Real Estate

An Innovative Approach to Negotiating the Sale Price of a Plot of Land

In real estate, some projects are sometimes held back by differing financial expectations or complex tax constraints.

At NewHome Services, we have developed unique expertise to overcome these obstacles and bring ambitious projects to life. The Résidence Bella Vista project is a perfect example.

A Promising Yet Complex Project

Résidence Bella Vista involved a plot of land with an existing villa scheduled for demolition, occupied by an elderly owner who wished to move into a more modern and centrally located home in Lausanne.

The main challenge lay in establishing an optimal sale price before the project was submitted and approved. It was not possible to determine the exact buildable floor area in advance. This uncertainty had a significant impact on the sale price negotiations, balancing the risk associated with such uncertainty against the sellers’ high expectations.

Finding the Right Compromise: The Progressive Pricing Model

To align the interests of all parties involved, we implemented an innovative and tailored pricing model:

A predefined sale price corresponding to a minimum floor area.
An additional amount for each square metre confirmed by the building permit.

This approach made it possible to complete the sale while ensuring optimal land value for the seller and security for the buyer.

The Importance of Structuring the Sale Agreement Correctly

We also structured the sale agreement in a way that optimized the sellers’ tax situation and helped them avoid being reclassified as real estate professionals:

Deferred sale with a fixed base price.
Final adjustment based on the floor area ultimately approved.
Eligibility for the real estate capital gains tax regime, with decreasing taxation according to the holding period, instead of income taxation that could exceed 50%.

A Successful Project and Optimized Value

The project ultimately submitted for approval resulted in a 10% increase in the authorised floor area, further optimizing the transaction for the benefit of both parties.

This success is rooted in NewHome Services’ expertise, our local presence, and our ability to develop tailor-made solutions in both negotiation and tax structuring.

Do you have a complex project? Let’s talk.