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Old 15.04.2019, 20:54
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Using 3a for renovation

Hi All, I will, before anyone says, ask the bank as well, but you often get a more informed response here than at the bank.

I intend to withdraw my Pillar 3a for renovation of my property. I've got two questions if anyone knows the answers Im really grateful.

1. the money is in two pillar 3a accounts. Even though its one withdrawal every 5 years, I am assuming I can take the money out of both accounts as I would like to fully draw down ?

2. The money will be piled into renovation of the existing property, not value increase. I am assuming normal rules apply and this can then be used and submitted during that year as renovation expenses ?

thanks

Mike
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Old 15.04.2019, 22:02
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Re: Using 3a for renovation

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Hi All, I will, before anyone says, ask the bank as well, but you often get a more informed response here than at the bank.

I intend to withdraw my Pillar 3a for renovation of my property. I've got two questions if anyone knows the answers Im really grateful.

1. the money is in two pillar 3a accounts. Even though its one withdrawal every 5 years, I am assuming I can take the money out of both accounts as I would like to fully draw down ?

2. The money will be piled into renovation of the existing property, not value increase. I am assuming normal rules apply and this can then be used and submitted during that year as renovation expenses ?

thanks

Mike
You can use the money to pay off your mortgage, you can't just "withdraw it" as you say.


Wait 5-6 months, increase your mortgage back to where it was and the cash is yours to do what you want with, like buy me a beer
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Old 15.04.2019, 22:13
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Re: Using 3a for renovation

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You can use the money to pay off your mortgage, you can't just "withdraw it" as you say.
You can if you are 60+.

Tom
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Old 16.04.2019, 08:33
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Re: Using 3a for renovation

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You can if you are 60+.

Tom



Yes, quite, it's actually money that is saved for retirement, something that usually happens around 60 or 65 years old
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Old 18.04.2019, 14:40
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Re: Using 3a for renovation

Thanks for the input so far. So I don't want to go down the route of trying to change the mortgage amount as our mortgage is fixed so I spoke with the bank and I really am getting annoyed with them.

In their form for this it says "Copy de la confirmation d'octroi de credit par le creancier qui finance la transformation du logemont".

I am slightly lost here and the bank didnt really know either: are they expecting one single bill to cover all the works or they are expecting a single time when they pay all the invoices at once". the above makes me look at the former.

If thats the case, how on earth do people do this ? If you have a roofer and a kitchen fitter you're going to get two bills.

Has anyone been down this route and successfully managed to make this work ?
cheers
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Old 18.04.2019, 18:07
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Re: Using 3a for renovation

It looks like they want a copy of the contract for the building credit.

Generally speaking the owner usually has two different contracts. First there's the building credit for the final amount you intend to build for. AFAIA payout happens gradually as invoices come in and the work proceeds, usually the bank does and supervises that.

Once work is completed the construction credit is converted to a mortgage, that's the second contract. In your case however this is to be financed by the 3a withdrawal, which can happen only once every five years so (at least in theory) there's no gradual withdrawal even if you plan to withdraw from multiple accounts. So you probably need some form of intermediate financing to pay the builders as work progresses, and that is the building credit mentioned above.
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Old 18.04.2019, 19:24
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Re: Using 3a for renovation

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Thanks for the input so far. So I don't want to go down the route of trying to change the mortgage amount as our mortgage is fixed so I spoke with the bank and I really am getting annoyed with them.

In their form for this it says "Copy de la confirmation d'octroi de credit par le creancier qui finance la transformation du logemont".

I am slightly lost here and the bank didnt really know either: are they expecting one single bill to cover all the works or they are expecting a single time when they pay all the invoices at once". the above makes me look at the former.

If thats the case, how on earth do people do this ? If you have a roofer and a kitchen fitter you're going to get two bills.

Has anyone been down this route and successfully managed to make this work ?
cheers

You don0t need too !



Use your 3A to pay off, lets say Chf 100k tomorrow, wait 6 months increase the mortgage by Chf 100k and take the cash, it's fairly simple process and relatively well used....


As for various bills, the bank likes you to work with 1 guy (thus increasing the cost) and pay him who then pays the others.


Cash your 3A in, decrease your mortgage for 6 months, then go back and increase it, take the cash and pay the workmen how and when you want.
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