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Old 15.02.2015, 12:46
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Re: Swiss buy to let questions

The property you referred to earlier is a leasehold property which means that you will need to pay annual ground rent also the property will refer to the freeholder at some point in time.

It will be difficult to sell now and maybe impossible when the property market is not so hot.
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  #22  
Old 15.02.2015, 13:57
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Re: Swiss buy to let questions

Thanks again. Any feedback on the following would be appreciated:

1) What is the tax rate is on rental income (35%?). I live in Feldmeilen but intend to buy in central Zurich
2) Do you get the same tax deductions for a BTL mortgage
(as for primary residence mortgage e.g. interest payable, maintenance expenses)?
3) Do you get tax deductions on principal repayments?
4) Ball park capital gains rate in Zurich canton after say 3yrs (55%?), 5 yrs (still 55%?), 7 yrs, 10 yrs?
5) I understand that you dont pay capital gains tax if you buy another property. Is this true even if you the "subsequent" property outside Switzerland (i) say in an EU country / UK (ii) say in a non EU country / Singapore.
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Old 18.02.2015, 14:13
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Re: Swiss buy to let questions

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There are no openly advertised properties in Zurich that will be profitable. Anyone buying now is either paying a premium for their own place or gambling on low rates forever.
That's all subjective.......I saw just up in the thread, a cpl of years ago you also told people to bet on long-term chf devaluation?

I think many people now are buying something affordable that will remain so.
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Old 18.02.2015, 14:20
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Re: Swiss buy to let questions

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C permit, but I wouldnt be looking in restricted mountain resorts etc anyway. A good relationship with the bank with a principal residence and decent pension pot as further collateral.
I understand they only let you dip into that or offer it as a colletaral if the property is your primary residence. If its a buy to let investment you can't take your pension pot into the equation.
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Old 18.02.2015, 20:59
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Re: Swiss buy to let questions

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Instead of starting a new thread, I thought I'd latch on to this existing thread (...given the high quality of questions / responses).

We live in Zurich (British citizens, Swiss work permit currently B but moving to C soon). I have the option to take out a buy-to-let mortgage through my employer at what I think are relatively attractive terms (20% cash, 80% loan split into 66% (1st mortgage) and 14% (second mortgage), 10-year fixed at c. 1.5%).

Ideally I'd like to take out a mortgage to finance a flat that we live in but we dont have the 20% equity required for such a flat. Hence we're considering buying a small studio / one bed in a good rentable location as a long term (buy to let) investment. Given that we live in Zurich, the idea to be able to save a little on maintenance expenses, real estate management fees etc (and hopefully see some capital appreciation in the mid term)

Was hoping that someone could help with a few specific questions (buy to let)
1) I understand rental income earned is taxable. Any idea what the tax rate is on rental income? Is it 35%. I live in Meilen (feldmeilen to be specific) but intend to buy somewhere in central Zurich
2) I know that with a own your home mortgage (i.e. a primary residence mortgage), you get certain tax deductions (interest payable, maintenance expenses, etc). Do you get the same tax deductions for a buy to let mortgage?
3) Also, do you get tax deductions on principal repayments?
4) Capital tax rates are very steep. Any idea (even ball park figures would help) what the cap tax rate is in Zurich canton after say 3yrs (55%?), 5 yrs (still 55%), 7 yrs, 10 yrs?
5) With regards to capital gains tax, say I sell the property after 3-4 years. I understand that I may not have to pay capital gains tax if I use the gains to buy another property. Do you know if this is true even if I buy another property outside Switzerland (i) say in an EU country / UK (ii) say in a non EU country / Singapore.
6) In a situation where we cant manage the property ourselves, and end up hiring the services of a real estate agent to manage the property, any idea what the charge is? This is typically between 8-14% of annual rent in the UK that I as the landlord would have to pay to the real estate agent / manager.
5) On a side note, would be good to hear peoples thoughts around where CHF 300-400k could buy you a small studio / one bed (...key criteria being easily rentable location, targeting gross yield of 3% - hopefully more but want to be conservative as i do the math to see if this makes sense as an investment)

Cheers,
I don't know how it is for noncitizens but let me say that as a non-domiciled (I live part year in Switzerland and part year in the UK) Swiss citizen the Swiss banks (national ones and cantonal ones) have thrown money at me, allowed me to buy property on 10% or 20% cash. In some cases it has turned out well, in other cases not. Location, location, location. And developer's premium.

I have a property I've owned for 10 years that is unsaleable but yields a bit over my costs, including mortgage interest (no amortisation required) on a rolling 2-year fix. Another I've had for 5 years that is worth 2x or 3x what I paid. I rent it to tourists through an agency and get most, maybe all, of my costs but not my amortisation (on that one I amortise 1% a year).

You never know.
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