Is it worth buying a flat in Switzerland?

Steve678 · #1 18.11.2019, 19:27

Is it better to buy or rent? If you have have the cash to buy a flat, is it a better deal to buy rather than renting and keeping the cash invested?

fatmanfilms · #2 18.11.2019, 19:32

	Quote:	Steve678
	Is it better to buy or rent? If you have have the cash to buy a flat, is it a better deal to buy rather than renting and keeping the cash invested?

Depends what else you invest in, I personally don't like illiquid investments but my wife wants a bigger place, so against my better judgement....... Happy wife means a happy life

3Wishes · #3 18.11.2019, 19:39

Some previous threads where different views are presented:

What's your expats opinion on buying vs renting

buying Vs renting

renting vs buying - what would you do?

#4 18.11.2019, 19:55

	Quote:	3Wishes
	Some previous threads where different views are presented: What's your expats opinion on buying vs renting buying Vs renting renting vs buying - what would you do?

FMF frightened of his wife, obviously !!

fatmanfilms · #5 18.11.2019, 20:03

	Quote:
	FMF frightened of his wife, obviously !!

Her demands have become more reasonable since I suggested the budget was unlimited so long as she contributed 50%

She has had her first double with Fundsmith so gets where I am coming from

Troublawesome · #6 18.11.2019, 20:33

No.

Phil_MCR · #7 18.11.2019, 20:52

	Quote:	Steve678
	Is it better to buy or rent? If you have have the cash to buy a flat, is it a better deal to buy rather than renting and keeping the cash invested?

Is it worth it?

Financially: no

Quiet life with wife: yes

#8 18.11.2019, 21:00

	Quote:	fatmanfilms
	Her demands have become more reasonable since I suggested the budget was unlimited so long as she contributed 50% She has had her first double with Fundsmith so gets where I am coming from

Ah....so you'll be camping then

#9 18.11.2019, 21:06

	Quote:	fatmanfilms
	Depends what else you invest in, I personally don't like illiquid investments but my wife wants a bigger place, so against my better judgement....... Happy wife means a happy wife

I think the caveat is where will you "invest" your funds... In Switzerland, with low interests rates, not the best option. That said, depending on how much you pay in rent and how long you expect to live in Switzerland, it could be a good bet/punt to buy. In short, you need to do the research regarding tax savings in terms of purchase versus renting and investing funds (I would assume outside of Switzerland).

Hard to measure as I don't know your particulars. Look at comparis.com as a guide.

Hope this helps!

omtatsat · #10 19.11.2019, 08:33

	Quote:	Steve678
	Is it better to buy or rent? If you have have the cash to buy a flat, is it a better deal to buy rather than renting and keeping the cash invested?

Best to buy and get a bank morgage. The idea is to never pay it off completely otherwise the tax man hits you hard. Its a shit system here.

Medea Fleecestealer · #11 19.11.2019, 08:37

Bank may not been keen on the idea of renting out/airbnb either so check that before making any purchase.

fatmanfilms · #12 19.11.2019, 08:43

	Quote:	Medea Fleecestealer
	Bank may not been keen on the idea of renting out/airbnb either so check that before making any purchase.

They will want a far higher deposit & probably higher interest rate as its a commercial loan & not a residential loan for your main residence.

AbFab · #13 19.11.2019, 08:51

YES!

It may not suit everybody, but buying my own home was the best financial move I made in my life. I cannot imagine renting and paying out 10s of 1000s a year when I can live in my own home for interest rates around 1%.

Contrary Omtatsat‘s usual ill-informed comment it is an excellent system. Today approx CHF830 per month, or less, will get you CHF1million mortgage on a home and asset that will appreciate - with renting all that goes up is the rent...

omtatsat · #14 19.11.2019, 09:09

	Quote:	AbFab
	YES! It may not suit everybody, but buying my own home was the best financial move I made in my life. I cannot imagine renting and paying out 10s of 1000s a year when I can live in my own home for interest rates around 1%. Contrary Omtatsat‘s usual ill-informed comment it is an excellent system. Today approx CHF830 per month, or less, will get you CHF1million mortgage on a home and asset that will appreciate - with renting all that goes up is the rent...

You never get the feeling you own a house here when its more or less the bank that owns it.

Karl · #15 19.11.2019, 09:39

One of the biggest benefits of buying is that afterwards it ceases to be a perpetual topic of debate.

memihai · #16 19.11.2019, 10:09

And you finally have something to paint the walls every couple of years, to bricolate, to drill holes in walls, to tune to your needs

AbFab · #17 19.11.2019, 10:11

	Quote:	omtatsat
	You never get the feeling you own a house here when its more or less the bank that owns it.

If you have never done it, how do you know how it feels??

I have had a mortgage in one form or another since 1971 and have NEVER felt that the bank/building society or whatever owned my property.

You mean if you lease a car, which can be a far greater commitment in loan percentage than a mortgage, you feel the car is owned by the credit company??

#18 19.11.2019, 10:15

	Quote:	omtatsat
	Best to buy and get a bank morgage. The idea is to never pay it off completely otherwise the tax man hits you hard. Its a shit system here.

No. You get hit for the tax charge whether you pay the mortgage off or not. It's your decision - if you find paying the bank CHF 100 (or whatever) in interest is worth it to save maybe CHF 25 in tax then that's your choice.

#19 19.11.2019, 10:52

OP, since you specifically mention buying a flat (therefore in a development of >1 apartments) then there are additional expenses to think of - you'll probably have to contribute to a communal fund for repairs as well as communal maintenance, lighting, car park cleaning etc etc.

Whilst it is almost certainly still going to work out better than renting, outlay wise, you should probably factor all of that in to see if the difference is worth committing a large chunk of capital towards. Also, make sure the building rules aren't too stringent (or are!) so you don't just feel like you've spent a load of money to be a renter again.

DanLF · #20 19.11.2019, 11:06

	Quote:
	No. You get hit for the tax charge whether you pay the mortgage off or not. It's your decision - if you find paying the bank CHF 100 (or whatever) in interest is worth it to save maybe CHF 25 in tax then that's your choice.

I've been told the opposite, many times.

The interest you pay is based on the size of your mortgage, which should decrease as you pay it off, correct? The tax you pay is based on the value of the property I'd assume, and this is unlikely to decrease.

So if I'm correct with both of my previous statements, isn't there a cross over point where paying the interest on the mortgage becomes less than the tax?

Or are you certain that this is universally not going to happen, no matter the value of the property?