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Old 18.09.2019, 20:00
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Buying a property in Switzerland Tax query.

Hi Guys

A quick question , we are looking at buying a property in Switzerland to live in. You would be paying considerably less in monthly payments than a rental of a similar size. I have been told that owning your own Swiss home increases your tax bracket and you would end up paying more in taxes and negating the savings you would make by not renting.

Does anybody have experience in this?

Many Thanks

Steve
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Old 18.09.2019, 20:05
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Re: Buying a property in Switzerland Tax query.

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Hi Guys

A quick question , we are looking at buying a property in Switzerland to live in. You would be paying considerably less in monthly payments than a rental of a similar size. I have been told that owning your own Swiss home increases your tax bracket and you would end up paying more in taxes and negating the savings you would make by not renting.

Does anybody have experience in this?

Many Thanks

Steve
Steve, do you really believe if this were true, people would buy property in Switzerland ?

Go ask your accountant, or pay for 30 minutes of their time and have them make you a calculation. Forget the big guys, they’re useless for this, get a small local guy, cheaper and more knowledgable in such matters
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Old 18.09.2019, 20:06
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Re: Buying a property in Switzerland Tax query.

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Hi Guys

A quick question , we are looking at buying a property in Switzerland to live in. You would be paying considerably less in monthly payments than a rental of a similar size. I have been told that owning your own Swiss home increases your tax bracket and you would end up paying more in taxes and negating the savings you would make by not renting.

Does anybody have experience in this?

Many Thanks

Steve
The property will increase your earnings by say 70% of rental value so possibly tax on 25k on a normal property.
Rising interest rates could have a far bigger effect as interest rates are currently negative, increase by 5% & things look very different.
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Old 18.09.2019, 20:31
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Re: Buying a property in Switzerland Tax query.

i recently did a calculation. given current market prices for the area i looked at, interest+maintenance+tax+interest deductions is about 1/2 - 2/3 equivalent rent.

as fmf mentions, payments are hugely sensitive to interest rates given the current low rate environment.
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Old 18.09.2019, 20:57
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Re: Buying a property in Switzerland Tax query.

If you live in your own property a virtual rental income (Eigenmietwert/valeur locative https://www.ch.ch/en/rental-value/ ) is added to your taxable income.

On the other hand you can deduct mortgage interest payments (but not amortization), renovation and repair cost, insurance cost, and some other stuff.

The virtual rental income is around 60 - 70% of the market rental value of the property. It is special form of a real estate/property tax which takes into account your overall economic capabilities. If you earn less you will pay less of this special "property tax". In the worst it is taxed at highest marginal tax rate (~42% in canton ZH).

More information in German:
https://www.raiffeisen.ch/casa/de/im...nmietwert.html

Some cantons have in addition to the virtual rental income and extra property tax https://www.ch.ch/en/property-tax/
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Old 18.09.2019, 20:49
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Re: Buying a property in Switzerland Tax query.

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Hi Guys

A quick question , we are looking at buying a property in Switzerland to live in. You would be paying considerably less in monthly payments than a rental of a similar size. I have been told that owning your own Swiss home increases your tax bracket and you would end up paying more in taxes and negating the savings you would make by not renting.

Does anybody have experience in this?

Many Thanks

Steve

Read this
https://www.ch.ch/en/checklist-homeownership/

For the majority of Swiss buying a house is out of the question. It stinks!
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