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  #61  
Old 01.12.2016, 20:05
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Re: Eigenmietwert on (unused) property abroad?

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I ran your hypothetical situation of an increase in taxable income from 100,000 to 116,395 in Zurich in the calculator on Homegate. It gave an increase of approx. 5k, which feels much more reasonable compared to the 16k you have.

I also ran your numbers against an affordability calculator from Credit Suisse. If you earn 120k a year as implied by your 100k taxable income, even with 350k down, they will not lend you the remaining 650k. Affordability is calculated at 5% interest plus maintenance costs (and amortisation, which is not relevant in your example) and can't be more than 33% of gross income. Looks like a minimum of 128k income would be needed.
16k is the increase in taxable amount. 5200 is the actual tax, which is what you calculated. What do you mean? Where do I count 16k as cost?

Sure, I am aware of the 5% "tragbarkeit". I'm just putting in even numbers for easy calculation. But yes, the correct example should take this into consideration and then the hit from Eigenmietwert would be higher (6600 for an income of 200'000).
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  #62  
Old 01.12.2016, 20:11
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Re: Eigenmietwert on (unused) property abroad?

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I'm telling you, people will gladly sell you property at 3% yield or less. Enough people apparently buy at these prices. I wouldn't really pay 800k for your flat if you're paying only 2400 in rent for it. Your landlord probably didn't pay anything near 800k for it either.
I just didn't get what you meant by "People will try to sell you property at 3% gross yield". You mean for a flat that costs 2'500*12=30'000 to rent, people will try to get 1'000'000, when the realistic value to find a buyer could be 600'000? And what about all the Neubau websites? Are these listed prices so much negotiable? And Homegate? It's almost impossible to find anything nice in Zurich with a listed price under a million.
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  #63  
Old 01.12.2016, 20:15
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Re: Eigenmietwert on (unused) property abroad?

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16k is the increase in taxable amount. 5200 is the actual tax, which is what you calculated. What do you mean? Where do I count 16k as cost?
I misunderstood your earlier post.
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  #64  
Old 01.12.2016, 20:22
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Re: Eigenmietwert on (unused) property abroad?

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I just didn't get what you meant by "People will try to sell you property at 3% gross yield"
The price that you'll pay as a spontaneous home buyer aren't the prices that professional investors are ready to pay for it.

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And what about all the Neubau websites?
Overpriced, all the time. You're paying a big premium for that brand new build smell. But at least you don't have to flip a finger, just move in and live and it's all brand new.

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Are these listed prices so much negotiable?
Usually not, often they can afford to wait a really long time until they find a buyer.
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  #65  
Old 01.12.2016, 20:27
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Re: Eigenmietwert on (unused) property abroad?

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The price that you'll pay as a spontaneous home buyer aren't the prices that professional investors are ready to pay for it.


Overpriced, all the time. You're paying a big premium for that brand new build smell.


Usually not, often they can afford to wait a really long time until they find a buyer.
Haha, then what you're writing is: new houses are overpriced, nobody will sell you cheaper on the aftermarket either, but this is not the real price, because it is not what big companies are paying? I'm trying to build a real life example here and not calculate the rent % in relation to some theoretical investor value, but to market value for "retail" buyers. You go to a website of a developer, who offers half of apartments for sale and half for rent, and you get 3%. How do you buy a cheaper flat then?
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  #66  
Old 01.12.2016, 20:36
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Re: Eigenmietwert on (unused) property abroad?

Buy an old flat and renovate, tons of savings potential, starting from writing the whole project off your taxes. Or invest (much) more money, demolish and rebuild something really old with an architect. If you take a random offer from a developer, you're paying a big premium for all the work being already done for you.
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  #67  
Old 01.12.2016, 20:47
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Re: Eigenmietwert on (unused) property abroad?

So let's start a company that buys, renovates, and sells old flats, if it's such a goldmine. Because apparently an old flat you can buy for the real price, but a renovated one is overpriced.
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  #68  
Old 01.12.2016, 20:50
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Re: Eigenmietwert on (unused) property abroad?

Yep, that can be a profitable business if you have the experience and money to invest.

In Switzerland though you'll be hit hard by capital gain taxes on resale. But doing it for your own home can save you a lot of money.

The real goldmine is when you can source workers and material from cheap countries like Poland. Local swiss labor is very expensive.

Last edited by ivank; 01.12.2016 at 21:13.
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  #69  
Old 01.12.2016, 20:53
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Re: Eigenmietwert on (unused) property abroad?

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Yep, that can be a very profitable business if you have the experience and money to invest.
Presumably a developer is looking for a 35% profit for his efforts.
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  #70  
Old 01.12.2016, 21:19
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Re: Eigenmietwert on (unused) property abroad?

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Yep, that can be a profitable business if you have the experience and money to invest.

In Switzerland though you'll be hit hard by capital gain taxes on resale. But doing it for your own home can save you a lot of money.

The real goldmine is when you can source workers and material from cheap countries like Poland. Local swiss labor is very expensive.
Haha, Poland . They earn like 500-1000 CHF in there. But bringing them to Switzerland is a different story. They need a permit, a place to live, bills to pay. Is it easy to get a permit for employees from the EU? And how much less than the Swiss can you actually pay them? Are you not bound by some minimal wage agreements?
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  #71  
Old 01.12.2016, 21:42
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Re: Eigenmietwert on (unused) property abroad?

Those questions are outside my area of knowledge. I think short term contracts under 3 months with EU workers are most unbureaucratic, they/you just need to send a notice to authorities that they do such a short time work here and no permits are needed.
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  #72  
Old 01.12.2016, 23:46
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Re: Eigenmietwert on (unused) property abroad?

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Haha, Poland . They earn like 500-1000 CHF in there. But bringing them to Switzerland is a different story. They need a permit, a place to live, bills to pay. Is it easy to get a permit for employees from the EU? And how much less than the Swiss can you actually pay them? Are you not bound by some minimal wage agreements?
Forget about it :P I know first hand someone running construction business in Poland. They struggle to source enough workers, and the workers asks for ~1,5k €. People are organising themselves in forums, networking in general and go all over EU to get few times bigger net profit. Trying to find workers for 1k CHF even if you provide for every other expenses would be challenging. There are already Polish construction sarl registered in CH. Translate questions to Polish and google on polish forums
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  #73  
Old 01.12.2016, 23:56
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Re: Eigenmietwert on (unused) property abroad?

This thread got interesting. I was also wondering for some time about the reality of Swiss life. I have heard already few trusted stories about people buying over 1M property right after retiring. One question is how they earned such amount, other question is what's the catch.

Assuming the typical story, one before retirement has ~1M wealth, ~1M mortgage for over 30 past years paying only interests not capital to keep maximal deductions. Does it really makes sense? Is there such a huge profit of having the mortgage instead of just renting over the 30 years?

I was also wondering if people always can afford to keep the overpriced houses. What if someone earns 60k CHF a year but his property is suddenly worth 3M and 'imputed income' is 7k monthly...?
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  #74  
Old 02.12.2016, 00:26
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Re: Eigenmietwert on (unused) property abroad?

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Forget about it :P I know first hand someone running construction business in Poland. They struggle to source enough workers, and the workers asks for ~1,5k €. People are organising themselves in forums, networking in general and go all over EU to get few times bigger net profit.
Still way cheaper than what the local swiss workers would charge.

And inside Poland, aren't you supposed to be hiring workers from further down the food chain - from Ukraine? In Switzerland that won't fly - because they're non EU, you suddenly need to start paying them the same wages as to the Swiss. But I hear things work differently in Poland.

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This thread got interesting. I was also wondering for some time about the reality of Swiss life. I have heard already few trusted stories about people buying over 1M property right after retiring. One question is how they earned such amount, other question is what's the catch.
You only need just 10% cash to buy - 100k, that's like, just 1-2 years of work on a good paying job. Another 10% cash you can take from pension fund, after some 40 years of hard work you surely should have some 5-6 figures in it.

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I was also wondering if people always can afford to keep the overpriced houses. What if someone earns 60k CHF a year but his property is suddenly worth 3M and 'imputed income' is 7k monthly...?
Only the land value increases, buildings are costing money. If your land suddenly got that much more expensive, maybe it'd be a good time to sell it to some developer so that he can build some upscale luxery property on it, while you move to something more suitable, while pocketing the proceeds from the sale.
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Old 02.12.2016, 22:20
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Re: Eigenmietwert on (unused) property abroad?

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Still way cheaper than what the local swiss workers would charge.

And inside Poland, aren't you supposed to be hiring workers from further down the food chain - from Ukraine? In Switzerland that won't fly - because they're non EU, you suddenly need to start paying them the same wages as to the Swiss. But I hear things work differently in Poland.
Ukraine is not in EU, that makes almost the same difficulty from them as to go to Switzerland. Well, I have heard that many Ukraine people migrated to Poland recently taking the opportunity of the military conflict claiming refugee status. Poland gladly accept any people willing to live and work in the country as young Poles goes away.... Staffing problems are probably in any job sector. The high end of the Polish salary scale for my profession was also facing the same issues as the construction company I mentioned.

Anyway, what I meant to say is that many construction workers decides to go frequently abroad for ~3k€, I guess (that's what I can conclude from forums etc..), instead of willing to work in Poland for the 1,5k€.
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  #76  
Old 03.12.2016, 00:00
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Re: Eigenmietwert on (unused) property abroad?

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Haha, Poland . They earn like 500-1000 CHF in there. But bringing them to Switzerland is a different story. They need a permit, a place to live, bills to pay. Is it easy to get a permit for employees from the EU? And how much less than the Swiss can you actually pay them? Are you not bound by some minimal wage agreements?
Yes I've done this for the past two years. It was simple, easy and saved me thousands. The only downer is the electrics and plumbing need to be done by local swiss labour and that cost a fortune as usual.
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Old 03.12.2016, 00:37
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Re: Eigenmietwert on (unused) property abroad?

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Yes I've done this for the past two years. It was simple, easy and saved me thousands. The only downer is the electrics and plumbing need to be done by local swiss labour and that cost a fortune as usual.
Could you share what was the cost and how it compares to cost of swiss labour?
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  #78  
Old 03.12.2016, 11:47
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Re: Eigenmietwert on (unused) property abroad?

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Ukraine is not in EU, that makes almost the same difficulty from them as to go to Switzerland. Well, I have heard that many Ukraine people migrated to Poland recently taking the opportunity of the military conflict claiming refugee status. Poland gladly accept any people willing to live and work in the country as young Poles goes away....
The Ukrainians go to Poland because it's near and because the language barrier is very low. They can learn to speak Polish within months. Also I think it is easier for them to get a work permit in Poland than further west. Or they just work without permit. Small businesses will gladly hire people "unofficially" to avoid taxes. It is estimated that there may be already 1 million Ukrainians in Poland.
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  #79  
Old 03.12.2016, 13:02
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Re: Eigenmietwert on (unused) property abroad?

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Could you share what was the cost and how it compares to cost of swiss labour?
Around 25eur an hour. Swiss builders are considerably more.
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  #80  
Old 04.12.2016, 16:00
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Re: Eigenmietwert on (unused) property abroad?

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Around 25eur an hour. Swiss builders are considerably more.
25 CHF/hour is what you pay for a cleaning lady. Is that black or legal? If the latter, what does it take to get a permit? if a private person wants to legally hire a person from outside Switzerland to do some service in Switzerland, is it possible?
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