Inherited a property: keep, buy out or sell?

An inherited house is wealth, memory and conflict potential in one. The financial rules are clearer than the family discussion often suggests: three routes, a few deadlines and a tax that is merely waiting.

The three routes

• →Keep it and live in it: you take over the house at market value, pay out the co-heirs and finance it like a purchase, including the bank's affordability check.
• →Keep it and let it: the rental income has to carry interest, maintenance and reserves; you become a landlord with everything that entails.
• →Sell: the cleanest cut for communities of heirs, with the deferred property gains tax as an item in the settlement.

Taking over means financing

The most common misconception: “The house will be mine, I don't need a bank.” As soon as co-heirs are paid out or a mortgage sits on the house, the bank checks you like a buyer: imputed affordability at 5 %, loan-to-value, income. An example: a house with a market value of CHF 1'200'000, a remaining mortgage of CHF 200'000 and two siblings to pay out at a third each makes CHF 800'000 in payouts. Together with the remaining mortgage that takes CHF 1'000'000 of financing, and an income that carries this load. Not every family home is affordable on your own salary, and knowing that early saves the family months.

The taxes at a glance

• →Inheritance tax: zero for spouses everywhere and for direct descendants almost everywhere; more distant heirs pay rates that are hefty in some cantons.
• →Property gains tax: deferred at inheritance. If the community of heirs sells, the gain is calculated from the parents' original acquisition; the long holding period lowers the rate considerably in most cantons.
• →Ongoing: keep the house and you pay tax on the imputed rental value or the rental income and on the asset value, but may deduct maintenance and mortgage interest.
• →Transfer tax: at inheritance and division of the estate usually none, or heavily reduced, depending on the canton.

Advance on inheritance: the house during their lifetime

If your parents transfer the house during their lifetime, it counts as an advance on inheritance and must be equalised at the later division of the estate, at its value at the time of the inheritance, not of the transfer. If the house gains value until then, your equalisation debt to your siblings grows with it. Parents also frequently retain a right of residence or a usufruct; both reduce the attributable value and belong in the contract with clean numbers. For arrangements like these, an hour at the notary is worth more than any template off the internet.

The roadmap for the family

First: a neutral market valuation instead of numbers poker. Second: whoever wants to take over clarifies the financing before the negotiating starts. Third: set a deadline for dissolving the community of heirs; it is built as a transition, not a permanent state. And fourth: the condition of the house belongs on the table, because an inherited house with a renovation backlog is worth less than the memory of it, see energy renovation.

As of 3 September 2026. Reference values based on Swiss banking practice and cantonal tariffs, no financial or legal advice.