on the price. Each group has different return expectations, different review processes and different timelines.
Private investors (up to around CHF 5 million): Doctors, entrepreneurs, heirs, retirees investing pension savings or the proceeds of a sale. They often buy in their own region, know the locations, decide faster and more emotionally than institutional investors, but expect a gross yield of 4 to 5 % and finance with a mortgage, which limits affordability and therefore the price. For buildings with four to twelve flats in the Baselbiet they are the largest group.
Property companies and foundations (CHF 3 to 20 million): Regional property companies, investment foundations, family offices. They review thoroughly, demand complete documents, calculate with DCF and pay the highest prices for clean properties in good locations, because they are satisfied with lower yields. In return, their processes take longer and their offers contain conditions.
Pension funds and investment funds (from around CHF 10 million): They are rarely an option for individual apartment buildings in the Baselbiet, except for large developments or portfolios. They buy through bidding processes and advisers.
Builders and developers: Of interest when the plot offers more than the existing building: unused plot ratio, adding storeys, replacement new build. They pay for the potential, not for the income, and their price can be above the capitalised earnings value; this requires clarification with the municipality on the zoning plan and plot ratio before the sale.
The tenants themselves: With smaller buildings, a sale to a group of tenants or a cooperative does occur. It takes time and rarely achieves the top price, but in return it allows a sale without a listing and without unrest in the building.
Whether selling is the right decision at all, or whether holding and letting brings more, depends on the yield, the age of the building and your life plans; for help with the decision, see the guide Sell or let.
Tenancy agreements, tenants and notification after the sale
The sale of a let building initially changes nothing for the tenants: the tenancy agreements pass to the buyer unchanged. Nevertheless, there are obligations and pitfalls.
Sale does not break a lease: Under Art. 261 of the Code of Obligations (CO), the acquirer takes over all tenancy agreements on transfer of ownership, with the same rents, notice periods and side agreements. The tenants do not have to consent to the sale, and they cannot prevent it. They only have a right of pre-emption if it has been agreed by contract and noted in the land register, which is rare for rented flats.
Termination by the buyer: The new owner can give notice for urgent personal use for the next statutory termination date, even if the agreement runs for a longer term; the previous owner is then liable to the tenant for the damage. With apartment buildings, this is in practice only relevant for individual flats. What counts as personal use is explained in the guide Termination for personal use.
Informing the tenants: There is no duty to inform during the sale, but viewings with prospective buyers require the tenants’ cooperation; they must tolerate viewings within reasonable limits, with advance notice. We recommend informing the tenants with a short letter at the start of the sale: sale planned, agreements remain, viewings will be announced. This prevents rumours and notices given out of uncertainty, which reduce the income and therefore the price. After the transfer of ownership, the tenants receive a letter from the buyer with the new owner, new payment details and new property management.
Rent deposits and payments on account for ancillary costs: Deposits remain in the tenants’ blocked accounts and are transferred to the buyer’s name. Payments on account for ancillary costs for the current period are apportioned between seller and buyer as at the cut-off date; the buyer prepares the statement for the tenants at the end of the period. This belongs in the purchase contract.
Property management: The management contract does not transfer automatically. Buyers often keep the existing property manager for a transitional period; whether the contract can be terminated should be checked before the sale.
Taxes on the sale of an apartment building in Basel-Landschaft
With an investment property, the gain is often large and the period of ownership long. Both shape the tax bill, and whether the property is held as private or business assets makes the biggest difference.
Property gains tax: In the canton of Basel-Landschaft, the gain from selling real estate held as private assets is subject to property gains tax. Gain = sale price minus investment costs; investment costs include the original purchase price, value-enhancing investments (extension, adding a storey, a first-time lift, comfort improvements), property transfer tax and notary fees on purchase, estate agent commission and advertising costs on sale, and an early repayment penalty charged by the bank. Value-preserving maintenance does not count; it has already been deducted for income tax. For ownership of more than 20 years, the market value 20 years ago can be used instead of the actual acquisition price, which is often more favourable for old buildings. The tariff is progressive and falls with the period of ownership; details and examples in the guide Property gains tax in Basel-Landschaft.
Example: The building in Pratteln was bought in 1998 for CHF 1,350,000; CHF 280,000 has since been invested in value-enhancing work (balcony extension, lift); sale in 2027 for CHF 2,850,000, estate agent costs CHF 60,000. Gain CHF 1,160,000. With 29 years of ownership, the reduced tariff results in tax of roughly CHF 150,000 to 200,000; the tax administration will calculate the exact figure on request before the sale, which we always recommend.
Business assets and professional property dealing: If the building belongs to a company (AG or GmbH), or if the seller is deemed a professional property dealer (several purchases and sales within a short time, high debt financing, specialist knowledge, building land reallocations), the gain is taxed as income, plus AHV contributions (old-age and survivors’ insurance). This can double the tax. If you hold several properties or have traded in recent years, clarify your status with a tax adviser before the sale.
Property transfer tax: In the Baselbiet, 2.5 % of the purchase price, borne half each by buyer and seller unless the contract says otherwise; at CHF 2,850,000, that makes CHF 35,625 per party. Details in the guide Property transfer tax in Basel-Landschaft.
Replacement purchase relief does not apply: Tax deferral on a replacement purchase only applies to owner-occupied property. If you sell an investment property and buy another, you pay property gains tax immediately. Alternatives are selling in stages, splitting into condominium units, or not selling at all and instead transferring the property to the next generation by usufruct or gift; see the guide Transferring the house to your children.
The sale process: discreet or public
In the Baselbiet, most apartment buildings are sold discreetly, without a listing. Whether that is the right route depends on the property and the buyer pool.
- Valuation and sales strategy (weeks 1 to 4): Capitalised earnings value calculation, review of rents and renovation needs, decision on price expectations, buyer pool and procedure. We calculate every property using both the capitalised earnings value and DCF, and give a range, not a wishful figure.
- Documents and sales documentation (weeks 3 to 8): Rent roll, annual accounts, condition report, plans, land register extract. These are used to compile sales documentation of 20 to 40 pages with all the figures a buyer needs for an offer.
- Approaching buyers (weeks 6 to 12): Discreet: targeted approach to 10 to 30 pre-qualified investors and companies from our network, with a confidentiality agreement before the documentation is released. Public: listing on the portals, broader demand, but unrest among tenants and neighbours and many unqualified enquiries. For buildings up to around CHF 5 million in a good location, we often combine both: discreet first, then public after four weeks if necessary.
- Viewings and offers (weeks 8 to 14): Viewings with advance notice to the tenants, usually in groups on a single day. Written offers with proof of financing by a deadline; if there are several offers, a second round.
- Due diligence and contract (weeks 12 to 20): The buyer reviews the documents, building fabric and tenancy agreements; the bank carries out its valuation. The purchase contract governs the cut-off date, the apportionment of rents, ancillary costs and deposits, liability for defects (usually excluded for investment properties, except for warranted characteristics and fraudulently concealed defects) and the bank’s consent if the mortgage is taken over.
- Public deed and transfer of ownership (weeks 16 to 24): In the canton of Basel-Landschaft before the district clerk (Bezirksschreiber), with payment of the purchase price into the notary’s account, entry in the land register, notification of the tenants and handover of the property management. The costs of the public deed and the land register are set out in the guide Notary fees and additional costs when selling a house; the general procedure in the guide Selling a house: the process.
From the first meeting to the transfer of ownership, selling an apartment building in the Baselbiet realistically takes four to six months; correspondingly longer with renovation assessments or rent adjustments before the start. This time pays off: a building let for CHF 500 more per month is worth around CHF 160,000 more on sale.
Questions on this topic.
How is the value of an apartment building calculated?
Via the capitalised earnings value: sustainable net rental income (gross rents minus 15 to 25 % operating costs) divided by the capitalisation rate, which in the Basel region in 2026 lies between 3.0 and 4.5 % depending on location and condition. Institutional buyers also use the DCF method.
What happens to the tenants if I sell my apartment building?
Nothing as far as the agreements are concerned: sale does not break a lease, and the buyer takes over all tenancy agreements. The tenants must tolerate viewings and are informed about the new owner after the transfer of ownership. The buyer can only give notice under the statutory conditions.
Which taxes apply when selling an apartment building in Basel-Landschaft?
Property gains tax on the sale price minus investment costs, with a reduction for long periods of ownership, plus property transfer tax of 2.5 %, which each party bears half of. For business assets or professional property dealing, the gain is instead taxed as income, plus AHV.
Should I still renovate before the sale?
Minor defects yes, major renovations as a rule no, unless they allow a rent increase that raises the capitalised earnings value. More important is a condition report with a cost estimate, so that the buyer does not estimate the renovation needs at your expense.
Should I sell the apartment building publicly or discreetly?
Up to around CHF 5 million in good locations, the combination often works well: first a targeted approach to pre-qualified investors, then a listing after a few weeks if needed. Larger properties are almost always sold discreetly or through a bidding process.
Can I defer property gains tax on an investment property?
No, replacement purchase relief only applies to owner-occupied residential property. Alternatives are selling in stages, splitting into condominium ownership or transferring the property to the next generation instead of selling.
Selling an apartment building in the Baselbiet?
We calculate the capitalised earnings value and DCF, prepare the rent roll and documents and approach precisely those investors who will pay the best price for your building. Discreetly, with a clear range instead of a wishful price.
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