Sale of real estate -
asset deal or share deal?

The most common forms of property transfer in real estate companies are the asset deal and the share deal. Whereas in the case of an asset deal one or more properties are sold individually from the company (change of ownership under civil law), in the case of a share deal all or a majority of the shares in a real estate company are sold themselves (economic change of ownership).

It is a widespread misconception that, from a tax point of view, the asset deal and the share deal are equivalent to an economic change of ownership due to the tax consequences. Therefore, despite the normally simpler implementation of the asset deal, the advantages and disadvantages of the two types of transfer should be carefully weighed up against each other and comparative tax calculations made before the sale.

Asset Deal: At the cantonal level, the reinvested depreciation is subject to profit tax. The apprecia-tion realized by the sale of the property is subject to real estate gains tax (monistic system) or capital gains tax (dualistic system), depending on the cantonal taxation system. Furthermore, direct federal tax is due on the entire book profit.

Share Deal: The increase in value realized on the property through the sale of the shares - and only this - is in principle subject to real property gains tax due to the economic change of ownership. There is no taxation of the appreciation ratio at the federal level. The reinvested depreciation is taxed neither at the cantonal nor at the federal level.

Conclusion: Often, a share deal is more advantageous from a tax point of view, as the effective tax burden is lower and a significant deferred tax burden remains. This deferred tax burden can be shared be-tween the contracting parties during the sales negotiations - without the involvement of the tax office. A "win-win situation" is possible between the seller and the buyer.