Selling building land: how to get it right

Selling land without an agent – or with one? The pros and cons

As soon as you decide to sell a plot of land, the question arises whether you want to do so with or without an estate agent. Both options have their advantages and disadvantages.

Selling land with an agent

Do you want to avoid the organisational effort and prefer to have professionals sell your building land? In that case, it may be worthwhile to use the services of a real estate agency. When selling a plot of land, estate agents help make the sales process significantly easier. Thanks to their experience in property sales, they can determine the market value of building land and real estate with ease. They prepare the necessary documents for the sale and ensure that the transaction runs smoothly.

However, this comes at a price: estate agent fees range between 3% and 6% of the sale price. Given that agencies aim to achieve the best possible sale price, this can certainly be considered a worthwhile investment.

Selling land without an agent

Would you prefer to sell your land without an agent? This is also possible, as using an agent is not mandatory when selling a plot. If you sell building land yourself, you save on agent fees. However, this approach is only advisable if you are familiar with the process of selling building land. In any case, make sure that the sale complies with all legal requirements and that you have all the necessary information for the transaction.

Selling building land – how to determine the price of your land or building plot

The price of a plot of land or building land depends on the local price per square metre. This price can vary significantly from region to region: in more affordable areas, you can expect around CHF 200 to 400 per square metre, whereas in urban and well-connected locations such as Zurich, CHF 2,000 or more per square metre is not uncommon.

In addition to the region, the type of building plot and whether it is developed or not also play a significant role in determining the value of building land. A lack of development reduces its value. Depreciation may also result from building regulations (such as specific roof pitch requirements or noise protection measures), unsuitable ground conditions or a high groundwater level.

Conversely, proximity to schools, shopping facilities and public transport can increase the value. Furthermore, plots in tax-efficient cantons are often more expensive.

The utilisation ratio describes the relationship between the size of the plot and the permitted residential floor area. In some cantons, the floor area ratio is used instead, indicating how many storeys are permitted for a construction project. The higher this value, the more attractive the plot and the higher its price.

Tip: You can obtain information about the utilisation ratio from the municipal building authority. By taking all these factors into account, you can determine an appropriate sale price for your building land.

When is the right time to sell building land?

The optimal time to sell building land depends on several factors. Market trends show continued strong demand in popular regions such as Zurich, Geneva and Central Switzerland, offering favourable opportunities for sale. The interest rate environment also plays an important role: low interest rates increase demand, while rising rates tend to dampen it.

In addition, the Spatial Planning Act (SPA) can influence the value of building land through potential zoning changes. You should therefore stay informed about any such changes. If there are indications that development may be restricted, selling could be a sensible option.

Your personal plans for the future also play a role in the decision. If you expect prices to continue rising in the long term, holding on to the land may be worthwhile. You might also consider using it for your own purposes, developing it yourself or passing it on to family members. In general, selling makes sense if you have no intention of developing the land yourself or if you would prefer to invest the capital elsewhere.

What should be included in a sales dossier?

Once you decide to sell land, you will need an exposé that provides prospective buyers with information, is logically structured and visually appealing. Ideally, your sales dossier should leave no questions unanswered. Use our checklist to ensure that your sales dossier is complete:

• Describe the location: Be precise when describing the location. Is the plot situated in a rural or urban area? What is the access to public transport like? Are there schools, shopping facilities or other nearby amenities? Provide prospective buyers with as much relevant information as possible.
   
• Define the permitted use: Describe the current use as well as future usage options for the plot. Mention whether it is located in a purely residential zone or whether commercial use may also be possible. Outlining different usage possibilities can strengthen buyers’ purchase intentions.
   
• State the size and shape: Describe the shape of the plot and specify the area in square metres.
   
• Describe light exposure and views: Provide details about sunlight exposure. Is the plot sunny, or does it offer attractive views? Address these aspects, as they can help you achieve a higher sale price.
   
• Include the zoning plan: The current zoning plan shows what type of development is permitted and informs buyers about the zoning category in which the plot is located.
   
• Refer to building regulations: If you are selling building land, you must specify what may be built on it. Applicable building regulations provide information, for example, on the maximum building height.
   
• Address the utilisation ratio: The utilisation ratio or floor area ratio is a key factor in determining the value of the plot. It indicates the maximum buildable floor area.
   
• Include the cadastral plan: The cadastral plan provides an overview of the location and boundaries of the plot.
   
• Describe the development status: Address the level of development of the plot. Is it connected to roads, electricity and water supply? In general, a developed plot is more attractive. However, you can of course also sell undeveloped land.
   
• Add a hazard map: A hazard map provides information about natural hazards such as flooding or rockfalls that may affect the plot. This makes an important contribution to safety and planning.
   
• Use high-quality photos: Add the finishing touch to your exposé with high-quality photos. Make sure to take sharp photos from different angles, capture key features and show the surrounding area. Appealing images can significantly increase buyer interest.

What costs are incurred when selling building land?

Although selling building land can be a lucrative transaction, certain costs arise when selling a plot of land. In Switzerland, these typically include the following:

• Land register fees: Land register fees are part of the costs associated with selling a plot. The change of ownership only becomes legally effective once it has been entered in the land register. These costs can be shared between both parties and usually amount to between 0.1% and 0.5% of the sale price.
   
• Notary fees: The purchase agreement must be notarised. Notary fees for selling a plot can amount to up to 0.5% of the sale price. These costs are often shared between the seller and the buyer.
   
• Property transfer tax: Taxes are also incurred when selling a plot of land. In most cantons, a property transfer tax is due upon the sale of land and real estate. It generally ranges between 1% and 3.3% of the purchase price and is typically paid by the buyer. In the cantons of Basel-Landschaft and Obwalden, however, this tax is shared between both parties.
   
• Capital gains tax on property: When a plot of land is sold, a property gains tax must also be paid. The amount of tax depends on how long you have owned the land: the longer the ownership period, the lower the tax.