Sell or let? The decision guide for owners
Anyone who no longer lives in a house themselves has two options: sell and invest the capital elsewhere – or let and generate long-term income. Both can be right. The only wrong thing is to decide on gut feeling.
In brief
- Letting pays off if the net yield exceeds alternative investments and you are willing to bear the effort
- Selling pays off if you need capital, can use the replacement purchase or the house needs renovation
- Tax-wise: on sale, property gains tax once; when letting, income tax on the rental income every year
- At ImmoBilà both routes only cost on success – we calculate both for you
The decisive questions
- Do I need the capital – for a new home, retirement, the children?
- Can I use the tax deferral via replacement purchase (only when selling and buying again)?
- What is the condition? Major renovations (roof, heating, façade) burden the yield for years
- Do I want to deal with tenants, repairs and statements – or pay for it?
- How is the location developing? Good locations in the Baselbiet have gained a lot of value in 15 years
Calculating the yield realistically
The gross yield (annual rent ÷ market value) often looks good. What counts is the net yield: after deducting maintenance and reserves (1–1.5 % of the building value per year), management, insurance, vacancy risk and mortgage interest, single-family homes in the Baselbiet usually leave a net yield of 2 to 3 % on the market value. Similar for condominiums with a renovation fund. On top of that comes the possible increase in value – which nobody guarantees, however.
Taxes: two worlds
- Selling: property gains tax once (3–25 % on the gain) and transfer tax 1.25 % – deferrable with a replacement purchase
- Letting: rental income is income every year and increases the progression; the property counts towards taxable wealth; in return, maintenance, management and debt interest are deductible
- Selling later: the property gains tax is still due – only later, but with a longer holding period
Effort and risk
Letting a single-family home is more work than a flat in an apartment building: garden, heating, roof and grounds are the owner’s responsibility. A change of tenant every few years means vacancy and refurbishment. Anyone not wanting to bear the effort themselves budgets 4–6 % of the rental income for management. Risks: rent losses, tenant damage, rising interest on the mortgage.
Worked example single-family home Füllinsdorf
Letting: market rent around CHF 2,900/month = CHF 34,800/year. Less maintenance/reserves CHF 9,000, insurance/management CHF 3,000, mortgage interest CHF 6,800, vacancy reserve CHF 1,400 → net income around CHF 14,600 = 2.4 % on the equity of CHF 600,000 before tax. Sale: proceeds CHF 1,000,000, repayment of the mortgage, property gains tax depending on investment costs (with a gain of CHF 240,000 around CHF 60,000, deferred with a replacement purchase). Freely available capital around CHF 540,000–600,000.
Conclusion and decision guide
- Sell, if: need for capital, replacement purchase possible, renovation backlog, no interest in management, community of heirs without a common line
- Let, if: no need for capital, good location with potential for value growth, property in good condition, willingness for the effort or budget for management, children to move in later
- Combine both: let first, sell in 5–10 years with a longer holding period – if the market allows
We calculate both variants with your figures – free of charge, and you decide. If required with Roman Frey, our financial adviser, for taxes and financing.
Questions on this topic.
Can I let the house and sell it later with a replacement purchase?
No – the replacement purchase requires owner-occupation until the sale.
- Anyone letting in the meantime loses the deferral
- Exception: short transitional letting – clarify case by case with the tax administration
What about the imputed rental value if I let?
It no longer applies – instead you pay tax on the actual rent.
- Maintenance, management and debt interest remain deductible
How quickly will I find a tenant for a single-family home?
In the Baselbiet usually within 4 to 8 weeks – single-family homes to rent are rare.
- Prerequisite: a market-based rent
- Families often look for the start of the school year
Sell or let?
We calculate both variants with your figures – free and honest.
Let’s talk about your property.
Call or write to us – reply within 24 hours.
ImmoBilà GmbH · Schneckelerstrasse 1, 4414 Füllinsdorf
info@immobila.swiss · Mon–Fri 8:00–12:00, 13:30–17:30