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Old 11.05.2019, 12:24
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Buying/Renting a House in Germany while Working in Switzerland: Worth it?

Hi,
A friend has bought a house just over the border in Germany because it's way cheaper and takes the train daily to his work in Switzerland.

However, I was thinking, although the house prices may be better, isn't it offset by the much higher German taxes? Is there a "catch" here? Am I missing something or it's better even taking the (45%?) tax into account?

Thanks
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Old 11.05.2019, 12:30
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

Much higher taxes. If you have your health insurance in Germany it has the advantage that the kids/non working partner are insured on your insurance.

Not sure how it works if you will be unemployed, German social security?

A lot depends on where you work and live. If you need to get to the train station first, then train ride and then a bus or whatever to get to work, it easily can take quite some time.
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Old 11.05.2019, 12:32
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

It is all depending on personal circumstances.


If he's a low salary employee, let's say 70,000 and his rent in Ch would be 2000chf he would net around 4688 per month minus rent that's 2688.


If his rent in Germany is 500EUR and his groceries also a bit lower you can see he can quickly save from rent around 15,000-18,000 chf.


The higher your salary becomes, the more this doesn't work in your favour. Not to mention the hassle of traffic and commute.


But I can definitely see why someone would do it, especially if he has his own house there (0 rent) or lives with his parents etc
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Old 11.05.2019, 12:33
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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A lot depends on where you work and live. If you need to get to the train station first, then train ride and then a bus or whatever to get to work, it easily can take quite some time.
Let's assume commuting is near-perfect. My question is how can it make sense financially between the cheaper accomodation and higher taxation? Does it make a difference if you are a German citizen? (I assume no :-/)
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Old 11.05.2019, 12:36
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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It is all depending on personal circumstances.


If he's a low salary employee, let's say 70,000 and his rent in Ch would be 2000chf he would net around 4688 per month minus rent that's 2688.


If his rent in Germany is 500EUR and his groceries also a bit lower you can see he can quickly save from rent around 15,000-18,000 chf.


The higher your salary becomes, the more this doesn't work in your favour. Not to mention the hassle of traffic and commute.


But I can definitely see why someone would do it, especially if he has his own house there (0 rent) or lives with his parents etc
Let's assume a +100K salary, but not much. Regarding the buying, are mortgage conditions in Germany better than those of Switzerland?
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Old 11.05.2019, 12:42
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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Does it make a difference if you are a German citizen? (I assume no :-/)
No, you pay taxes regardless of your nationality.
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Old 11.05.2019, 12:43
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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Let's assume a +100K salary, but not much. Regarding the buying, are mortgage conditions in Germany better than those of Switzerland?
A lot depends on you and your credit history in Germany. You also run a FX risk if you buy on a EUR mortgage and earn in CHF.
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Old 11.05.2019, 12:47
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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Let's assume a +100K salary, but not much. Regarding the buying, are mortgage conditions in Germany better than those of Switzerland?
Frugal living with a +100k salary in CH means a house in DE can be bought without mortgage. Especially if you use your pension fund.
Maybe he bought the house because it is a good way to make sure your savings (spent on the house) go up with inflation ? With the low interest rate keeping it in a savings account makes no sense.
For 100k salary rent plus taxes come to 3000 a month, out of a 7000 a month salary (after all contributions). If the guy has a family (so lower health insurance cost) then DE taxes are about equal to CH rent plus taxes plus healthcare...
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Old 11.05.2019, 12:56
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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Frugal living with a +100k salary in CH means a house in DE can be bought without mortgage. Especially if you use your pension fund.
Then you have to have quite a bit in your pension pot. Houses won´t be cheap near the border (cheap compared to Switzerland though) but you still would have to have a couple of 100.000
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Old 11.05.2019, 14:48
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

Can be so many reasons, maybe he wants a specific type of house which is above budget here but not in Germany.

Since he is your friend you can just ask him about his motivations.
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Old 24.09.2020, 12:12
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

I am not german, but now also considering buying a flat in Germany. This mainly because i worked in Germany for some years and my family is still living there, although i moved to work in Switzerland this year. Currently, I am contacting German banks for the possibility of a mortgage.

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Hi,
A friend has bought a house just over the border in Germany because it's way cheaper and takes the train daily to his work in Switzerland.

However, I was thinking, although the house prices may be better, isn't it offset by the much higher German taxes? Is there a "catch" here? Am I missing something or it's better even taking the (45%?) tax into account?

Thanks
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Old 24.09.2020, 12:43
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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Frugal living with a +100k salary in CH means a house in DE can be bought without mortgage. Especially if you use your pension fund.
Maybe he bought the house because it is a good way to make sure your savings (spent on the house) go up with inflation ? With the low interest rate keeping it in a savings account makes no sense.
For 100k salary rent plus taxes come to 3000 a month, out of a 7000 a month salary (after all contributions). If the guy has a family (so lower health insurance cost) then DE taxes are about equal to CH rent plus taxes plus healthcare...
I'm not sure buying a house in cash makes sense when you are still working and earning good money. Why would you with interest rates the way they are.
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Old 24.09.2020, 12:59
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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I am not german, but now also considering buying a flat in Germany. This mainly because i worked in Germany for some years and my family is still living there, although i moved to work in Switzerland this year. Currently, I am contacting German banks for the possibility of a mortgage.
I'd be interested in your experience getting a mortgage from German banks, while earning a salary in Switzerland...
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Old 24.09.2020, 13:09
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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I'd be interested in your experience getting a mortgage from German banks, while earning a salary in Switzerland...

Depends on your bank and your income. UBS referred me to a German bank and I got the mortgage based on my Swiss salary (but that is a couple of years ago).
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Old 24.09.2020, 13:13
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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Hi,
A friend has bought a house just over the border in Germany because it's way cheaper and takes the train daily to his work in Switzerland.

However, I was thinking, although the house prices may be better, isn't it offset by the much higher German taxes? Is there a "catch" here? Am I missing something or it's better even taking the (45%?) tax into account?

Thanks
It can be. It depends on the situation. If you save, say 800k on a house, you have to pay a lot of extra tax to offset that saving. Maybe you have a low income, so that tax isn't a big deal. Maybe you plan to work only for another 5 years so that tax isn't a long term issue etc.
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Old 24.09.2020, 13:19
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

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It can be. It depends on the situation. If you save, say 800k on a house, you have to pay a lot of extra tax to offset that saving. Maybe you have a low income, so that tax isn't a big deal. Maybe you plan to work only for another 5 years so that tax isn't a long term issue etc.
But given that Swiss mortgages are under 1%, you'd be paying significantly under 10k a year extra in mortgage payments to fund this extra cost.

If you are rich enough to be in the type of property where you save 800K from going across the border, you would probably be saving more than 10K of income tax living in Switzerland.
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Old 01.10.2020, 09:31
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Re: Buying/Renting a House in Germany while Working in Switzerland: Worth it?

my 'own' hypovereinsbank won't issue mortgage this way. In the end, through a financing agent, I got two offers, one from DB. Maybe it's not easy to get a loan in our case, but it is still possible. good luck!

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I'd be interested in your experience getting a mortgage from German banks, while earning a salary in Switzerland...
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