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  #21  
Old 09.04.2020, 10:21
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Re: Buying an apartment in Germany

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where did you buy? In Malta or elsewhere?
We can't get home to Malta as the airport is closed. It's a very large apartment with a 400m2 Garden, so a perfect place to be in lockdown.
It's located in St Gervais les Bains, just below Chamonix. 30 Minutes drive to Switzerland or Italy, 1 hour to Geneva Airport.

The real bummer is I was going to put the old flat on the market at the End of March.
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  #22  
Old 09.04.2020, 13:37
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Re: Buying an apartment in Germany

You have checked about that water pocket in the mountain above St Gervais, right?
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Old 09.04.2020, 13:44
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Re: Buying an apartment in Germany

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We can't get home to Malta as the airport is closed. It's a very large apartment with a 400m2 Garden, so a perfect place to be in lockdown.
It's located in St Gervais les Bains, just below Chamonix. 30 Minutes drive to Switzerland or Italy, 1 hour to Geneva Airport.

The real bummer is I was going to put the old flat on the market at the End of March.
In Verbier? Are you worried about losing cash on it or..since I think property in CH is in their own protected environment, might not react immediately to the mess outside.
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  #24  
Old 09.04.2020, 14:27
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Re: Buying an apartment in Germany

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exactly what tax did he say you would have to pay?
German capital gains tax, so 26.375%.
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  #25  
Old 09.04.2020, 16:46
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Re: Buying an apartment in Germany

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German capital gains tax, so 26.375%.
Thanks for your reply. Here I have two questions:

1. Is it correct that Capital Gains Tax would be paid on the interest earned in the second pillar fund and not on the capital? For example if you had paid 100,000 CHF into the second pillar and this 100,000 CHF earned a return of 10,000 CHF, the 26.375% would apply only to the 10,000 CHF and not the 100,000CHF giving a tax bill of 2,637.50 CHF ?

2. When withdrawing the second pillar to buy property a tax must be paid in the canton where the fund is located - is this taken into account when having to pay Capital Gains Tax in Germany as there is a double taxatoon agreement in place between Germany and Switzerland?
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  #26  
Old 09.04.2020, 19:19
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Re: Buying an apartment in Germany

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You have checked about that water pocket in the mountain above St Gervais, right?
Indeed, they made it safe several years ago & always keep an eye on it. We are in the lowest risk zone.
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  #27  
Old 09.04.2020, 19:26
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Re: Buying an apartment in Germany

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In Verbier? Are you worried about losing cash on it or..since I think property in CH is in their own protected environment, might not react immediately to the mess outside.
It's in France, we probably paid too much in any case but it was unique, the size of a Chalet without any stairs, 4 Underground garage spaces as 2 boxes & 2 outside parking spaces, built by an architect from Megeve so build quality far higher than everything else we saw. It's 17 years old but finished in old wood, wheel chair friendly. Snow clearing taken care of, far better when you don't live on site.
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  #28  
Old 12.04.2020, 09:44
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Re: Buying an apartment in Germany

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Thanks for your reply. Here I have two questions:

1. Is it correct that Capital Gains Tax would be paid on the interest earned in the second pillar fund and not on the capital? For example if you had paid 100,000 CHF into the second pillar and this 100,000 CHF earned a return of 10,000 CHF, the 26.375% would apply only to the 10,000 CHF and not the 100,000CHF giving a tax bill of 2,637.50 CHF ?

2. When withdrawing the second pillar to buy property a tax must be paid in the canton where the fund is located - is this taken into account when having to pay Capital Gains Tax in Germany as there is a double taxatoon agreement in place between Germany and Switzerland?
Hi,
1. I understood, the whole amount would be subject to German capital gains, the relevant statement from the email exchange 2 years ago: "Nach Deutschem Recht liegen hier Einkünfte aus Kapitalvermögen vor, die mit einem Steuersatz von pauschal 25 % zuzüglich 5,5 % Solidaritätszuschlag besteuert werden."
2. Yes, tax is also deducted in Switzerland and I assume you would get a credit for that on the German side but I didn't get that far in my discussions.

More generally, the German tax adviser that I spoke with had no prior experience with Swiss pensions, they researched it from first principles. It can be that others have other experiences and it would be very helpful to hear about those - I have read a lot of discussion on withdrawing 2nd pillar funds after leaving Switzerland in this forum but very little about the subsequent tax implications in the country they move to.
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  #29  
Old 12.04.2020, 19:28
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Re: Buying an apartment in Germany

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Hi,
1. I understood, the whole amount would be subject to German capital gains, the relevant statement from the email exchange 2 years ago: "Nach Deutschem Recht liegen hier Einkünfte aus Kapitalvermögen vor, die mit einem Steuersatz von pauschal 25 % zuzüglich 5,5 % Solidaritätszuschlag besteuert werden."
2. Yes, tax is also deducted in Switzerland and I assume you would get a credit for that on the German side but I didn't get that far in my discussions.

More generally, the German tax adviser that I spoke with had no prior experience with Swiss pensions, they researched it from first principles. It can be that others have other experiences and it would be very helpful to hear about those - I have read a lot of discussion on withdrawing 2nd pillar funds after leaving Switzerland in this forum but very little about the subsequent tax implications in the country they move to.
Thanks for your reply but I am not sure that I understand what you mean. I understand from your quote that the interest earned on the capital is taxed, not the capital itself.

To do my tax return I will definitely look for the help of a German tax adviser who is familiar with the Swiss system. There are quite a number of people who move from Switzerland to Germany each year and I found a few tax advisers online who help with this.
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  #30  
Old 13.04.2020, 07:54
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Re: Buying an apartment in Germany

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Thanks for your reply but I am not sure that I understand what you mean. I understand from your quote that the interest earned on the capital is taxed, not the capital itself.

To do my tax return I will definitely look for the help of a German tax adviser who is familiar with the Swiss system. There are quite a number of people who move from Switzerland to Germany each year and I found a few tax advisers online who help with this.
I would very happily be proven wrong on this! If you or any others successfully draw down pillar 2 funds without a significant tax bill (26%) while being resident in Germany then please do share your findings and any useful tax advisor details.
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  #31  
Old 13.04.2020, 19:32
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Re: Buying an apartment in Germany

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I would very happily be proven wrong on this! If you or any others successfully draw down pillar 2 funds without a significant tax bill (26%) while being resident in Germany then please do share your findings and any useful tax advisor details.
Well I am in contact with a tax advisor on this. I have a specific apartment in mind and plan on moving ahead to buy it using my second pillar savings. I will let you know how it goes.
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  #32  
Old 13.04.2020, 20:26
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Re: Buying an apartment in Germany

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Well I am in contact with a tax advisor on this. I have a specific apartment in mind and plan on moving ahead to buy it using my second pillar savings. I will let you know how it goes.
Are you planning of having an advance from the second pillar to buy a main residence or taking the cash & buying the place with the proceeds? The tax may be different.
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  #33  
Old 15.04.2020, 11:34
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Re: Buying an apartment in Germany

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Are you planning of having an advance from the second pillar to buy a main residence or taking the cash & buying the place with the proceeds? The tax may be different.
I wish to buy an apartment where I will live myself.
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Old 15.04.2020, 11:38
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Re: Buying an apartment in Germany

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I wish to buy an apartment where I will live myself.
It can be an advance rather than a full cash out.
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  #35  
Old 15.04.2020, 16:55
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Re: Buying an apartment in Germany

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It can be an advance rather than a full cash out.
I hope to withdraw as much of the second pillar money as possible in order to reduce the amount I need to borrow to make the purchase.
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Old 15.04.2020, 17:07
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Re: Buying an apartment in Germany

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I hope to withdraw as much of the second pillar money as possible in order to reduce the amount I need to borrow to make the purchase.
You can withdraw 100% as an advance to purchase a second residence, if the property is sold the money goes back into the pension. I suspect that is your only option as I presume you are subject to compulsory insurance.
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Old 16.04.2020, 15:53
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Re: Buying an apartment in Germany

I was in contact with a tax accountant who quoted me aprice of 3500 CHF netto to calculate my tax liability in this issue!
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  #38  
Old 16.04.2020, 20:19
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Re: Buying an apartment in Germany

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You can withdraw 100% as an advance to purchase a second residence, if the property is sold the money goes back into the pension. I suspect that is your only option as I presume you are subject to compulsory insurance.
I contacted my pension fund and that is exactly what they told me. In this case, is not really just a change of investment strategy? Instead of investing the money in shares I am investing it in a property where I will live until retirement. Which also makes me wonder if this money can then be taxed as I am not actually withdrawing it. I will contact a German tax adviser on this.
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Old 17.04.2020, 09:13
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Re: Buying an apartment in Germany

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I contacted my pension fund and that is exactly what they told me. In this case, is not really just a change of investment strategy? Instead of investing the money in shares I am investing it in a property where I will live until retirement. Which also makes me wonder if this money can then be taxed as I am not actually withdrawing it. I will contact a German tax adviser on this.
I also enquired about this option of using my Swiss pillar 2 funds to purchase a property in Germany. My German tax adviser told me that the pillar 2 funds would be treated the same as if you simply withdrew them and so subject to 26.375% capital gains tax.
At that point, I gave up and have left my pillar 2 in Switzerland. If you have success with this approach, I am very interested to learn the details!
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Old 14.05.2020, 21:37
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Re: Buying an apartment in Germany

Hi Dack, did you at the end manage to get the funds from the second pillar? If yes, how was it Germany?
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