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Old 23.11.2014, 14:25
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Withdraw money from Pension for Property Investment

According to this site the first point states that I can withdraw money from my pension to invest in property

Obviously it has some points like once in 5 years etc

Is this correct info?

https://www.ch.ch/en/withdraw-pension-early

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I want to invest in a property in UK (Where I'm from) - Can I use my pension money from here in Swiss and if so, what should I do? My company has a bank account where all our pension money goes from our salary
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Old 23.11.2014, 15:19
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Re: Withdraw money from Pension for Property Investment

My understanding was that the limit was to residence in CH. But this may have changed recently. Best to talk to the bank or someone in HR department.

The best ....
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Old 23.11.2014, 15:34
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Re: Withdraw money from Pension for Property Investment

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My understanding was that the limit was to residence in CH. But this may have changed recently. Best to talk to the bank or someone in HR department.

The best ....
The property has to be for your personal use (not a business premises, not for renting out etc.) and must be in your country of residence. Look at Page 3 of this document: https://www.axa-winterthur.ch/SiteCo...rderung_en.pdf
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Old 23.11.2014, 15:46
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Re: Withdraw money from Pension for Property Investment

I saw that document, thanks anon

So in that sense, "IF" I move back to UK, then I can call upon the money from pensions to use as a payment for propery.

"Residential property
must therefore be used at the domicile
or usual place of residence"
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Old 23.11.2014, 17:04
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Re: Withdraw money from Pension for Property Investment

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I saw that document, thanks anon

So in that sense, "IF" I move back to UK, then I can call upon the money from pensions to use as a payment for propery.

"Residential property
must therefore be used at the domicile
or usual place of residence"
The article is about "Tier 2" (2. Säule).

The idea behind this is the following:
- you can withdraw the money, thereby reducing the loan (but you've got to pay taxes on it)
- as a result, you pay less interest
- as a result of that, your tax-bill increases (the money you would pay to rent your property is added to your taxable income as an assumed-income, you can subtract the interest paid on the loan)
- another result is that there is less money in your tier 2 account
- you can now go and make larger payments to your tier 2 account, offsetting any negative tax effects (there's a line on your tier2 summary you get every spring: "Maximale Einkaufssumme" - that's the maximum amount you can pay into it).

All this is to a certain part depending on how much you earn and how your tax-situation actually looks like.
And of course, it is assumed that the property is in CH.
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Old 23.11.2014, 18:03
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Re: Withdraw money from Pension for Property Investment

It must be your primary residence, though not necessarily in Switzerland.
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Old 23.11.2014, 18:20
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Re: Withdraw money from Pension for Property Investment

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I saw that document, thanks anon

So in that sense, "IF" I move back to UK, then I can call upon the money from pensions to use as a payment for propery.

"Residential property
must therefore be used at the domicile
or usual place of residence"
Yes, it can still be used for property abroad as far as I know. From the AXA PDF:

"Property abroad

An advance withdrawal or pledge for purchasing residential property abroad requires the owner to have his domicile there or to use it as the usual place of residence."

However, the document is out of date in that you're only allowed to take out a maximum of 10% now. And anything you take out has to be repaid to the pension fund if you sell the property.

"Once you have worked out your house purchase budget, you will have to raise 20% of the purchase price from your own capital before the bank will grant you a loan. Your capital contribution may consist of:

Pension fund savings: if you need a mortgage to fund the purchase, at least 10% of your own capital contribution must come from sources other than your pension fund"

https://www.ch.ch/en/financing-homeownership

It doesn't necessarily increase your tax. Your mortgage and the interest are offset against the theoretical rental value. This actually gives us a negative figure on the wealth side of things.

Last edited by Medea Fleecestealer; 23.11.2014 at 18:24. Reason: Added info
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Old 23.11.2014, 18:39
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Re: Withdraw money from Pension for Property Investment

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. . . So in that sense, "IF" I move back to UK, then I can call upon the money from pensions to use as a payment for propery. . . .
Probably, you have to ask firstly the company that manages your 2nd Pillar pension fund here. The following questions are relevant:

1. Can you remain a member of the pension scheme after you leave Switzerland ?
2. What is the mandatory component of your current pension savings. (This will be blocked if you leave Switzerland to go to an EU/EFTA country)
3. What is the non-mandatory component of your current pension savings. (This you may keep if you leave Switzerland)

A probable scenario is that the current pension scheme will terminate your membership and your are required to specify a blocked bank account where the mandatory part of your savings is to be transferred. You also tell them what you want done with the non-mandatory part. You would then have to ask the Bank, which you would consider nominating for the blocked account, what their policy is on making the mandatory portion available for a property purchase in England.

Here is something very basic in English from the UBS, however, there is sometimes an advantage in using a bank based, for instance, in Zug and some tax is payable when the money is made available to you . . .
http://www.ubs.com/ch/en/swissbank/p...ml#par_title_0
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Old 27.03.2015, 11:48
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Re: Withdraw money from Pension for Property Investment

Re-hashing and changing tack slightly...

We used our pension as part of the 20% to buy our current appartment back in 2009. We're planning to build a house, but first need to sell our appartment to do so. In order for a bank to agree to a construction loan and bridging loan (we don't have the necessary 10% for the construction loan), we have to have a vente a terme agreed and signed for. The question is, can we use our pension again to get the construction loan, on the condition we pay it back immediately on sale of our appartment?
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Old 27.03.2015, 12:19
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Re: Withdraw money from Pension for Property Investment

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Re-hashing and changing tack slightly...

We used our pension as part of the 20% to buy our current appartment back in 2009. We're planning to build a house, but first need to sell our appartment to do so. In order for a bank to agree to a construction loan and bridging loan (we don't have the necessary 10% for the construction loan), we have to have a vente a terme agreed and signed for. The question is, can we use our pension again to get the construction loan, on the condition we pay it back immediately on sale of our appartment?
You will be limited to 10% of the pension fund, there are also further restrictions around the age of 50.
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Old 27.03.2015, 12:28
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Re: Withdraw money from Pension for Property Investment

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You will be limited to 10% of the pension fund, there are also further restrictions around the age of 50.
I thought it was 10% of the property price? There's no reference to 10% of the pension fund in the AXA document linked above.

The age restriction doesn't count for me just yet.
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Old 27.03.2015, 12:29
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Re: Withdraw money from Pension for Property Investment

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I thought it was 10% of the property price? There's no reference to 10% of the pension fund in the AXA document linked above.

The age restriction doesn't count for me just yet.
Yes your right 10% of the property price.
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Old 27.03.2015, 12:37
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Re: Withdraw money from Pension for Property Investment

10% of a 2p, I don't think that there is any limit for a 3p.

Tom
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Old 27.03.2015, 13:25
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Re: Withdraw money from Pension for Property Investment

Sorry if this is a thread hijack, but related to the property not being in Switzerland...two questions:

Is it possible to withdraw pension funds for a primary residence in the US? As background, both my husband and I are Swiss (I'm merely paper-Swiss, of course) and I am a US citizen. We are planning to leave Switzerland in July but are looking at houses already. Of course, no Swiss bank will finance a mortgage, and the US banks don't like the fact that my husband is Swiss (and so far has no green card).

If the answer to the above is no, how long does it take to get the funds out once we're gone, and are there restrictions since we're Swiss?

I'm really sorry if the answer is here somewhere (or in other threads)-I've done some digging around, but most answers seem to be related to either moving to an EU country or leaving as a non-Swiss.
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Old 27.03.2015, 13:43
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Re: Withdraw money from Pension for Property Investment

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Sorry if this is a thread hijack, but related to the property not being in Switzerland...two questions:

Is it possible to withdraw pension funds for a primary residence in the US? As background, both my husband and I are Swiss (I'm merely paper-Swiss, of course) and I am a US citizen. We are planning to leave Switzerland in July but are looking at houses already. Of course, no Swiss bank will finance a mortgage, and the US banks don't like the fact that my husband is Swiss (and so far has no green card).

If the answer to the above is no, how long does it take to get the funds out once we're gone, and are there restrictions since we're Swiss?

I'm really sorry if the answer is here somewhere (or in other threads)-I've done some digging around, but most answers seem to be related to either moving to an EU country or leaving as a non-Swiss.
No, the house has to be in the EU or CH.

When you leave CH & take up permanent residence in the US you can take the money. You will have to prove you are living in the US & it depends on the pension company how long it will take. As your married it's probably easier.

I have to prove I am single which is more complicated so have not been able to get my hands on my pension so far, hopefully it will be resolved in the next 6 months.
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Old 27.03.2015, 13:57
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Re: Withdraw money from Pension for Property Investment

Thanks fatmanfilms!

So, we can't finance a house from here (which isn't surprising) we can't finance a house from the US, since we won't have the down payment right away.

*sigh*
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Old 27.03.2015, 14:43
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Re: Withdraw money from Pension for Property Investment

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When you leave CH & take up permanent residence in the US you can take the money.
Even if one is Swiss?

Tom
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Old 27.03.2015, 15:02
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Re: Withdraw money from Pension for Property Investment

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Even if one is Swiss?

Tom
Both of us are Swiss...
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Old 27.03.2015, 15:33
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Re: Withdraw money from Pension for Property Investment

If you say that you will "never" come back to CH, you might be able to cash the pension. No matter if its for a house or lollipops..

but check that with pension.

Good luck
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Old 27.03.2015, 15:38
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Re: Withdraw money from Pension for Property Investment

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If you say that you will "never" come back to CH, you might be able to cash the pension. No matter if its for a house or lollipops..

but check that with pension.

Good luck
Oh, we're never coming back. That's certain (or as certain as I can be at this point)!
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