Last year we have invested in an appartment to be finished in 2024. Then we moved to a rented appartment and now think it suits our family needs better.

Will it be able to rent out the purchased one and continue renting this?

We have paid 10% cash so far and plan to pledge another 10% from pension funds when the construction is finished. Will renting out have any implications for us tax-wise?

Your mortgage provider must agree. When I looked into this last (quite a while ago), typically for rental properties, they'll only lend 50% of the value.

You pay tax on any rental income, you get a tax deduction on maintenance, and you're taxed on the value of the property.

Can also deduct any mortgage/interest from tax.

Renting out is not directly forbidden by the contract, but we still need to ask the bank, right?

I have seen in some threads that
pension money need to be returned if used for mortgage. I wonder if it applies to cashing it out only or also to pledging?

Noi it is not allowed to fund an investment property with pension funds, you HAVE to live in it if you use pension funds or pay back the pension.

We were told we had to pay back the pension withdrawal should we rent the place out. When that time came 15 years later, the bank did not enforce that.

Now we have Pilar 3a accounts Pledged on our place and not domiciled in CH at the moment. Bank is now saying we can't have these pledged 3a accounts as non-domiciled. Does anyone know any restrictions on that?

Looks like the time to move banks as the we were previously asked to pay it back in full with not much notice (fun hey?). I think our bank is reacting to us moving all our cash out as interest rates went up where we live and we can't claim our main residence interest off taxes here. Does anyone have a good exerience of refinancing a mortgage on a Swiss house from overseas?

Wow rather you than me. The Rules are very clear on that- for all Banks- so moving to another will probably not be possible.

If this is consistent for all banks, would you then have a link for OP, makes it easier to read this through and understand what the requirements are.

No I do not. It was very clearly explained to us just a few weeks ago. To do with clear changes in Swiss Law, not Banks.

I have no expertise in the subject, so I am sure someone will come along soon, who does, and will give clear links.

I think you will find pension fund rules fall under federal law not just some bank deciding what they fancy

This is from moneyland.ch - not fact checked by myself, but I do believe is correct.



''Using your occupational pension fund (pillar 2a) assets towards a down payment or mortgage amortization of a property is possible, but a number of requirements must be met.

Firstly, you can only use these assets to purchase a primary residence which you intend to live in. You cannot use retirement savings towards investment property or a holiday home. Secondly, You can only withdraw 2a assets towards a home purchase every 5 years. Thirdly, a minimum of 20,000 Swiss francs must be withdrawn.

When using pension fund savings to buy a home, you can withdraw 100% of the assets contributed to your fund before you turn 50 years old. Only a maximum of 50% of assets contributed after you turn 50 years old can be withdrawn towards a home purchase.

If you plan to use retirement assets from your occupational pension fund towards buying a home, it is important to inform your pension fund well ahead of time and have them provide you with a written confirmation before going through with the purchase.

Most pension funds charge a fee to process the withdrawal, and this fee can be as high as several hundred francs. For this reason, making a single, large withdrawal can be preferable to making multiple withdrawals (every 5 years, for example).

Assets which you withdraw from your pension fund are subject to taxation. However, the tax rates used for withdrawn 2a assets are lower than regular income tax rates. How much you pay in tax depends on which canton and municipality you reside in.

The obvious problem with withdrawing assets from your pension fund is that doing so can greatly reduce your pension. An alternative to withdrawing assets is to use your pension fund as collateral against a mortgage.

In this setup, you do not actually withdraw your 2a assets, but simply pledge them as collateral against a bank loan. Instead of requiring a 20% down payment – as is customary – the bank may only require a 10% down payment (or none at all) depending on how much collateral your 2a savings provide.

The benefit of leaving your assets in a pension fund and simply pledging them is that your assets continue to earn interest at a relatively high rate and your pension is guaranteed. You also avoid paying tax on savings because you do not need to withdraw them.''


BenutzernameMoneyguru von moneyland.ch
OrtSchweiz
Status Expert
Registriert seit8/4/15
Beiträge3987

That refers to Pillar 2 pensions whereas CH Me is referring to Pillar 3.
I don’t believe the rules are the same for Pillar 3 as they are for Pillar 2 but I am not an expert.

P3 doesn't have this restriction.

Tom

As said, not an expert at all. So, link please?

Personal experience.

Tom

Lots of info on the internet explaining the difference between Pillar 2 and Pillar 3a

A vacation home or a second home cannot be financed with Pillar 3a assets. At least this is the case when making an early withdrawal.

I presume it is also applicable to pledged 3a accounts as in your case.


Here one source:

http://www.hypotheken-versteigerung....zug-saeule-3a/

Coming back to the original question about tax implications:
- if you are living in your home you pay income tax on the virtual rent (Eigenmietwert) which usually is significantly lower than the market rent cost
- if you are renting your home you pay income tax on the actual rent perceived

So all other things equal, living in your own home has likely a lower tax bill than renting out your home and then renting another home for the same amount of rent

Well unfortunately our bank is saying otherwise and now talking about a need to possibly refinance. We signed a fixed deal - can they decide this with still another 2 years to go? Thinking we came up on a report of clients who have too good a fixed deal with the bank

Cashing out our pledged Pillar 3a accounts is not in our plan and putting in 200k extra will be costing us ~1k a month in mortgage interest as money is offsetting the mortgage on our current home.

Swiss house value has increased by more than enough to cover this amount in 15+ years. Looking at refinancing now with a couple of banks that are happy to take us on.