What is different about acquiring a property as a company compared to buying it privately?

Tax treatment: Depreciation vs. imputed rental value

Perhaps the most striking differences in real estate acquisition lie in the ongoing taxation. Here, two worlds collide.

Private purchase: The imputed rental value as a burden

If you buy privately, you have to pay tax on the imputed rental value as fictitious income. In return, you can deduct maintenance costs and mortgage interest.

• The disadvantage: Investments that maintain the value of the property are tax-deductible, while those that increase its value (e.g., adding a conservatory) usually are not. Depreciation on the building's value is not possible for private individuals.

Company acquisition: The depreciation privilege

If you buy through a public limited company (AG) or a private limited company (GmbH), the imputed rental value in its traditional form no longer applies. Instead, you pay rent to your own company.

• The advantage: The company taxes these rental incomes as profit. However, the positive differences in property acquisition now come into play : The company can depreciate the building (usually 1–2% per year of the book value). These depreciations significantly reduce the company's taxable profit. Furthermore, almost all costs (administration, renovations) are considered business expenses.

Financing: Banks calculate differently

Another area where there are massive differences in property acquisition is the conversation with the bank.

• Private: The bank will check your salary and affordability (max. 33% of gross income for imputed costs). You can use pension funds (pension fund/pillar 3a) as equity.
• Company: Here, the balance sheet and the earning power of the property (investment property) or the operating business are what count.
• The hurdle: One of the critical differences in real estate acquisition is that you cannot use pension funds to purchase commercial real estate. The equity (usually at least 25–30%, often more than in private purchases) must come from the company's or shareholder's "hard" funds. Loan-to-value ratios are often stricter, as this is commercial financing.

The trap when selling: capital gains tax on real estate vs. corporate tax

Many buyers ignore the sale. But this is precisely where the most painful differences in real estate acquisition become apparent .

Private sale: The time factor helps

If you sell privately, you will be liable for capital gains tax.

• The mechanism: The longer you own the house, the lower the tax rate (holding period discount). After 20 years, the profit is taxed very moderately in many cantons. Furthermore, the capital gain (the increase in value) is exempt from direct federal tax and social security contributions.

Company sale: Double taxation

If the corporation sells the property, it is considered a completely normal "product".

• Stage 1: The profit (selling price minus book value) is subject to the company's corporate income tax. Since you depreciated the asset for years beforehand (see above), the book value is low and the profit appears enormous on paper. The "recaptured depreciation" is fully taxed.
• Stage 2: The money is now in the company. If you want to use it privately, you have to distribute it as dividends. You then pay personal income tax on these dividends.

These differences in real estate acquisition mean that often only 40–50% of the sales profit from a company reaches you, while it can be 70–80% for private individuals.

Liability and discretion

Not all differences in real estate acquisition are financial in nature.

• Private: You are liable with your entire personal assets. Your name is publicly registered in the land register.
• Company: The property belongs to the legal entity. The land register lists "Muster AG" (Sample AG). This provides a degree of anonymity. For liability purposes, the property is separate from your personal assets. If you personally go bankrupt, the company property isn't immediately lost (but your shares in the company are subject to seizure). If the company goes bankrupt, the property becomes part of the bankruptcy estate.

Special differences regarding property acquisition for foreigners (Lex Koller)

The Lex Koller is relevant for immigrants without a Swiss passport (and without a residence permit C).

• The misconception: Many believe that by establishing a Swiss corporation, they can circumvent the restrictions on acquiring residential property.
• The reality: The law looks right through the company structure. If the beneficial owner is a foreigner subject to acquisition restrictions, even a Swiss corporation cannot purchase a residential property (except as a purely business-related property). The differences regarding real estate acquisition are therefore marginal – the "company trick" doesn't work.

Conclusion

The question "What's different about buying a company?" can be answered as follows: You're trading short-term tax advantages (depreciation) for long-term tax burdens (sale) and increased complexity. The differences in real estate acquisition favor private wealth when it comes to owner-occupied housing. Early withdrawal of pension fund assets and tax-privileged capital appreciation are strong arguments for private purchase.

Purchasing property through a company is usually only worthwhile if it's purely an investment property, you're a real estate dealer, or the property is used operationally for your business. Those who only want to "save on taxes" often fall into the trap of reclaiming depreciation. Analyze your exit strategy before you go to the notary. The differences in real estate acquisition are irreversible once the ink is dry.

If you need a simulation to determine whether buying through a holding company or privately is more advantageous for your situation, or if you want to calculate the specific differences in property acquisition , Loft offers neutral analysis tools and expert access for your strategy.

Glossary

• Differences in real estate acquisition: The totality of legal, tax and financial differences between purchasing as a natural person (private individual) and as a legal person (company).
• Depreciation: An accounting reduction in the value of a property, which lowers a company's taxable profit. Not possible for private individuals.
• Recaptured depreciation: When a company property is sold, the difference between the (low) book value and the original acquisition costs is taxed as profit.
• Double taxation: The effect that profits in a corporation are first taxed as corporate profit and then again as private income (dividend) when distributed.
• Imputed rental value: A notional income that private individuals must declare for their own use of the property. This does not apply to companies, as they receive actual rental payments.