Hi,

I am new to filling in TAX Forms and one of things I need to declare is whether I have any Real Estate abroad. I think having this is beneficial in terms of my TAX but can anyone conform this?

Cheers,

Sgt. Bilko.

Yes you do, although I sense from prev threads on this many dont.

The overseas property assets and income are excluded from your swiss taxable assets/income but do effect the rate. i.e. if you have 100 of which 50 are in CH you are taxed on 50 at the rate you would pay if you had 100.

Your mortgages and interest deductions are spread prorata the property values, and not on a strict basis. If the house is not let out you should impute a notional rent, say 25-30pct of what the market rent would be (there is a savant calculation to comply with tay regulations but for a holiday home this should suffice as the income is not taxed in CH anyway)

Hi Danny,

Thanks for your response. I have had brief conversations with others and they have not declared it, purely out of fear of what the tax man would do over here.

I have read and heard conflicting opinions on my situation, which is that I have a property (under a mortgage), which is on rent. The rent covers the mortgage and I am able to save a little each month. From what I understand, the Swiss will not tax me on the income I make, but as I am making net profit, my tax rate will go up. I persume that if my property was not on rent (I would be at a net loss) then my rate would be drop. Is this correct?

Thanks in advance

In theory even if you do not let it you should declare a notional income of about 25-33% of the market rent. This is quid pro quo for being able to deduct the mortgage interest.

It is easy to work out the approximate impact using the many swiss tax calculators that exist.

Whatever conflicting info you have heard this is the correct treatment and you are taking a certain risk not declaring it. Although I have never heard of anyone being caught out. I supect the main issue would be if you sold it and there was a large unexplained jump in your wealth.

I suspect the OP would not be so dumb as to report the proceeds of sale of a previousely undeclared asset. Any idea why numbered accounts exist?

No referring to the OP but youd be amazed at the dumb things people do. My point is the tax man does do a sanity check on the annual evolution of your net wealth and will clearly question large unexplained changes.

Consider this:
a) you MUST by law declare all worldwide assets. Failure to declare is, well, just look at those US citizens who are under the magifying glass....

b) and if you did not declare, and then sold the house, how would you explain the sudden increase in cash in the bank account to the Swiss tax authorities?

The benefits of declaring (apart from being law abiding) is that you can claim deductions for mortgages and for house maintenance. Which may be substantial.