Quick answer: When selling property in the canton of St. Gallen, you pay capital gains tax on real estate on the profit. The longer you have owned the property, the lower the tax rate. With good documentation, you can significantly reduce the tax.
You sold your house -- and then the tax bill arrives
The sale is complete. The purchase price is in your account. You are pleased. Then the tax office gets in touch. The capital gains tax on real estate is due. And it can be hefty if you are not prepared.
The good news: with the right planning and documentation, the tax can be legally and significantly reduced.
What is the capital gains tax on real estate?
The capital gains tax on real estate taxes the profit from selling a property. In the canton of St. Gallen, it is levied as a separate tax.
The formula is simple:
Sale price minus acquisition costs = taxable capital gain on real estate
The higher your acquisition costs, the lower the taxable gain. That is why documentation is so important.
How is the tax calculated in the canton of St. Gallen?
What counts as acquisition costs?
Everything you have invested counts:
- Original purchase price (or market value in case of inheritance or gift)
- Transfer tax and notary fees at purchase
- Value-enhancing investments with receipts
- Agent fees at sale
- Advertising costs
How does the ownership period affect the tax rate?
In the canton of St. Gallen, there is no automatic surcharge on acquisition costs. Instead, the tax rate decreases with the length of ownership:
- Under 2 years: High tax rate with speculation surcharge.
- 2 to 10 years: The tax rate decreases.
- Over 10 years: Significantly reduced tax rate.
- Over 20 years: Even lower rate.
If you are not in a hurry, it is better to wait a little longer.
How can I legally reduce the tax?
1. Document value-enhancing investments
Every investment that increases the value of your property raises the acquisition costs. Collect all receipts for:
- Conversions and extensions
- New kitchen or bathroom of a higher standard
- Landscaping
- Energy-efficient improvements such as heat pump or insulation
2. Use replacement purchase provisions
Are you buying a replacement property for the same use in Switzerland within two years? Then the capital gains tax on real estate is deferred. You only pay when selling the new property.
3. Long holding period
The longer you hold the property, the lower the tax rate. With over 20 years of ownership, the tax in the canton of St. Gallen is significantly lower.
4. Transfer to descendants
In the case of inheritance or gift, no capital gains tax on real estate is due. The tax is deferred. But note: your descendants inherit the original acquisition costs.
Practical example from Wittenbach
The Keller family bought an apartment in Wittenbach in 2016 for CHF 550'000. Over the years, they invested CHF 80'000 in a new kitchen and bathroom renovation. In 2026, they sell for CHF 750'000.
- Sale price: CHF 750'000
- Acquisition costs: CHF 550'000 + CHF 80'000 + CHF 15'000 (ancillary costs) = CHF 645'000
- Taxable gain: CHF 105'000
- Ownership period: 10 years, therefore reduced tax rate
Without the documented investments, the taxable gain would have been CHF 185'000. Almost double. The receipts saved the Keller family thousands of francs in taxes.
Expert tip from Nico: Collect all receipts for value-enhancing investments from day one. Set up a folder, physical or digital. When selling in 10 or 20 years, you will be glad you documented everything.
Conclusion
The capital gains tax on real estate can be a major item when selling. But with good planning and complete documentation, it can be significantly reduced. Also read our tips for the best possible sale price. At Rüttimann Vision, we advise you on the optimal timing for your sale and help you claim all deductions.