Buy-to-let abroad from Switzerland: tax, financing and currency exchange in 2026

You live in Geneva, Lausanne or Zurich, and you are thinking of buying a flat in Lisbon, Valencia, Lyon, Turin or Berlin to let it out. The price per square metre looks modest compared with the Lake Geneva region, and the rent seems to cover most of the cost. But the yield shown in the listing takes no account of the tax authorities in the property's country, which often treat a non-resident more harshly than a resident, nor of the Swiss tax authorities, which do not tax the property but take it into account, nor of the exchange rate between the franc and the euro. This guide follows the money in both countries, cites the texts in force in 2026 and calculates, for the same flat, the tax due in five euro-area countries close to Switzerland.

1. In which country is tax paid on a property let abroad?

In the country where the property is located. The five treaties examined here adopt the same rule, in article 6: income from immovable property is taxable in the contracting state in which that property is situated. This rule expressly covers letting. The same principle applies to the gain made on resale and to the value of the property for wealth tax.

Switzerland, for its part, eliminates double taxation through exemption with progression: it does not tax this income, but it may apply to the rest of your income the rate that would correspond to your total income, foreign rent included. The Direct Federal Tax Act says so in two places. Its article 6 excludes real estate located abroad from tax liability, and its article 7 taxes the rest at the rate applicable to worldwide income. Most cantons, including Geneva, have adopted this rule in their own legislation.

Two consequences follow. First, the tax paid abroad is final: it is not credited against Swiss tax, since Switzerland does not tax this rent. Second, it is the law of the property's country that decides the amount, and that law often distinguishes between residents and non-residents, and between residents of the European Union and residents of a third country. As Switzerland is a member neither of the EU nor of the European Economic Area, several favourable regimes designed for European residents do not apply to you. This is the first point to check before buying.

2. What does Switzerland do with your foreign rent?

It has you declare it, converts it, reduces it to a net income under its own rules, then uses it to set the rate. Not a single franc of Swiss tax is levied on that rent as such, but the tax on your salary goes up.

An example of the mechanism

You are domiciled in the canton of Vaud, your taxable income in Switzerland is CHF 100,000, and your flat abroad brings in EUR 12,000 of rent a year. Converted at the FTA's 2025 average rate, CHF 0.9370 per euro, that makes CHF 11,244. After deducting maintenance costs, for example 20% of the rent if your canton allows the flat-rate deduction for a foreign property, that is CHF 2,249, there remains a net income of around CHF 9,000. You are then taxed on CHF 100,000, but at the rate for an income of CHF 109,000. In a progressive scale, the difference is paid every year.

Net income is calculated under Swiss rules

The amount used for the rate is not the one in your foreign tax return. The rent received is reduced by the maintenance costs allowed in Switzerland. The federal ordinance on property costs provides for a flat rate of 10% of gross rent for a building no more than ten years old and 20% for older buildings, at the taxpayer's choice each year. No official source states expressly whether this flat rate applies to a property located abroad. Fribourg applies the same principles as for a property in Fribourg; Geneva asks for a management account to be attached for a property let abroad. Keep the supporting documents for your actual costs, therefore, and check with your canton.

The two exchange rates that matter

Foreign-currency income is converted at the annual average rate published by the FTA: CHF 0.9370347 per euro for 2025. Wealth items are converted at the rate on 31 December: CHF 0.9305 per euro at the end of 2025. These are the rates that count in the tax return, not the one at which you actually converted your rent.

A loss is not deductible

If interest and costs exceed the rent, the excess of expenses does not reduce your taxable income in Switzerland. Article 6 paragraph 3 of the Direct Federal Tax Act provides that losses incurred abroad are to be taken into account in Switzerland only when determining the tax rate. The Federal Supreme Court confirmed this for the excess expenses of a foreign property in two judgments in 2014, one of which concerned a Geneva couple who owned a house in France (2C_585/2012). Zurich has applied the same rule to cantonal tax since the 2021 tax period. A property that makes a loss at the outset, which is common when it is financed on credit, therefore brings no tax relief in Switzerland.

3. Interest and debts: how they are apportioned between Switzerland and abroad

Switzerland does not link a debt to the property it financed: it apportions all your debts and all your debt interest between Switzerland and abroad in proportion to your assets located in each country. This method comes from intercantonal law, to which article 6 paragraph 3 of the Direct Federal Tax Act refers for international relations. The Fribourg Cantonal Tax Service summarises it as follows: in the international tax allocation, debts and interest are apportioned proportionally according to assets, which may however lead to an increase in taxable income and wealth.

What changes on 1 January 2029

On 28 September 2025, the people accepted, by 57.7%, the federal decree on which the abolition of imputed rental value depended. The Federal Council set the entry into force of the reform for 1 January 2029; current law remains applicable up to the 2028 tax period. From 2029, the new article 33 of the Direct Federal Tax Act allows private debt interest to be deducted only in proportion to the share that all real estate assets located in Switzerland, excluding the owner-occupied home, represent in total wealth. For cantonal taxes, the Tax Harmonisation Act refers to real estate assets located in the canton.

For your foreign flat, the reading of the text is clear: it gives no entitlement to any interest deduction in Switzerland. Today, the share of interest allocated to it is not deductible; after 2029, it does not enter into the calculation of the deductible share. What remains to be clarified is how this new rule combines with the international apportionment of debts: a working group of the FTA and the cantons is responsible for questions of interpretation, and the implementing provisions had not yet been published at the time this guide was written. The flat-rate deduction for maintenance costs, on the other hand, remains for let properties.

4. Wealth tax and resale: what remains in Switzerland

Wealth: declared, not taxed

The foreign property follows the same logic for cantonal wealth tax: it is not taxed in Switzerland, but it counts in setting the rate applied to the rest of your wealth, and it attracts a share of your debts. It is, however, taxable in the country where it is located, where that country levies a tax on real estate wealth. The mechanism, the cantonal scales and a worked example are set out in our guide on wealth tax in Switzerland.

Resale: no Swiss tax

The gain made on resale is taxable in the property's country, under article 13 of the treaties (article 15 for France), and Switzerland exempts it. Under domestic law, the result is the same: the Confederation does not tax private capital gains, and the cantonal property gains tax applies only to properties located in the canton. Everything therefore depends on the property's country, whose rules are summarised in chapter 7: exemption after 10 years in Germany and after 5 years in Italy, 19% in France and Spain, half the gain at the progressive scale in Portugal.

5. How to finance the purchase, and why the 2nd pillar is ruled out

With free funds or a loan, never with tied pension provision. Early withdrawal and pledging of the 2nd pillar are reserved for ownership of a home for one's own needs (art. 30c LPP and art. 331d CO), a notion that the implementing ordinance defines as the insured person's use of a home at their place of domicile or habitual residence (art. 4 OEPL). Pillar 3a follows the same rule (art. 3 and 4 OPP 3). A flat bought to be let does not meet this condition, wherever it is. The case of a home abroad that you live in yourself is covered in our guide on using the 2nd pillar for a property abroad, and how the three tiers work in our guide on the three-pillar system.

Is the interest deductible abroad?

Since Switzerland does not deduct the share of interest allocated to the foreign property, the question shifts to the property's country. The answer is yes in two countries, no in three:

In other words, a purchase on credit in Spain, Portugal or Italy carries interest whose share allocated to the property is taken into account by neither tax authority. In France and Germany, it reduces the local tax. For a purchase on credit, this finding can weigh as much as the headline tax rate.

Loan in euros or in francs?

A property that produces euros, financed by a debt in francs, exposes you to a double currency risk: if the euro falls, the rent is worth less in francs, while the debt does not decrease. A loan in euros aligns the currency of the debt with that of the property and the rent, and limits the currency exposure to the initial capital and to the net rent you bring back into francs. The terms depend on the lender, the country and your situation; compare them taking this risk into account, not just the interest rate.

6. How much tax on EUR 12,000 of rent, country by country?

To compare, let us take the same flat in all five countries. It was bought for EUR 250,000 without a loan. It is let unfurnished, on an annual basis, as the tenant's main residence, for EUR 1,000 a month, or EUR 12,000 a year. Its deductible expenses, excluding interest, are EUR 2,400 a year: local property tax, non-recoverable service charges, maintenance and insurance. The owner lives alone in the canton of Vaud, has no other income in the property's country and is covered by Swiss social security.

A few points to help read this table. In Portugal, the 10% rate applies to residential rents that do not exceed EUR 2,300 a month; the text does not reserve it for residents, but the administration has not yet published guidance on its application to non-residents. At the ordinary rate of 25%, the tax would be EUR 2,400. In Germany, the amount depends on depreciation, which covers only the building and varies with its year of completion. In France, the option for the average rate, calculated on your worldwide income, may reduce the EUR 1,680 of income tax; the EUR 630 solidarity levy remains due. In Italy, the ordinary regime would cost more: 23% on EUR 11,400, or EUR 2,622, plus the regional and municipal surcharges.

This table measures only the tax on the rent. To judge an investment, you also need to add the acquisition costs, the annual property tax, the tax on resale, the cost of currency exchange and the effect on your Swiss rate. Acquisition costs in particular vary threefold: around 6.3% in transfer taxes in France, 6% in Madrid but 9% in the Valencian Community and at least 10% in Catalonia, 7.5% IMT, partly refundable, for a non-resident buyer in Portugal, 9% registration tax in Italy, from 3.5% to 6.5% in Germany depending on the Land.

7. France, Spain, Portugal, Italy, Germany: the 2026 rules

The five summaries below set out what applies in 2026 to a Swiss resident who owns the property directly. They do not replace the advice of a tax adviser in the country concerned, particularly for furnished or holiday lettings, whose regimes change quickly.

France: 20% minimum rate, but only 7.5% in social levies

• Rent: income tax scale, with a minimum rate of 20% up to EUR 29,579 of net taxable income and 30% above (2025 income, art. 197 A CGI). The option for the average rate, calculated on worldwide income, sets it aside if the average rate is more favourable. For unfurnished letting, micro-foncier takes 70% of the rent into account up to EUR 15,000 of receipts; above that, or by option, the actual-expenses regime allows expenses and interest to be deducted.
• Furnished letting: for 2025 income, micro-BIC applies a 50% allowance up to EUR 77,700 for long-term letting and classified furnished holiday lets, and 30% up to EUR 15,000 for unclassified furnished holiday lets. Since 15 February 2025, depreciation deducted under the actual-expenses regime is added back in calculating the capital gain.
• Social levies: only 7.5% (solidarity levy) for a person covered by Swiss social security, who is exempt from CSG and CRDS, instead of 17.2% for unfurnished letting and 18.6% for furnished letting for others. Coverage is reported in boxes 8SH and 8SI of form 2042 C.
• Resale: 19% tax plus the 7.5% solidarity levy; exemption from income tax after 22 years of ownership and from social levies after 30 years; surtax of 2% to 6% above EUR 50,000 of taxable gain. A Swiss resident must appoint a tax representative, the exemption being reserved for residents of the EU and the EEA, unless the price does not exceed EUR 150,000 or the gain is fully exempt.
• Purchase and ownership: transfer taxes of around 6.32% on existing property, in the departments that have raised their rate to 5%, which is the vast majority on 1 June 2026; annual property tax (taxe foncière). The real estate wealth tax applies to non-residents above EUR 1.3 million of net real estate assets in France.
• Obligations: annual tax return with the non-residents' tax office; homes rated G in the energy performance diagnosis banned from letting since 1 January 2025, F from 2028 and E from 2034; registration of furnished holiday lets compulsory.

Spain: 24% of gross rent for a Swiss resident

• Rent: non-residents' income tax at 24% of gross rent, with no deduction of expenses. The 19% rate and the deduction of expenses are reserved for residents of the EU and the EEA. The Central Economic-Administrative Tribunal confirmed this for a Swiss resident on 20 March 2024.
• Vacancy: a home that is neither let nor occupied as a main residence produces imputed income of 2% of its cadastral value, or 1.1% if that value has been revised within the last 10 years, pro rata to the number of days, taxed at 24%.
• Tax return: modelo 210. Since the June 2026 reform, a year's rent is declared from 1 to 20 April of the following year, with a transitional regime for 2026. An NIE, the foreigner identification number, is required.
• Resale: 19% on the capital gain; the buyer withholds 3% of the price and pays it to the tax authorities. The municipal capital gains tax on the land, set by each municipality, can reach 30%. The exemption for reinvestment in a main residence is reserved for residents of the EU and the EEA.
• Purchase and ownership: transfer tax set by each autonomous community: 6% in Madrid, 7% in Andalusia, 9% in the Valencian Community since 1 June 2026, 10% to 13% in Catalonia, 8% to 13% in the Balearic Islands; for new-build property, 10% VAT and stamp duty of 0.75% to 1.5%. IBI property tax of 0.4% to 1.10% of the cadastral value. Wealth tax above EUR 700,000 of assets located in Spain.
• Holiday letting: since 3 April 2025, it requires the express consent of three fifths of the co-owners. The single national register was annulled by the Supreme Court in May and June 2026; regional and municipal registers remain applicable.

Portugal: moderate rents at 10%, but 7.5% transfer tax for a non-resident buyer

• Rent: special flat rate of 25% for residential letting. From 1 January 2026 until the end of 2029, 10% for residential rents that do not exceed EUR 2,300 a month, existing leases included (Decree-Law 97/2026). Reductions exist for leases of 5 years or more. A Swiss resident cannot opt for the progressive scale.
• Expenses: IMI, service charges and maintenance are deductible; loan interest, depreciation, furniture and the additional AIMI tax are not.
• Resale: half of the capital gain is added to income and taxed at the progressive scale, from 12.5% to 48%, with a rate calculated by taking your worldwide income into account. This rule applies to all non-residents.
• Purchase: since Decree-Law 97/2026 of 20 May 2026, a non-resident buyer pays IMT of 7.5% on the entire price, with no scale. The difference from the normal scale is refunded on request if the buyer becomes resident within two years, or lets the home at a rent of no more than EUR 2,300 a month within six months and for at least 36 months over five years. For EUR 250,000, this means EUR 18,750 paid on signing, of which around EUR 10,650 is refundable. Stamp duty of 0.8% is added. A holiday let does not give entitlement to the refund.
• Ownership: IMI of 0.3% to 0.45% of the tax value, set by the municipality; AIMI above EUR 600,000. Switzerland is not on the Portuguese list of preferential tax regimes, inclusion on which triggers higher rates.
• Obligations: an NIF, the tax number, before the purchase; within 15 days of the acquisition, appoint a tax representative or sign up for electronic notifications on the Portal das Finanças. Holiday letting (alojamento local) also requires a representative for VAT.

Italy: cedolare secca at 21% and exemption of the capital gain after 5 years

• Rent: under the ordinary regime, the IRPEF scale, that is 23%, 33% and 43% in 2026, on the rent less a 5% allowance, plus the regional and municipal surcharges. Or, by option, the cedolare secca at 21% on gross rent, 10% for agreed-rent leases, which replaces these taxes and the lease registration tax. The law does not reserve this option for residents.
• Short-term letting: 21% for one designated home, 26% for the second; since 2026, beyond two homes, the activity is presumed to be commercial. A national code, the CIN, is compulsory.
• Resale: the capital gain is taxable only if the property is resold less than 5 years after purchase; the seller may then opt for a 26% tax withheld by the notary.
• Purchase: from a private seller, registration tax of 9%, with a minimum of EUR 1,000, calculated on request on the cadastral value rather than the price, plus EUR 50 of mortgage tax and EUR 50 of cadastral tax; from a developer, 10% VAT.
• Ownership: IMU of 0.86% as a general rule, up to 1.06% depending on the municipality, on a base derived from the cadastral income; reduced by a quarter for an agreed rent. No wealth tax for a non-resident.
• Obligations: a codice fiscale; registration of the lease within 30 days; annual Redditi PF tax return for non-residents.

Germany: tax from the first euro, exemption of the capital gain after 10 years

• Rent: progressive income tax scale, but with no basic allowance: for a non-resident, income is increased by EUR 12,348 before the scale is applied, which amounts to taxing it at 14% from the first euro (§ 50 EStG). For EUR 10,000 of net rent, the tax is around EUR 2,160. The solidarity surcharge applies only if the tax exceeds EUR 20,350.
• Deductions: interest, costs and depreciation of the building: 2% a year as a general rule, 3% for a building completed after 2022, and 5% declining-balance depreciation for a new home whose construction or purchase was begun between 1 October 2023 and 30 September 2029. The text links these benefits to the location of the property, not to the owner's residence.
• Resale: exempt after 10 years of ownership; before that, the capital gain is taxed at the scale, with the depreciation deducted added back.
• Purchase and ownership: real estate transfer tax from 3.5% in Bavaria to 6.5% in Brandenburg, North Rhine-Westphalia, Saarland and Schleswig-Holstein; property tax calculated on a new basis since 2025 and rechargeable to the tenant. No wealth tax, which has not been levied since 1997.
• Obligations: annual tax return with the tax office where the property is located. In designated areas, the initial rent may not exceed the local reference rent by more than 10%, a rule extended until the end of 2029.

8. Currency exchange: three flows, three risks

A buy-to-let investment in the euro area, financed from Switzerland, moves money between two currencies at three points. Each has a cost, and each exposes you to a change in the exchange rate.

• The initial capital, once. For initial capital of EUR 250,000, each percentage point of exchange margin costs EUR 2,500. This is the heaviest flow, and the one where the difference between two providers shows most.
• The rent, every month. On EUR 12,000 a year, one point of margin costs EUR 120 a year, or EUR 1,200 over ten years. A 5% fall in the euro against the franc reduces the value of this rent by around CHF 560 a year, without anything having changed in the property's country.
• The loan and the resale. A loan in francs on a property in euros creates a mismatch that becomes apparent on resale: the price is received in euros, the debt is repaid in francs. A loan in euros removes this mismatch, but leaves the initial capital exposed.

The question is therefore not only the exchange rate of the day, but who converts, at what cost and at what moment. In a buy-to-let investment, it is the transfer of the initial capital that accounts for most of the amount converted, and therefore most of the cost of exchange.

ibani is a Geneva-based financial intermediary, not a bank, specialising in transfers between Switzerland and the euro area. For the initial capital, the transfer to the notary is sent from a Swiss IBAN in your name, with a margin from 0.40%, decreasing with the amount, and supporting documents on the origin of funds are provided on request: our page on currency exchange for a property purchase details the process. For the rent, the euros transferred from your account in the property's country can then be converted into francs. The daily rate can be followed on our CHF-EUR converter, and our personal service page sets out how it works in general.

9. The checklist before you sign

• Calculate the local tax as a non-EU non-resident, not with a resident's regime: rate, deductible expenses, interest, social levies.
• Add up the acquisition costs in the country, including any rate specific to non-resident buyers, and spread them over the planned holding period.
• Check the holding period that exempts the capital gain: 5 years in Italy, 10 years in Germany, 22 and 30 years in France, never in Spain or Portugal.
• Estimate the effect on your Swiss rate: the net income from the property is added to your income to set the rate of cantonal, communal and federal tax.
• Plan for the fact that the share of interest allocated to the foreign property and any loss will not be deductible in Switzerland, and that from 2029 only let properties located in Switzerland will give entitlement to an interest deduction.
• Finance without tied pension provision: neither the 2nd pillar nor the 3rd pillar for a rental property.
• Choose the currency of the loan according to the currency of the rent and of the resale price.
• Check the letting rules: energy performance diagnosis in France, co-owners' consent for holiday letting in Spain, CIN code in Italy, rent controls in Germany.
• Obtain the country's tax number (NIE, NIF, codice fiscale) and find out whether a tax representative will be required.
• Prepare the Swiss tax return: value of the property, debt, rent, costs, at the FTA rate, with a management account if your canton requires one.

10. Frequently asked questions