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Old 12.08.2012, 17:26
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Tax Deduction for rental property overseas

I have heard that if someone has been renting a property outside Switzerland, he can apply for tax deduction from his salary. The way it works is that a sum of 1500 from the gross salary is subtracted and added to the Net.

Is this correct?

What do I need to submit to the cantonal authorities (or employer??)? Rental contract?
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Old 12.08.2012, 18:10
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Re: Tax Deduction for rental property overseas

Too few details. What kind of property and why?

Was it your main family home and you were working in Switzerland? In that case you may be able to deduct something. A vacation property? If you find you can deduct that please let us know. I am sure that many of us would be delighted.
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Old 12.08.2012, 18:30
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Re: Tax Deduction for rental property overseas

Before moving to Switzerland, I was living in a rented place which I have decided to keep it. I have the rental lease papers with me but don't know how to proceed.. Do I have to get the last few bills as well or is the lease papers enough?
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Old 12.08.2012, 19:17
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Re: Tax Deduction for rental property overseas

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Before moving to Switzerland, I was living in a rented place which I have decided to keep it. I have the rental lease papers with me but don't know how to proceed.. Do I have to get the last few bills as well or is the lease papers enough?
If you have a reason to keep it (ie you have a wife and children that are staying behind and you are commuting at weekends for example) then you may be able to deduct some of the costs of maintaining a second household and some of the travel between the two. To what extent you will be able to deduct it will probably be a matter of negotiation between you and the tax authorities.

If you are just keeping the apartment on a whim, then I think you are probably sol...(in other words, out of luck...).
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Old 12.08.2012, 19:41
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Re: Tax Deduction for rental property overseas

Never heard of that. Agree with @snoopy
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Old 13.08.2012, 01:17
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Re: Tax Deduction for rental property overseas

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I have heard that if someone has been renting a property outside Switzerland, he can apply for tax deduction from his salary. The way it works is that a sum of 1500 from the gross salary is subtracted and added to the Net.

Is this correct?

What do I need to submit to the cantonal authorities (or employer??)? Rental contract?
When you own and rent property outside of Switzerland you...

a) add the property value to your wealth assessment to determine your global wealth, which determines the wealth tax percentage
b) deduct the property value from the wealth tax, as you don't pay wealth tax on non-CH property
c) add all rental income as income, which is taxed
d) add property maintenance costs (actuals, or pauschal, as you wish) as deductions.

Of course, the above assumes you file an annual tax return in CH.

And you must provide sufficient documentation to backup your claims eg: documents showing purchase price of the property, documents showing rental income of the property
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Old 13.08.2012, 06:30
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Re: Tax Deduction for rental property overseas

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When you own and rent property outside of Switzerland you...

a) add the property value to your wealth assessment to determine your global wealth, which determines the wealth tax percentage
b) deduct the property value from the wealth tax, as you don't pay wealth tax on non-CH property
c) add all rental income as income, which is taxed
d) add property maintenance costs (actuals, or pauschal, as you wish) as deductions.

Of course, the above assumes you file an annual tax return in CH.

And you must provide sufficient documentation to backup your claims eg: documents showing purchase price of the property, documents showing rental income of the property
FriendlyKiwi, the OP made it clear in his second post that he does not own the property, he is the tenant.

As a result, IMHO, he cannot deduct anything unless he can explain convincingly to the tax authorities that he needs to maintain two households.
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Old 13.08.2012, 08:05
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Re: Tax Deduction for rental property overseas

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I have heard that if someone has been renting a property outside Switzerland, he can apply for tax deduction from his salary. The way it works is that a sum of 1500 from the gross salary is subtracted and added to the Net.

Is this correct?

What do I need to submit to the cantonal authorities (or employer??)? Rental contract?
We did this for the first few years until we had settled here. Your employer has to do it (and be willing to do it) but the agency was doing it for all their employees. Friends were allowed only one year of the 1500 a month allowance, others maybe 3. Ours stopped we bought our home here. It was on the Payslip and end of year Lohnausweis as expatriate allowance.
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Old 13.08.2012, 19:39
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Re: Tax Deduction for rental property overseas

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We did this for the first few years until we had settled here. Your employer has to do it (and be willing to do it) but the agency was doing it for all their employees. Friends were allowed only one year of the 1500 a month allowance, others maybe 3. Ours stopped we bought our home here. It was on the Payslip and end of year Lohnausweis as expatriate allowance.
So its upto the employer then. What kind of documents did you submit to your employer?
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Old 13.08.2012, 19:58
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Re: Tax Deduction for rental property overseas

What Marie-Zug has told you isn't completely wrong, however the expatriate tax status is not granted to everyone and is subject to strict conditions. You, or your company, would first have to demonstrate that you are here either on temporary assignment within your company or that you are here as a specialist on a fixed term contract for a specific project.

You specifically cannot get a tax break for the rent of your property abroad, but you can get breaks for a whole slew of other things, limited to 5 years. Expatriate status is not a given and depends very much on the canton in which you live.

You don't say where you are moving to so I have attached the guidelines for Zurich and Aargau as examples (both in German I am afraid).
Attached Files
File Type: pdf ag_expatriates.pdf (40.2 KB, 824 views)
File Type: pdf RichtlinienExpatriates_ZH.pdf (543.4 KB, 220 views)
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Old 13.08.2012, 20:21
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Re: Tax Deduction for rental property overseas

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Too few details. What kind of property and why?

Was it your main family home and you were working in Switzerland? In that case you may be able to deduct something. A vacation property? If you find you can deduct that please let us know. I am sure that many of us would be delighted.
We actually have to pay tax on our holiday/second property in the UK, as it has to be declared as part of our 'fortune' (lol)!

We have to pay tax on said flat based on its value AND on its potential rental income (even though we do not rent it! - just like for the house we own in CH- you pay tax on potential rental cost).

Last edited by Odile; 15.08.2012 at 18:14.
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Old 14.08.2012, 20:26
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Re: Tax Deduction for rental property overseas

And just to complete the picture, here is a link to the Federal Law on which these tax agreements are based:

French
http://www.admin.ch/ch/f/rs/6/642.118.3.fr.pdf

German
http://www.admin.ch/ch/d/sr/6/642.118.3.de.pdf
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Old 15.08.2012, 18:12
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Re: Tax Deduction for rental property overseas

Thank you all for your useful input.
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