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Old 21.10.2009, 11:41
Syt Syt is offline
Join Date: May 2009
Location: Lausanne
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Syt has made some interesting contributions
Re: Tax implications of owning a holiday property?

In any OECD country, it's the same: income and wealth that relate to a real estate are taxable in the country where the real estate is located (objective allocation).

Therefore in CH, net rental income (or virtual rental income = valeur locative = Eigenmietwert) less expenses related to mortgage and net asset value of the property (tax value less mortgage) are taxable in CH, respectively in the commune (Gemeinde) where the real estate is located. If your permanent tax residence is in CH, your home canton will prepare the intercantonal tax allocation between the canton of location of the real estate and your home canton. The allocation of mortgage and debt is proportional (not objective). Whereas in international matters, it is usually an objective allocation and you have to:
- appoint a tax representative in CH
- file each year a tax return
- pay the taxes that relate to the real estate
The applicable tax rate is at least the one corresponding to the real estate income and value, which means that the canton can tax at the corresponding worldwide rate. In some canton, (Vaud is one of them), you have a simplified taxation if you own only a real estate in CH, which is based on an estimation of the usual mortgage and worldwide income/wealth. This way, you avoid disclosing everything you have worldwide...
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