Go Back   English Forum Switzerland > Help & tips > Finance/banking/taxation
Reply
 
Thread Tools Display Modes
  #1  
Old 09.11.2015, 15:16
Newbie
 
Join Date: Jun 2012
Location: Basel
Posts: 8
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
dearhana has no particular reputation at present
Property purchase eligible for tax deduction?

Hi all,
I could not find any relevant information, so I wonder if property purchase eligible for tax deduction. I mean, the down payment.
In addition, if you buy a new house, and upgraded the facilities such as oven, hob, bath tub etc., will these costs be deductible?
Thank you for your help! - DH
Reply With Quote
  #2  
Old 09.11.2015, 15:29
Senior Member
 
Join Date: May 2007
Location: Basel
Posts: 439
Groaned at 11 Times in 7 Posts
Thanked 147 Times in 99 Posts
SwissMorgs has earned some respectSwissMorgs has earned some respect
Re: Property purchase eligible for tax deduction?

Down payment : no

Replacement/repair of the items you listed: Yes

Also washing machine.

There is a detailed list available from the tax office, showing how much can be deducted.
Reply With Quote
This user would like to thank SwissMorgs for this useful post:
  #3  
Old 09.11.2015, 15:29
dodgyken's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Democratic Republic Kenistan
Posts: 9,840
Groaned at 340 Times in 276 Posts
Thanked 17,510 Times in 6,686 Posts
dodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond reputedodgyken has a reputation beyond repute
Re: Property purchase eligible for tax deduction?

Quote:
View Post
Hi all,
I could not find any relevant information, so I wonder if property purchase eligible for tax deduction. I mean, the down payment. NO

In addition, if you buy a new house, and upgraded the facilities such as oven, hob, bath tub etc., will these costs be deductible? NO**
Thank you for your help! - DH
** If the house is new then you won't be able to make any income tax deductions for a new oven, bath, etc. If the house is old and hasn't been renovated for a while then you can - assuming you replace (more or less) like for like. For example new taps are tax deductible - new gold taps aren't.***

*** When talking about something being "tax deductible" this means "income tax deductible". Any changes you have made that aren't tax deductible can be deducted when the property is sold as they are classified as "capital improvements"

Finally, back to your original question, and a worked example (all numbers are fictious):

Year 1
You have 200k of cash - which you will pay wealth tax on, which is normally quite low.

Year 2
You buy a 1m house using the 200k cash. The house has a tax value (700k) and an eigenmietwert (30k).
On your tax return you'll have -100k of assets and 30k of extra income. From that income you can deduct the maximum of either 20% OR individual improvement. You can also deduct loan payments (interest only) - say 12k.
Worse case you are adding 30-12-6=12k to your income.
__________________
"Don't believe everything you read on the internet" Abraham Lincoln
Reply With Quote
  #4  
Old 09.11.2015, 16:14
Newbie
 
Join Date: Jun 2012
Location: Basel
Posts: 8
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
dearhana has no particular reputation at present
Re: Property purchase eligible for tax deduction?

Quote:
View Post
Down payment : no

Replacement/repair of the items you listed: Yes

Also washing machine.

There is a detailed list available from the tax office, showing how much can be deducted.
Thanks!
Reply With Quote
  #5  
Old 09.11.2015, 16:19
Forum Legend
 
Join Date: Sep 2010
Location: Neuchatel
Posts: 19,400
Groaned at 369 Times in 276 Posts
Thanked 22,400 Times in 10,081 Posts
Odile has a reputation beyond reputeOdile has a reputation beyond reputeOdile has a reputation beyond reputeOdile has a reputation beyond reputeOdile has a reputation beyond reputeOdile has a reputation beyond repute
Re: Property purchase eligible for tax deduction?

Be careful though- repairs are tax deductible, but not extra improvement (eg add an extension, or put in a new bathroom, etc. If you repair or replace something which already exists, then is it deductible.
Reply With Quote
This user would like to thank Odile for this useful post:
  #6  
Old 09.11.2015, 16:19
Newbie
 
Join Date: Jun 2012
Location: Basel
Posts: 8
Groaned at 0 Times in 0 Posts
Thanked 0 Times in 0 Posts
dearhana has no particular reputation at present
Re: Property purchase eligible for tax deduction?

Quote:
View Post
** If the house is new then you won't be able to make any income tax deductions for a new oven, bath, etc. If the house is old and hasn't been renovated for a while then you can - assuming you replace (more or less) like for like. For example new taps are tax deductible - new gold taps aren't.***

*** When talking about something being "tax deductible" this means "income tax deductible". Any changes you have made that aren't tax deductible can be deducted when the property is sold as they are classified as "capital improvements"

Finally, back to your original question, and a worked example (all numbers are fictious):

Year 1
You have 200k of cash - which you will pay wealth tax on, which is normally quite low.

Year 2
You buy a 1m house using the 200k cash. The house has a tax value (700k) and an eigenmietwert (30k).
On your tax return you'll have -100k of assets and 30k of extra income. From that income you can deduct the maximum of either 20% OR individual improvement. You can also deduct loan payments (interest only) - say 12k.
Worse case you are adding 30-12-6=12k to your income.
Wow! Thank you dodgyken! Seems you are a professional! So you are saying the only possibility of "income tax deductible" is the 20% of the eigenmietwert? Is this the rent I would have to pay if I didn't own a property? And how is it calculated?

And in your example, I paid 200k for the house but why I have only 100k of assets? It is lovely that it's counted less but I am just curious

Thanks again!
Reply With Quote
  #7  
Old 09.11.2015, 16:27
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 13,781
Groaned at 209 Times in 181 Posts
Thanked 11,094 Times in 6,293 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Property purchase eligible for tax deduction?

Quote:
View Post
And in your example, I paid 200k for the house but why I have only 100k of assets? It is lovely that it's counted less but I am just curious

Thanks again!
You bought a house for 1,000,000 & the tax office thinks it's worth 700,000. You paid 200,000 cash, so on paper you have a negative asset of 100,000.

Perhaps it's worth more or less than the tax office's valuation, you will only know when you sell, a valuation is an opinion nothing more.
Reply With Quote
  #8  
Old 09.11.2015, 16:30
aSwissInTheUS's Avatar
Forum Legend
 
Join Date: Nov 2007
Location: Zurich area
Posts: 5,062
Groaned at 40 Times in 38 Posts
Thanked 7,138 Times in 3,241 Posts
aSwissInTheUS has a reputation beyond reputeaSwissInTheUS has a reputation beyond reputeaSwissInTheUS has a reputation beyond reputeaSwissInTheUS has a reputation beyond reputeaSwissInTheUS has a reputation beyond reputeaSwissInTheUS has a reputation beyond repute
Re: Property purchase eligible for tax deduction?

Quote:
View Post

And in your example, I paid 200k for the house but why I have only-100k of assets? It is lovely that it's counted less but I am just curious

Thanks again!
You have -100k assets. 800k debt to the bank and a house of 700k tax value.
Reply With Quote
Reply




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Eligible for Tax Return G permit? anwan Finance/banking/taxation 4 14.04.2014 16:22
Tax Deduction for rental property overseas Megamind Finance/banking/taxation 12 15.08.2012 19:12
Tax Deduction for Travel Littlestar Finance/banking/taxation 1 16.02.2011 18:41
Deduction of foreign property tax? dehansen Finance/banking/taxation 1 15.08.2010 12:11
Purchase fees for property cchalet Housing in general 17 08.06.2008 14:12


All times are GMT +2. The time now is 08:09.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2016, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0