What is Real Estate Gains Tax?
Real estate gains tax is a tax levied on the profit made from selling a property. The taxable gain is the difference between the selling price and the original purchase price, after deducting eligible expenses. In the canton of Aargau, real estate gains tax applies only to privately-owned properties (i.e. not to business asset).
Who Collects the Real Estate Gains Tax in the Canton of Aargau?
In the canton of Aargau, the real estate gains tax is collected solely by the canton — not by individual municipalities. This means the tax amount is the same no matter which town or city your property is located in.
Real Estate Gains Tax Rates in the Canton of Aargau
The standard real estate gains tax rate in Aargau starts at 40% if you sell within the first year of ownership. After that, the tax rate drops by 2% each year during the first 11 years, and by 1% per year from the 12th year onward. Once you’ve owned your property for more than 25 years, the minimum tax rate of 5% applies.
Here's a detailed breakdown of the real estate gains tax rates in the Canton of Aargau.
|
Ownership Duration |
Tax Rate |
|
Up to 1 year |
40% |
|
Up to 2 years |
38% |
|
Up to 3 years |
36% |
|
Up to 4 years |
34% |
|
Up to 5 years |
32% |
|
Up to 6 years |
30% |
|
Up to 7 years |
28% |
|
Up to 8 years |
26% |
|
Up to 9 years |
24% |
|
Up to 10 years |
22% |
|
Up to 11 years |
20% |
|
Up to 12 years |
19% |
|
Up to 13 years |
18% |
|
Up to 14 years |
17% |
|
Up to 15 years |
16% |
|
Up to 16 years |
15% |
|
Up to 17 years |
14% |
|
Up to 18 years |
13% |
|
Up to 19 years |
12% |
|
Up to 20 years |
11% |
|
Up to 21 years |
10% |
|
Up to 22 years |
9% |
|
Up to 23 years |
8% |
|
Up to 24 years |
7% |
|
Up to 25 years |
6% |
|
After 25 years |
5% |
How the Taxable Gain is Determined
In Aargau, the real estate gains tax is based on your taxable gain — the difference between the sale proceeds and your eligible costs. Eligible costs include the original purchase price and any value-adding improvements you made to the property. Routine maintenance costs, however, are not deductible.
If no purchase price exists — for example, if the property was a gift — the market value will be used instead.
According to the Aargau Tax Act (§ 104), deductible expenses include:
- Investment costs such as planning, construction, expansion, and improvements that increase the property’s value
- Landowner contributions
- Purchase and selling expenses, including land registry and notary fees, brokerage commissions, and listings
- Value-added charges
- Early repayment penalties for termination of a fixed-rate mortgage due to the property's sale.
Flat-Rate Deduction of Investment Costs in the Canton of Aargau
If you sell a developed property that you’ve owned for more than 10 years, you can choose between two options:
- Deduct your actual documented investment costs, or
- Use a flat-rate deduction based on the sale price.
Here’s how the flat-rate deduction works:
|
Ownership Duration (years begun) |
Flat Rate (% of Sale Proceeds) |
|
11 years |
80% |
|
12 years |
79% |
|
13 years |
78% |
|
14 years |
77% |
|
15 years |
76% |
|
16 years |
75% |
|
17 years |
74% |
|
18 years |
73% |
|
19 years |
72% |
|
20 years |
71% |
|
21 years |
70% |
|
22 years |
69% |
|
23 years |
68% |
|
24 years |
67% |
|
25 years |
66% |
|
More than 25 years |
65% |
The flat-rate deduction covers everything — including the purchase price, commissions, notary fees, and investment costs.
In short: if you choose the flat rate, you cannot claim any additional deductions.
Who Has to Pay the Real Estate Gains Tax?
In the canton of Aargau, the real estate gains tax applies whenever a property is sold at a profit. However, only private individuals selling property from their personal assets are subject to this tax. Properties held as business assets are taxed differently — through the regular income or profit tax system.
It's not just outright sales that trigger the real estate gains tax. Other situations that are treated as a sale include:
- Property exchanges
- Gifts
- Inheritances
- Foreclosures
- Changes in shared ownership (unless converting to condominium ownership without changing shares)
There are also other types of transactions treated like a sale for tax purposes:
- Transferring control (e.g., transferring shares in a property company)
- Creating easements or restrictions on the property in exchange for payment
- Moving a property from private to business assets (excluding agricultural or forestry land)
When Can Real Estate Gains Tax Be Deferred?
Under certain conditions, you can defer the real estate gains tax in the canton of Aargau. These include:
- Transfers due to inheritance, anticipated inheritance, gifts, or partial gifts
- Transfers between direct relatives or their spouses
- Transfers between spouses
- Mergers of marital property
- Corporate restructurings.
Additionally, private sellers can defer the tax if they sell a property used as a primary residence and reinvest the proceeds in another home within three years. If you buy the replacement property before selling the old one, you have two years to complete the sale and still qualify for deferral.
Taxation System: Monistic vs. Dualistic Approach
The canton of Aargau uses a dualistic taxation system:
- Profits from private real estate sales are subject to real estate gains tax.
- Profits from business property sales are taxed under regular income or corporate tax.
Tax-Free Gains in the Canton of Aargau
There are no tax-free allowances for the real estate gains tax in the canton of Aargau.
Calculate Your Real Estate Gains Tax in the Canton of Aargau
Want to know how much real estate gains tax you’ll owe? Use our quick online calculator to estimate your taxable gain, applicable tax rate, and approximate tax bill when selling a property in the canton of Aargau: https://neho.ch/en/real-estate-gains-tax-calculator-aargau
