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Old 19.10.2016, 15:11
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Eigenmietwert on (unused) property abroad?

I finally resorted to a Treuhand for my (first!) tax return in CH (I chose someone often recommended here on the forum).

The accountant tells me that I need to add Eigenmietwert to my income for 4.5% of the value of a flat I own abroad, which is not let out nor occupied by a family member.

According to this thread https://www.englishforum.ch/finance-...k-property.htm, it seems to me that my accountant is wrong, and that I would only need to pay wealth tax on this flat, no additional income tax.

But, is he really wrong? Does anybody know of some official document (for ZH) which states these matters in a clear way?

Thanks!
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Old 19.10.2016, 16:19
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Re: Eigenmietwert on (unused) property abroad?

I have the same... unfortunately... something to do with potential rental income.

Have to pay even if I already have local taxes for the property.

On the plus side I can deduct for maintenance costs and other thing done to the flat (keep the proof), or interest paid on a mortgage if you have (again with proof).

What you can do it check you are using the correct valuation of the property, some countries provide you with state value (Katasterwert) that can be lower than the original sales price.

Best to discuss with your Treuhand, you have to trust they do a good job for you. (Although the responsibility is always yours in the end.)
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Old 19.10.2016, 17:15
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Re: Eigenmietwert on (unused) property abroad?

Do keep us updated please on what needed to be added?


Thanks!
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Old 19.10.2016, 17:26
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Re: Eigenmietwert on (unused) property abroad?

I think in general you do not pay the tax directly on income from abroad. You have to declare it and it will influence the tax rate on your swiss income - the tax rate is determined by your global income.

Wealth tax however is paid on your worldwide assets.
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Old 19.10.2016, 17:27
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Re: Eigenmietwert on (unused) property abroad?

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Do keep us updated please on what needed to be added?
I have asked the ZH tax office which replied very promptly:

Im Sinn einer allgemeinen Auskunft können wir auf Ihre Anfragen untenstehende Antwort geben. Wir möchten Sie aber darauf hinweisen, dass dies eine allgemeine Auskunft ist. Allgemeine Auskünfte sind rechtlich unverbindlich und geben keinen Anspruch darauf, dass im Einzelfall gemäss dieser Auskunft entschieden wird (vgl. Merkblatt betreffend amtliche Auskünfte und Vorbescheide vom 13.10.2008). Die definitive steuerliche Würdigung des konkreten Sachverhalts kann erst im Rahmen des ordentlichen Einschätzungsverfahrens durch den dannzumal zuständigen Steuerkommissär/in erfolgen.

Die Besteuerung von Liegenschaften erfolgt immer in dem Kanton, bzw. in dem Land wo sich die Liegenschaft befindet (Ort der gelegenen Sache).

Besitzt eine im Kanton Zürich steuerpflichtige Person Liegenschaften in einem anderen Kanton oder im Ausland, so werden diese Liegenschaften und die Erträge daraus im Kanton Zürich nur satzbestimmend berücksichtigt. Die Verteilung der (gesamten) Schulden und Schuldzinsen erfolgt dabei quotenmässig nach Lage der Aktiven. Die übrigen Abzüge sowie allfällige Gewinnungskostenüberschüsse werden gemäss den interkantonalen Ausscheidungsregeln verteilt.

Für die Deklaration von ausserkantonalen, resp. ausländischen Liegenschaften genügt es, diese im Liegenschaftenverzeichnis (Vermögen und Ertrag) aufzuführen und das Total in die Steuererklärung Ziffer 6.4, resp. 31.2 zu übertragen. Bei Kauf oder Verkauf von Liegenschaften während der Steuerperiode bitten wir Sie zudem das Kauf-/Verkaufsdatum in der Steuererklärung zu deklarieren (im Liegenschaftenverzeichnis oder unter Ziffer 60 "Bemerkungen"). Die Ausscheidung wird dann im Rahmen des Einschätzungsverfahrens von Amtes wegen vorgenommen.

Den Eigenmietwert können Sie 4,25% des Vermögenswertes einsetzen.

Still not 100% sure what it means though when it says "Die Ausscheidung wird dann im Rahmen des Einschätzungsverfahrens von Amtes wegen vorgenommen.".
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Old 19.10.2016, 18:46
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Re: Eigenmietwert on (unused) property abroad?

I think it just means the tax office will calculate how much you owe for the part of the year that you have been a property owner. The 'ausscheidung' is a technical term for calculation/division of taxes if the tax payer has to pay taxes in different kantons or countries. The 'Einschätzungsverfahren' is just the procedure of the tax office calculating how much you owe.
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Old 20.10.2016, 11:10
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Re: Eigenmietwert on (unused) property abroad?

We have over the years had several overseas properties with different uses and had to declare them for tax. In canton Zurich we have submitted (and had accepted) tax returns based on the following:

Eigenmietwert only applies to your primary residence within Switzerland. There is no such thing for overseas property.

You will need to provide a value for the property - but this is only for your wealth tax and is usually negligible. They will rarely check this value and are usually happy with a guess.

Any income derived from the property will be taxed in the country of origin (if EU), but must be declared in Switzerland - however this amount in itself is not taxed here - it it only used to calculate the marginal tax rate on the rest of your income. If your property is not rented this will not apply anyway.

Any deductions, such as interest or maintenance can only be deducted from any income you declare.

We received the above advice from speaking with the tax office and tax professionals.
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Old 20.10.2016, 11:54
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Re: Eigenmietwert on (unused) property abroad?

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Eigenmietwert only applies to your primary residence within Switzerland. There is no such thing for overseas property.

We received the above advice from speaking with the tax office and tax professionals.
I seem to have gotten a different opinion from the ZH tax office. Or did I misunderstand it?
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Old 20.10.2016, 12:06
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Re: Eigenmietwert on (unused) property abroad?

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I seem to have gotten a different opinion from the ZH tax office. Or did I misunderstand it?
We had to include it as income on our tax return in Neuchâtel for our property in Belgium. If it is not rented out and the actual rental income declared on the form they calculate an assumed rental income based on the value of the property.
It certainly exists for overseas properties in this canton.
We were not paying any tax at all on it in Belgium where the property was actually located.

On the other hand you can deduct mortgage interest payments and maintenance costs under your expenses so it does tend to even itself out.
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Old 20.10.2016, 12:26
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Re: Eigenmietwert on (unused) property abroad?

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I seem to have gotten a different opinion from the ZH tax office. Or did I misunderstand it?
Für die Deklaration von ausserkantonalen, resp. ausländischen Liegenschaften genügt es, diese im Liegenschaftenverzeichnis (Vermögen und Ertrag) aufzuführen und das Total in die Steuererklärung Ziffer 6.4, resp. 31.2 zu übertragen.

I think this statement supports what we were told - it essentially says properties outside of canton of residence or overseas just need to be entered on the list of assets and within the relevant tax declaration part 6.4
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Old 20.10.2016, 14:54
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Re: Eigenmietwert on (unused) property abroad?

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Für die Deklaration von ausserkantonalen, resp. ausländischen Liegenschaften genügt es, diese im Liegenschaftenverzeichnis (Vermögen und Ertrag) aufzuführen und das Total in die Steuererklärung Ziffer 6.4, resp. 31.2 zu übertragen.

I think this statement supports what we were told - it essentially says properties outside of canton of residence or overseas just need to be entered on the list of assets and within the relevant tax declaration part 6.4
Well, AFAIU, Ziffer 6.4 has to do with *income* from real estate, not wealth (for that there's Differ 31.2). So, to me it seems that what the tax office told me is in contradiction to what you earlier wrote: "Eigenmietwert only applies to your primary residence within Switzerland. There is no such thing for overseas property."...
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Old 20.10.2016, 15:08
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Re: Eigenmietwert on (unused) property abroad?

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I think in general you do not pay the tax directly on income from abroad. You have to declare it and it will influence the tax rate on your swiss income - the tax rate is determined by your global income.

Wealth tax however is paid on your worldwide assets.
Yes, that's correct. And in order to calculate the values to be entered in the declaration, I got this reply from the Kantonales Steueramt ZÜRICH:

Deklaration Ferienwohnung in der Steuererklärung:
Steuerwert per Ende Jahr = Kaufpreis x 70% (abgerundet auf nächsten Tausender)
Eigenmietwert = Steuerwert x 4,25% (abgerundet auf nächsten Hunderter)

At least this is how it works in ZH.
Hope it helps...
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Old 29.11.2016, 22:34
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Re: Eigenmietwert on (unused) property abroad?

In the end my Treuhand has just converted to CHF the full (not the 70% as written above) value I have estimated for the flat and took the 4.25% as additional income, minus a lump-sum deduction of 20% for maintenance costs.

They told me that I would only have the additional income if no family member is living in the flat (no one is), but I cannot find anywhere on the Steuererklarung which specifies this.

Also, they forgot to add the size of the flat (I am adding it by hand).

You guys see something they did wrong?
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Old 29.11.2016, 22:58
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Re: Eigenmietwert on (unused) property abroad?

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value I have estimated for the flat
What will you answer if they ask where the value came from? Don't you have some valuation of it on hand in your country, like cadaster value, or buying price?

If you have any value on an official looking paper, I think it's pretty safe to use it, even if it's far below local market realities.

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minus a lump-sum deduction of 20% for maintenance costs.
If you have a mortgage on it, you could've deducted it too, on Schuldenverzeichnis.
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Old 29.11.2016, 23:03
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Re: Eigenmietwert on (unused) property abroad?

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What will you answer if they ask where the value came from? Don't you have some valuation of it on hand in your country, like cataster value, or buying price?
The "cataster value" in Italy is really far from the commercial one.

I reached my estimate by taking the average price of a square meter in the area from a website of the Italian government, times the square meters.

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If you have a mortgage on it, you could've deducted it too, on Schuldenverzeichnis.
No mortgage.
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Old 29.11.2016, 23:06
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Re: Eigenmietwert on (unused) property abroad?

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The "cataster value" in Italy is really far from the commercial one.
If you have it on paper, I would totally declare that if I were you

Why pay extra taxes when you're not even being asked to? It probably makes only a small difference, but still.

Last edited by ivank; 30.11.2016 at 00:46.
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Old 29.11.2016, 23:09
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Re: Eigenmietwert on (unused) property abroad?

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If you have it on paper, I would total declare that if I were you

Why pay extra taxes when you're not even being asked to?
They want to know the commercial value and that's the one I am giving them.
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Old 29.11.2016, 23:10
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Re: Eigenmietwert on (unused) property abroad?

Your loss.

IMHO they won't even care. They wouldn't even blink for some couple hundred franks of difference in taxes owed.
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Old 29.11.2016, 23:12
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Re: Eigenmietwert on (unused) property abroad?

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Your loss.

IMHO they won't even care.
Perhaps. Or maybe if I do sell the place in a few years and get 3 times the value I have been declaring for years on my account they'll start to care.
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Old 29.11.2016, 23:12
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Re: Eigenmietwert on (unused) property abroad?

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The "cataster value" in Italy is really far from the commercial one.
So is the value that one declares on Swiss property.

Generally, it's about 1/3 of the commercial value.

Tom
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