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The performance of a property portfolio is built over several decades through regular decisions that are adapted to market conditions. Several measures can help preserve its value while improving its returns:

  • Energy efficiency requirements are increasingly becoming a major factor in property valuation, both for sales and rentals.
  • Preventive maintenance generally costs less than major repairs resulting from insufficient upkeep.
  • Taxation and inheritance planning should be anticipated well in advance to avoid unnecessary costs and facilitate the preservation of family assets.

Why should you plan the management of your property portfolio in advance?

As a property owner, you need to take into account changing interest rates, regulatory requirements, cantonal taxation and the evolving expectations of occupants. Active management of your property portfolio helps maintain the attractiveness of your properties while limiting unexpected expenses.

Returns change with the market

Rental yields are not fixed. They can be affected by several factors:

  • rising maintenance costs;
  • investments required to comply with new standards;
  • fluctuations in mortgage rates;
  • changes in rental prices depending on the region.

In highly sought-after areas, an increase in property value can sometimes offset a lower rental yield. Conversely, in less dynamic markets, a value-enhancement strategy becomes essential to preserve overall profitability.

Increasingly stringent environmental requirements

The energy transition is now having a direct impact on the Swiss property market. Several cantons have strengthened their energy legislation in recent years.

In Geneva, for example, the Energy Act (Loi sur l’énergie, LEn) imposes stricter renovation requirements and provides for a gradual reduction in buildings’ energy consumption (1).

In the canton of Vaud, new buildings and certain major renovations must comply with high energy-efficiency standards defined by the Energy Act (Loi sur l’énergie, LVLEne).

Moving from preserving value to creating value

Simply holding onto a property for several decades is no longer enough: without upgrades, it can lose value in light of today’s requirements. As an owner, you should therefore:

  • improve energy performance;
  • adapt properties to current needs and lifestyles;
  • maintain a high level of comfort;
  • preserve the architectural quality of the building.

This strategy helps reduce vacancy periods and can contribute to a higher property value in the event of a future sale.

How should you plan the energy renovation of your properties?

Energy renovation is now one of the main ways to increase the long-term value of a property portfolio. It can reduce running costs, improve comfort and help anticipate future regulatory requirements.

Carry out an energy assessment before starting renovation work

Before undertaking any renovation, it is advisable to carry out a comprehensive assessment of the building.

The Cantonal Building Energy Certificate (CECB®) provides an assessment of the building’s energy performance and can be supplemented by a CECB Plus, which proposes a renovation strategy.

The Buildings Programme recommends this approach in particular for planning renovations and identifying priority measures. The assessment covers areas including:

  • insulation of the building envelope;
  • heating requirements;
  • technical installations;
  • potential improvements in energy efficiency.

Prioritise renovation work according to its effectiveness

An effective renovation should be carried out gradually, with priority given to:

  1. insulating the roof, façades and other elements responsible for heat loss;
  2. replacing an old heating system with a more efficient solution;
  3. improving ventilation;
  4. installing photovoltaic panels where appropriate.

Replacing a boiler without first improving the building’s insulation can limit the potential energy savings.

Take advantage of available financial support

Property owners may be eligible for financial support through the Buildings Programme, which is supported by the Swiss Confederation and the cantons.

The programme encourages measures such as thermal insulation, replacing fossil-fuel or electric heating systems with renewable alternatives, and certain comprehensive energy renovations (2).

Good to know: The amounts available and eligibility requirements vary from canton to canton. Applications generally need to be submitted before work begins.

What maintenance work should you consider to preserve the value of your property?

Maintenance should be seen as an investment rather than an expense. A well-maintained building retains its value more effectively and is less likely to require unexpected repairs.

Set up a regular inspection schedule

Regular monitoring helps identify problems before they become serious. We therefore recommend checking:

  • the roof and waterproofing elements;
  • façades;
  • electrical installations;
  • plumbing and sanitary installations;
  • the heating system;
  • ventilation systems;
  • common areas in residential buildings.

Technical equipment should also be maintained in accordance with the manufacturers’ recommendations.

Avoid the costs of delayed maintenance

Be careful: postponing essential maintenance work can prove costly. For example, untreated water infiltration can damage the roof structure, insulation or interior finishes.

Similarly, an ageing heating system often consumes more energy even before it breaks down completely.

Preventive maintenance reduces these risks while extending the lifespan of equipment and technical installations.

Set aside an annual budget

Property owners should consider building up a maintenance reserve. This approach makes it possible to spread expenses over time, avoid systematically relying on borrowing and maintain the quality of your property portfolio.

In a condominium, this approach is also reflected in the creation of a renovation fund to finance future work.

How should you structure the transfer and taxation of your property portfolio?

Tax rules relating to the transfer of property vary considerably between cantons. Careful advance planning is therefore essential to preserve the value of the assets being transferred.

Adapt the ownership structure

Depending on the size of the property portfolio and the family’s long-term objectives, several legal structures can be considered:

  • Ownership in your own name: the most common option and relatively straightforward to manage, but your property assets are directly subject to personal income and wealth taxation.
  • Co-ownership or joint ownership (community of heirs): often resulting from an inheritance, this form of ownership requires close agreement between family members to avoid decision-making deadlocks regarding renovation work or property sales.
  • Corporate structures (e.g. real estate company, SA or Sàrl): suitable for larger property portfolios, these structures can facilitate the transfer of company shares, although taxation may apply both at company and shareholder level.

The choice depends in particular on the applicable cantonal taxation, whether you intend to transfer assets during your lifetime, and the number of direct or indirect heirs.

Anticipate the tax implications

As a property owner, you should take three major tax considerations into account:

  • Real estate capital gains tax: levied by the canton when a property is sold, its rate generally decreases with the length of ownership, significantly favouring long holding periods, often exceeding 15 to 20 years.
  • Wealth tax: calculated on the taxable value of your properties, it varies from canton to canton and can have a significant impact on your available liquidity.
  • Gift and inheritance taxes: while most cantons exempt transfers in the direct line between parents and children, some still apply specific tax rules. An advance on inheritance or a gift with a reserved right of usufruct can, depending on the circumstances, significantly reduce the overall tax impact.

Planning several years in advance can help prevent the transfer of assets from creating liquidity problems or an excessive tax burden for your heirs.

Surround yourself with specialised professionals

To transfer your property assets securely, it is advisable to seek support from several experts:

  • The notary: essential for drafting authentic deeds and inheritance agreements, as well as legally formalising property transfers.
  • The tax adviser: an expert in cantonal tax legislation who can help optimise deductions and anticipate taxation on capital gains.
  • The property specialist or property management company: essential for accurately assessing the market value of properties and evaluating their future return potential.
  • The financial planner: helps align the management of your property assets with your pension planning (2nd and 3rd pillars) and secure your income in retirement.

This multidisciplinary approach helps secure your legal and financial decisions over the long term while protecting the interests of your loved ones.

FAQ

Should you renovate a property before selling it?

Not necessarily. Renovation work should be assessed according to its ability to increase the property’s value or make it easier to sell. Simple cosmetic improvements, such as repainting or replacing flooring, or bringing key installations up to current standards, can often make a property more attractive and help achieve a higher selling price without undertaking major renovations with uncertain returns.

What assessment should you carry out before an energy renovation?

The CECB® (Cantonal Building Energy Certificate) is one of the main tools used in Switzerland to assess a building’s energy performance and identify potential improvements. For a more detailed analysis, a CECB® Plus provides a comprehensive advisory report with up to three renovation options, including cost estimates and an assessment of potential subsidies.

Why should you maintain a property regularly?

Preventive maintenance helps limit major deterioration, reduce unexpected costs and preserve the long-term value of the property. Setting aside an annual maintenance budget of generally 1% to 1.5% of the property’s reconstruction value can help avoid costly emergency repairs that could negatively affect the property’s net return.

Sources

silgeneve.ch - Article 

silgeneve.ch - Article