The transfer of residential property to the next generation can have many reasons, such as early estate planning, tax considerations, or family support. To find a solution tailored to the individual situation, it is essential to address the matter early. In particular, tax, inheritance, and practical aspects should be carefully considered.

Ways to transfer property:
- Sale at market value
- Mixed gift (sale under market value)
- Complete gift / inheritance advance

Sale at fair market value
In this option, the residential property is sold to the descendants at the current market value. This constitutes a regular sale, treated legally as a third-party transaction. Tax consequences (e.g., capital gains tax on real estate) generally apply immediately.

Mixed gift (sale under market value)
This form is commonly used for transfers within the family. It involves a partially compensated transfer, for example through:
- Assumption of mortgages
- Establishment of usufruct or residential rights
- Establishing a pre-emptive purchase right
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If the consideration is around 20–25% or more below market value, this is referred to as a partial gift. Depending on the canton, this may be treated differently for tax purposes:
- In certain cantons, it is possible to fully defer the property capital gains tax
- In other cantons, only partial deferral of the tax applies.

Key points to consider in inheritance cases
- The transfer is usually classified as an advance inheritance
- Any increase in value since the transfer may be subject to compensation to co-heirs
- Mandatory share claims of the other heirs must be preserved
- A later sale to third parties can result in higher capital gains tax than if the property had originally been acquired at market value

Deviating arrangements can be made in the transfer agreement, but always within the framework of mandatory inheritance law.

Full gift / advance inheritance
A full, gratuitous transfer constitutes a gift or an advance inheritance. In this case:
- The recipient must credit the value of the property against their inheritance share upon the testator’s death
- There may be an obligation to compensate co-heirs
- Mandatory inheritance claims must be strictly observed

Tax treatment:
In most cantons, the real estate capital gains tax is treated on a deferral basis, meaning it becomes payable only upon a later sale by the gifted person.

The transfer of residential property to the next generation
represents a significant personal and financial change for both parents and children,
and can have further implications, such as on nursing home costs.
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For an initial, free, and non-binding informational consultation, please contact us by email at kontaktanfrage@vpz.ch or call our free VPZ hotline at 0800 822 288 to schedule an appointment directly with your advisory specialist. Comprehensive planning with foresight coordinates your situation, identifies optimization opportunities, and ensures long-term success.