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Old 23.03.2017, 00:57
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Additional costs for a family house

I read an article at:
https://www.hausinfo.ch/de/home/fina...ilienhaus.html

Where it estimates the annual costs to own a family house:

----------------------------------------------------------
Kaufpreis des Einfamilienhauses 1'000'000 Franken

Versicherungsprämien 1'000 Franken
Abgaben 1'250 Franken
Betriebskosten 3'500 Franken
Reparaturen und Unterhalt 2'750 Franken
Garten- und Umgebungspflege 1'500 Franken
----------------------------------------------------------

I would like to ask if that's a reasonable estimation? Is it common/required to have insurance for a house? And that Abgaben means wealth tax? Isn't that calculated by net worth, so the house value should deduct mortgage, and the "Amtlicher Steuerwert" is usually lower than the real value? Also if you don't put the money to the house, it's still part of the wealth tax isn't it?

If I'm looking for the "extra costs" compared to renting a flat, what is a better estimation?
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Old 23.03.2017, 07:13
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Re: Additional costs for a family house

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I read an article at:
https://www.hausinfo.ch/de/home/fina...ilienhaus.html

Where it estimates the annual costs to own a family house:

----------------------------------------------------------
Kaufpreis des Einfamilienhauses 1'000'000 Franken

Versicherungsprämien 1'000 Franken
Abgaben 1'250 Franken
Betriebskosten 3'500 Franken
Reparaturen und Unterhalt 2'750 Franken
Garten- und Umgebungspflege 1'500 Franken
----------------------------------------------------------

I would like to ask if that's a reasonable estimation? Is it common/required to have insurance for a house? And that Abgaben means wealth tax? Isn't that calculated by net worth, so the house value should deduct mortgage, and the "Amtlicher Steuerwert" is usually lower than the real value? Also if you don't put the money to the house, it's still part of the wealth tax isn't it?

If I'm looking for the "extra costs" compared to renting a flat, what is a better estimation?
If you intend to skip insurance for your house to save money, better not buy.

The costs seem reasonable although you can skip the Gartenpflege by doing it yourself. Unterhaltskosten really depends on how old your house is. I am replacing the oil heating/boiler and that costs slightly more than what is calculated for Reparaturen (but then it is not a Reparatur )
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Old 23.03.2017, 07:54
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Re: Additional costs for a family house

You ask "and that Abgaben means wealth tax?" If you read the article you quoted you will see:
"Abgaben für Wasser und Abwasser sowie die Kehrricht- und Grünabfuhr.". Not taxes, but costs for water, sewerage and rubbish/garden waste collection.

You ask "Is it common/required to have insurance for a house? "
It is mandatory to have a basic level of insurance, arranged through you Kantonal insurer (e.g. http://www.gvz.ch/). This only includes a standard level of cover for specific risks, so it is usual (but not mandatory) then to arrange supplementary gebaüdeversicherung (buildings) insurance through a commercial insurer. For this you can select from very basic to very comprehensive cover. Consider how you would continue to pay your 1m mortgage if your house became uninhabitable and unsellable through some non-insured event ? Consider how you would pay the 1-10m damages awarded by a court to someone who seriously injured themselves whilst in your property (although, probably comes under Haftplicht below) ? Consider whether you have reserves to pay 10% (minimum 50k) of the rebuild cost following an earthquake. Of course, you also should consider the risks of these actually happening - but ultimately, it's your call.

Also on insurance, is the house contents insurance (Hausrat) and personal liability insurance (haftpflicht). Again optional, but very common.

Regarding wealth tax, typically a house is beneficial in that respect, as the taxable value of the house is I believe around 70% of the market price (can vary when they are reassessed). So you payout 200,000 (deposit) (wealth is reduced), take on 800,000 debt (wealth is reduced) and gain a 700,000 (taxable value) asset. Your wealth is seen as 300,000 lower. Although wealth tax rates are pretty low, so the benefit of this is likely not that great.

The 'eigenmietwert' (tax on ownership instead of renting) is an income tax and is effectively a value added to your income on which you will pay income tax. The value on a small house is probably in the 10k - 25k range (calculated from the taxable value of the house). As this value is effectively added to your income, it can raise your top marginal rate and you are taxed at that rate on this value (i.e. somewhere between 10% of 10k and 35% of 25k, depending on your income and value of the house).

Regarding affordability, you need to consider this not only from a personal perspective, but from the bank perspective (who will use 5% as an interest rate). Your link shows the calculation similar to the one the bank would use, requiring an income of 168k per year to 'afford' a 1m house with 800k mortgage.
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Old 23.03.2017, 08:57
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Re: Additional costs for a family house

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It is mandatory to have a basic level of insurance, arranged through you Kantonal insurer.
Only in some cantons.

Tom
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Old 23.03.2017, 10:10
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Re: Additional costs for a family house

One of the extras a homeowner must be prepared for that a renter does not face: The unexpected.

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Reparaturen und Unterhalt 2'750 Franken
While this might be an average (although IME too low) repair cost over the 40 some years you may own your home, you need to be prepared for large lump sum outgoings at any one time. Necessary repairs, usually not covered by insurance, crop up when least expected and often cannot wait. A homeowner needs a healthy cash (or easily liquidated) cushion at all times.

How much is healthy? That will depend on the age of your home and it's various systems.

To give you an example, our home was 15 years old when we bought it. In the first five years we put in some 10% of the purchase price again towards the unexpected. (That 10% did not include the very extensive (and expensive!) renovations that we had already planned into the purchase calculation.)

Expenses like replacing the perfectly working furnace due to a cantonal mandate, an unexpected short turned into a complicated rewiring project, a hitherto unknown plumbing problem brought to light only during the planned installation of a new bathroom, water heater unexpectedly dying, neighbors demanding communal financing of projects you might not want or need... the list goes on. Things happen, and they often all happen at the same time. Hence the need for a large cushion from the start.

You can mitigate some of this if you are handy at DIY. And there might be some tax relief. But you need the cash, on hand, in order to get the necessary work done.
In my area a plumber won't even cross your threshold for under a thousand; that cushion is key.
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Old 23.03.2017, 10:26
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Re: Additional costs for a family house

There is no wealth tax on property - you already have the wealth and put that along with a mortgage, the opposite of wealth, into a property. Thus buying does not increase your wealth...
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