Rent it out, sell it or develop it further?

Anyone who inherits a property has to make a fundamental decision: keep or sell? Emotional aspects often come into play, especially when it comes to the family home. The idea of moving in there themselves is appealing to many - and challenging at the same time. In addition to the personal connection, practical questions need to be clarified: Does the property meet your own living requirements? Is it up to date in terms of energy and construction? Do other co-heirs have to be paid out? And how does the imputed rental value affect the tax burden - i.e. the notional income that has to be taxed for owner-occupied residential property?

Renting out - ongoing income, but often limited yield

Renting out an inherited house or apartment appears to be a pragmatic solution: the property remains in your possession and regular income is generated. But the reality is often sobering. Many old properties are in need of renovation, which limits their rentability or requires high investments. In addition, the taxable income (rental income minus maintenance and mortgage interest) must be declared as income - which in many cases leads to a higher tax burden. Depending on the canton, the imputed rental value may not apply, but the bottom line is that the return often remains modest.

Selling - create liquid funds and avoid conflicts

Selling is often the least complicated option, especially for communities of heirs. It creates clear conditions, prevents potential disputes and provides financial flexibility. In times of high property prices, considerable sales profits can be made. However, these are subject to property gains tax, the amount of which varies depending on the canton and the length of time the property has been held - in the case of long-term ownership, five-figure or even six-figure sums can still be due. Notary and conveyancing costs should also be factored in. Anyone who can provide evidence of investments or incidental sales costs should claim these in their tax assessment.

Developing - recognizing potential and making targeted use of it

Many inherited houses are located on large plots of land with development potential. One future-oriented option is therefore to develop them further: whether by building a new replacement, creating an apartment building or dividing the property into condominiums. Such projects require capital, time and sound planning - but can create considerable added value in the long term. A professional location and market analysis is essential here, as is an examination of the building law framework. If you plan the project carefully, you can benefit both fiscally and economically.

Self-use - dream home or cost trap?

If you want to move into an inherited family home yourself, you should soberly check whether the property is suitable for your own living situation. Many older homes no longer meet today's requirements in terms of comfort, energy efficiency or floor plan. Renovations - for example to the heating, roof, insulation or electrical installations - can cost a lot of money. At the same time, the imputed rental value has to be taxed, which means a significant additional burden depending on your income. In this scenario too, an objective assessment and sound financial planning are crucial.

"Whether renting, selling, developing or owner-occupation - each option has its justification, depending on the initial situation. Important decision-making factors include the condition of the property, its location, the market environment, the family situation and the tax implications. An early and objective discussion helps to avoid wrong decisions and find sustainable solutions."
David Feldmann, Leiter Vermarktung Chur