Vaud capital gains tax when you sell a rental apartment

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Vaud takes a share of the gain every time an apartment changes hands, and the size of that share is set by one variable: how long you held it. Sell fifteen months after buying and the canton is entitled to 27% of the gain. Hold the same apartment twelve years and that gain is taxed at 13%. The building has not changed; the calendar has.

This guide sets out the scale in force under the Vaud law on direct cantonal taxes (art. 72 LI), what is added to and taken off the taxable gain, the 5% the notary withholds at the deed, and the one deferral most owners ask about. It applies in the same way whether you live in Switzerland or abroad.

The rate falls with every year you hold

Real-estate capital gains tax is not a flat percentage: it is a degressive schedule applied to the gain, with the rate attached to the length of ownership (durée de possession) and the first year the most expensive of all (art. 72 LI). The tax is assessed separately from your income tax, and it is due at the moment of the transfer.

Years of ownership	Rate on the taxable gain
Up to 1 year	30%
1 – 2 years	27%
2 – 3 years	24%
3 – 4 years	22%
4 – 5 years	20%
5 – 6 years	18%
6 – 7 years	17%
7 – 8 years	16%
8 – 9 years	15%
9 – 10 years	15%
10 – 11 years	14%
11 – 12 years	14%
12 – 13 years	13%
13 – 14 years	13%
14 – 15 years	12%
15 – 16 years	12%
16 – 17 years	11%
17 – 18 years	11%
18 – 19 years	10%
19 – 20 years	10%
20 – 21 years	9%
21 – 22 years	9%
22 – 23 years	8%
23 – 24 years	8%
From 24 years	7%

Two details are easy to miss. Years of personal occupation proven by the owner count double (art. 72 LI) — a rule written for people who lived in the apartment, so a rental history does not accelerate anything. And no tax is levied at all when the total of the gains you realise in the same fiscal year stays below CHF 5,000 (art. 62, lit. b).

What counts as the taxable gain

The taxable gain is the sale proceeds minus the acquisition price, plus the impenses — the improvements you financed (art. 66 LI). The acquisition price is the price you paid, but you may invoke the cantonal tax valuation in its place when that is more favourable (art. 67). Only costs inseparably linked to the acquisition or the sale, or which increased the value of the building, are recognised — and the burden of establishing them is yours (art. 70).

That is why the invoice folder is worth as much as the deed. Renovations documented year by year lower the taxable gain; the same work done in cash and never invoiced simply disappears from the calculation. And where the apartment was acquired in several stages — successive purchases, an extension, a major transformation — the gain is split so that each tranche keeps its own holding period and its own rate (art. 73).

At the deed, the notary holds back 5%

The tax is owed by the seller (art. 63 LI), and Vaud secures it at the source: the parties must deposit 5% of the sale price with a public officer or a recognised institution (art. 237 LI). In practice the notary keeps that amount out of the proceeds until the administration has issued the final assessment — which is why the sum you receive on the day of the sale is not the sum you had in mind.

When the tax is postponed — and why a rental rarely qualifies

Vaud defers rather than cancels the tax in defined cases: an inheritance, an advancement of inheritance or a gift; a transfer between spouses in connection with the matrimonial regime; and — the case owners ask about most — the sale of a home that served permanently and exclusively as the seller's own residence, where the proceeds are reinvested, within a reasonable delay, in a replacement home in Switzerland (art. 65 LI).

Same apartment, two exits, CHF 18,000 apart

Take a gain of CHF 200,000. Sold in year three, the rate is 22% and the tax comes to CHF 44,000. Sold in year twelve, the rate is 13% and the tax comes to CHF 26,000: the same building, the same price, CHF 18,000 more in your pocket because the calendar moved.

Which is not an argument for holding for ever. The floor is 7%, and after 24 years it still costs CHF 14,000 on that gain; a property kept only for the tax curve is a property not producing what it could elsewhere. The point is that the exit year is a financial decision, and it belongs in the sale model next to the notary's fees and the agency commission — not discovered at the signing table.

Two guides complete this one. Airbnb tax & VAT in Montreux: what owners actually owe covers the taxes you pay while you own and let the apartment, and Non-resident owner of a Swiss rental covers the annual Swiss return if you live abroad. The rest of the owner-side file — registration, night caps, mandates, revenue — sits in the owner guides hub.

Frequently asked questions

Sources: Vaud, loi sur les impôts directs cantonaux (LI, RSV 642.11) — art. 62 (no tax below CHF 5,000 of gains in the fiscal year), art. 63 (tax owed by the seller; spouses separately assessed but jointly liable), art. 66–67 (taxable gain, acquisition price, tax valuation), art. 70 (deductible costs), art. 72 (degressive rate scale by years of ownership, years of proven personal occupation counting double), art. 73 (successive acquisitions), art. 74 (five twelfths to the commune), art. 237 (5% consigned at the deed). Text of the law as published by the Vaud tax administration (ACI). General information, not tax advice: the assessment depends on the file and on the fiscal value recognised for the property.