Federal Supreme Court, 23.02.2026, 9C_298/2025
Facts
A farmer and his brother, co-owners of an agricultural plot (no. xxx) in the Canton of Geneva, entered into a promise of sale and purchase with the Canton of Geneva in March 2014 for a price of CHF 1,399,544. The sale was intended to allow for the expansion of a public facility.
This promise was subject to three conditions precedent:
- Obtaining a decision from the Agricultural Land Commission (CFA) authorizing the division of the plot and the release of the new plot (no. zzz) from the Federal Act on Rural Land Rights (LDFR).
- The agreement of the Municipal Council of a neighboring municipality to sell a replacement plot (no. aaa) to the farmers.
- Authorization from the CFA for the farmers to acquire this replacement plot.
Starting in May 2014, after the promise was signed, the Canton of Geneva took possession of plot no. zzz, planted a forest on it, and built parking spaces. On September 22, 2015, based on these developments, the CFA formally pronounced the release of the plot, noting that it was no longer suitable for agriculture.
Once all conditions precedent were met, the final sale was concluded by notarized deed on December 22, 2015, and February 1, 2016.
The Geneva cantonal tax administration refused to apply the preferential tax regime for gains on agricultural real estate. It added the appellant's share of the gain (CHF 612,769) to his taxable income for the 2016 tax period, for both direct federal tax (IFD) and cantonal and communal tax (ICC). The taxpayer's successive appeals to the cantonal authorities were rejected. He then appealed to the Federal Supreme Court.
Legal Analysis
The dispute concerns the application of the tax privilege provided for inArt. 18 para. 4 of the Federal Act on Direct Federal Tax (LIFD) andArt. 8 para. 1, 2nd sentence of the Federal Act on Tax Harmonization (LHID). These provisions provide for favorable tax treatment for profits derived from the sale of agricultural or silvicultural real estate.
According to the established case law of the Federal Supreme Court, the term "agricultural real estate" must be interpreted in accordance with the Federal Act on Rural Land Rights (LDFR). To benefit from the privilege, a property must be suitable for agricultural use (Art. 6 para. 1 LDFR) and maintain this status until the moment of its legal alienation, i.e., until the transfer of ownership. The future use of the property is irrelevant.
Regarding real estate sales contracts subject to conditions precedent (Art. 151 CO), tax case law holds that the economic and legal transfer only occurs at the moment the condition is fulfilled, provided that the fulfillment of said condition is uncertain.
Application to the specific case
The Federal Supreme Court must determine at what point plot no. zzz lost its status as agricultural property and whether this loss occurred before or after the transfer of ownership.
The appellant argues that the determining moment is the signing of the sales agreement in March 2014, at which time the plot was still agricultural. He believes that the conditions precedent were mere formalities whose fulfillment was foreseeable, particularly because the canton had already taken possession of the property.
The Federal Supreme Court rejects this argument. It rules that the transfer of ownership only took place with the signing of the final deed of sale in December 2015 and February 2016. The conditions precedent were not mere formalities. Obtaining a decision from the CFA, much like obtaining a building permit in other contexts, involves a degree of uncertainty. The fulfillment of these conditions was therefore not certain at the time of the sales agreement. Consequently, the relevant moment for assessing the nature of the property is indeed that of the final sale.
The Federal Supreme Court then notes that by the date of the final sale, the plot had already lost its agricultural status. This loss was formally and objectively recorded by the CFA's decision to declassify the land on September 22, 2015, which became final before the transfer of ownership. This administrative decision is binding on the tax authority.
The fact that the loss of agricultural use is attributable to the buyer (the canton) or that the developments (forest, parking lots) are potentially reversible is deemed irrelevant. What matters is that the declassification decision was in force at the time of the transfer of ownership, thereby depriving the property of its agricultural classification under the Federal Act on Rural Landed Property (LDFR). The question of the legality of the CFA's decision cannot be examined within the framework of the tax assessment procedure.
Outcome
The Federal Supreme Court concludes that, at the time of the transfer of ownership, the plot was no longer an agricultural property within the meaning of the LDFR and tax legislation. The gain realized on its sale therefore cannot benefit from the tax privilege.
The appeal is dismissed, both regarding direct federal tax and cantonal and communal taxes. The decision of the Geneva Court of Justice is upheld. The court costs, set at CHF 7,000, are to be borne by the appellant.
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