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  #21  
Old 12.06.2011, 11:11
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Re: Tax, house renovation and Dumont praxis

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Thanks for that. A bit of a dumb question... But.... In terms of deductions on capital gains, do you mean you save up all your expenses over the years until you sell or only the expenses in the year you sell.
Only any expenses that you were refused deductions against income tax at the time the expense was incured.
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Old 12.06.2011, 13:25
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Re: Tax, house renovation and Dumont praxis

Try and claim it all and hope they accept it, they often do. However, if you can face it, check whether it is worth claiming it all in one year, my savvy neighbours got their contractors to bill them over two years, thereby having two years of claims which worked out saving them more tax. It depends what your income is, I imagine.
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  #23  
Old 08.12.2015, 14:56
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Re: Tax, house renovation and Dumont praxis

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When you complete your tax return you maintain all the receipts you have. You then put this forward as renovation costs ie all of it assuming it does not then make your combined annual income negative .


Reviving this thread as I wonder what to do when the renovation cost is higher than your income. Lets say renovation costs 150K and income is 100K. Would one be able to deduct until zero/nil?


I can imagine that the tax officer would ask how we managed to pay for food etc. I guess I would have to show an increase in mortgage loan to counter that question (so 50K to live from plus (150 minus 100) would mean increase of the loan of 100K).


Would you say that is correct?


The other question would be if all 150K should be deducted to mitigate the capital gains tax when selling the house.
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  #24  
Old 08.12.2015, 15:03
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Re: Tax, house renovation and Dumont praxis

Concerning your points above -

You are right - can go to 0k
The strict demarcation is between replacement (value preserving) and
and changes (value enhancing). If the latter, then that can be offset against capital gains.

Andy

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  #25  
Old 08.12.2015, 15:22
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Re: Tax, house renovation and Dumont praxis

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Reviving this thread as I wonder what to do when the renovation cost is higher than your income. Lets say renovation costs 150K and income is 100K. Would one be able to deduct until zero/nil?


I can imagine that the tax officer would ask how we managed to pay for food etc. I guess I would have to show an increase in mortgage loan to counter that question (so 50K to live from plus (150 minus 100) would mean increase of the loan of 100K).


Would you say that is correct?


The other question would be if all 150K should be deducted to mitigate the capital gains tax when selling the house.
One option, if it is not too late for you, is to structure large renovations such that you can spread the costs across multiple tax years to maximise the tax benefit.
The rules on what is considered a tax deductible renovation of an existing item and what is considered a new item / addition (non tax deducible from income) are usually quite clear.
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Old 08.12.2015, 15:50
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Re: Tax, house renovation and Dumont praxis

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Concerning your points above -

offset against capital gains.

Does amortization come into play when deducting renovation costs against capital gains?

For instance, a kitchen remodeled 10 years ago might have 0 value today. Were I to sell today, could I deduct the full cost of the kitchen remodel agaist CG, or only a portion?
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  #27  
Old 08.12.2015, 16:12
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Re: Tax, house renovation and Dumont praxis

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Does amortization come into play when deducting renovation costs against capital gains?

For instance, a kitchen remodeled 10 years ago might have 0 value today. Were I to sell today, could I deduct the full cost of the kitchen remodel agaist CG, or only a portion?
The full cost if it was an improvement & not deducted at the time against income
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  #28  
Old 08.12.2015, 16:31
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Re: Tax, house renovation and Dumont praxis

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Does amortization come into play when deducting renovation costs against capital gains?

For instance, a kitchen remodeled 10 years ago might have 0 value today. Were I to sell today, could I deduct the full cost of the kitchen remodel agaist CG, or only a portion?
It all here (Ger) : https://www.google.ch/url?sa=t&rct=j...,d.bGQ&cad=rja
See Page 10 section 3. "Aufwendungen".
You are entitled to offset 100% of recognised capital improvements against the purchase price of the property for the purpose of calculating the sale profit. However, maintenance items don't count.
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  #29  
Old 08.12.2015, 18:57
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Re: Tax, house renovation and Dumont praxis

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Concerning your points above -

You are right - can go to 0k
The strict demarcation is between replacement (value preserving) and
and changes (value enhancing). If the latter, then that can be offset against capital gains.

Andy

Thanks Andy. 0k income sounds right. Thank you also for confirming the value enhancing part. It seemed a bit weird to go down to 0 for income.
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  #30  
Old 08.12.2015, 19:02
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Re: Tax, house renovation and Dumont praxis

a bit off topic but would there be a way to offset tax de fortune other than loans (especially on foreign assets)?

Last edited by Tinkiwinki; 08.12.2015 at 19:17.
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  #31  
Old 09.12.2015, 00:08
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Re: Tax, house renovation and Dumont praxis

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a bit off topic but would there be a way to offset tax de fortune other than loans (especially on foreign assets)?
Give the assets to me .........the amount of tax is tiny,

In ZH you get an allowance for investment management that exceeds tax payable up to about 5 million, they actually pay YOU to declare!
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  #32  
Old 09.12.2015, 11:39
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Re: Tax, house renovation and Dumont praxis

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Give the assets to me .........the amount of tax is tiny,

In ZH you get an allowance for investment management that exceeds tax payable up to about 5 million, they actually pay YOU to declare!


Sounds very interesting (second part of your answer..)


I am in Vaud but happy to do some research. where would I be able to find more info on the ZH rule (german is ok)? What kind of evidence would I need in case it exists in Vaud?
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  #33  
Old 10.12.2015, 10:48
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Re: Tax, house renovation and Dumont praxis

I found in Vaud that 1.5 promille (0.15%) of the fortune can be deducted without justification. Also invoices for advise etc. (page 12 of the pdf below in French)


http://www.vd.ch/fileadmin/user_uplo...Guide_2014.pdf
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  #34  
Old 18.12.2015, 10:17
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Re: Tax, house renovation and Dumont praxis

So, in simple terms, if we buy a place and replace a worn kitchen which was installed in 1999, is there a place to check if that can be treated as maintenance or value adding?
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  #35  
Old 18.12.2015, 10:27
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Re: Tax, house renovation and Dumont praxis

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So, in simple terms, if we buy a place and replace a worn kitchen which was installed in 1999, is there a place to check if that can be treated as maintenance or value adding?
If the kitchen is of a higher quality then it's value adding, if you just replace the electrical items like for like & put new white doors then it's maintenance.
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Old 18.12.2015, 10:33
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Re: Tax, house renovation and Dumont praxis

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So, in simple terms, if we buy a place and replace a worn kitchen which was installed in 1999, is there a place to check if that can be treated as maintenance or value adding?
See 4.3 in the table on p. 14 at https://www.google.ch/url?sa=t&rct=j...,d.bGQ&cad=rja
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Old 18.12.2015, 10:36
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Re: Tax, house renovation and Dumont praxis

We spent a big amount on a bathroom and there was no questions asked. We kept photos of the old one just in case but we had proof that the new one, despite the price, cost less than the one we were replacing.

In Zug, bathrooms can be renewed every 15 years and windows after 20 years. There's a flat deduction for taxes for repairs at 20% of the deemed rental value, so you have to spend a lot to be over that.
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