Thread: House buying
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Old 13.05.2008, 23:53
meloncollie meloncollie is offline
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Re: House buying

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You're telling me that even though you are paying a mortgage, and living in the house, they tax you on income you would have earned if you had the house rented out? That seems bizarre. Does this apply to all Cantons?
I believe that Eigenmietwert applies in all cantons...

Eigenmietwert was introduced as a way to level the playing field between renters and owners - it was seen as 'unfair' that homeowners were able to deduct mortgage interest, etc., something not available to renters. (Remember, something like 70% of the Swiss population rent - homeownership is not necessarily viewed as it is in other countries.)

The Eigenmietwert assessed on the house you are interested in buying should be a matter of public record - ask at the Gemeinde tax office. Also ask if there has recently been a revaluation; ours was reassessed last year, and increased something like 15%.

However, we still find owning a better financial choice than renting, all things considered.

But - we moved over here at a time when the rental market was even tighter than today, speaking no German at all, with little understanding of how things worked here, and needed a house ASAP with garden for our dogs. Not an easy thing to find; we ended up having to pay silly money to rent something halfway suitable.

In contrast, we bought our house at a time when interest rates were quite low, in a canton and Gemeinde with very low tax rates. Even with the Eigenmietwert added in, our total Swiss tax burden living in SZ is about 40% less than what we were paying in Kt. ZH.

You really have to look at the entire picture, not just rent vs mortgage but also the tax rates of the town/canton you are considering. And do be aware that in the past Swiss real estate has appreciated slowly - you also need to ask yourself if this is a sensible investment for both the short and long term, given your individual situation.

Last but certainly not least - I hated renting, felt like I was living in a fishbowl, being watched by the landlord all the time. For me, the decision to buy was mostly based on personal preference.
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