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Old 24.10.2020, 12:42
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Re: If you rent two homes, where do you pay tax?

I assume you’ve ensured that your Russian ties will not pose a liability with Swiss banking laws and policies.

Edit: I agree with MC’s suggestion regarding Kt Zug. For low taxes and higher altitudes, check out the areas around Aegeri.

Last edited by olygirl; 24.10.2020 at 13:00.
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  #42  
Old 24.10.2020, 14:22
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You would need to formally move your residence there. Then it will work for that tax year.

But then what?

You move it back Jan 1st? And then back again?

Why not simply keep your main residence in the canton that is lower tax?

The Tax authorities have started asking maaaaaany more questions in the last 5 yrs or so. If they can prove your place of residence is actually the higher tax one, then they will tax you there.

The system is not made to be "optimized" as you are trying to do. For simplification they took Dec 31st as the cut off but the idea is not to move around each December to pay less tax. The idea is, if you move anyway, may as well do it before then if going to a lower tax canton.

K
I see. So they explicitely decided to discourage such movement in the last 5 years. OK, in that case I would have to hedge on finding the right place in the right tax band, without doubling.

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If your worry about living in one of the Höfe villages is simply the ability to put in air conditioning, I think you might be worrying overmuch.

You just have to look in the luxury housing category. (Tax optimisation at Höfe levels really only makes sense if you are in that financial category already.) You should be able to install air con (if it isn't there already) in a house or terraced flat in the high-end price ranges. Just make sure the firm you choose to do the installation is local and connected and will help you get any permits needed.

Simplify your life in the first years here... then once you understand how things work, make longer term decisions from a better informed stance.
Thank you. Yes, the air con is the main concern. I would also prefer a more rural setting, but I am willing to give on that for now.
It is very reasurring to hear that air con is an option. My first impression was that it's going to be an uphill battle to get air con, but if some of the places even have one installed, then it's amazing, and I should probably just look for such a place.
About waiting - yes you are right, this is why I am planning to rent for now. In the long term I can buy my own and do whatever I want, but first I prefer to spend a few years and learn the land so speak.

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Schwyz is a Kanton as well as a town (and Gemeinde). Freienbach is a Gemeinde of Kanton Schwyz, as are the mountainous options I mentioned Unteriberg and Oberiberg and Einsiedeln that Meloncollie mentioned.

When you talk about the tax differences being very profitable... I‘m going to make an assumption that an apartment in Freienbach is going to cost you CHF 2k a month. To save CHF 2k a month in tax between Oberiberg and Freienbach you need an income of c. CHF 600k pa (assuming single, no religion, no kids). That‘s to break even. To make it „very profitable“ I‘m assuming that you would need to make the same CHF 2k a month saving. That puts you into the earning over CHF 1m a year category.

2 points - 1) if you are making a million a year is all the hassle really worth it to save CHF 25k?
2) At that kind of income level it used to be possible to start talking to some of the more pragmatic tax offices about doing a deal on your taxes. I don‘t know if that is still possible, but surely your tax advisors would know. NB I‘m not talking about the kind of deal where you come as a foreigner and don‘t be economically active, but pay a multiple of your rental costs in taxes. I‘ve heard stories of well off Swiss business owners doing deals about where they live, but this was 10+ years ago, so may no longer be an option.
Well, I am married, and my wife has an income as well. Also, about Oberiberg specifically I mentioned that it starts to look break even for our household.
1) I try to invest rather than spend most of the income, neither of us were born rich, and we are a frugal family, so yes, 5 digits in franks a year are sums we care about.
2) I am not sure I understand you? This sounds like something dodgy that I wouldn't want to do? (I do not want to bribe anyone and such). Or do you mean there is an official path for tax adjustment? I am not sure I would qualify. We make nice living, but I doubt our income is so exceptional that I will get a la carte tax treatment. I bet there are plenty of people in Freienbach who are a lot more afluent.
Regardless, I will ask my tax advisor to understand this a bit more, thank you.

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I assume you’ve ensured that your Russian ties will not pose a liability with Swiss banking laws and policies.

Edit: I agree with MC’s suggestion regarding Kt Zug. For low taxes and higher altitudes, check out the areas around Aegeri.
I do not hold Russian citizenship, I hold an EU passport. It's just where I was born, and I do not actually have any ties there anymore.

Thank you regarding the suggestion.
I will check Aegeri.
It seems that my original question was based on a few miconceptions on my behalf, the primary one being the perceived difficulty of finding the right home where I can live peacefully without having to rent another.
I will adjust my search approach then.

Last edited by roegner; 24.10.2020 at 20:07. Reason: Merging consecutive posts
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  #43  
Old 24.10.2020, 14:32
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Re: If you rent two homes, where do you pay tax?

You can only be registered on one place in any case, so that's what counts, regardless of how many homes you own or rent.

Tom
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  #44  
Old 24.10.2020, 15:07
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Re: If you rent two homes, where do you pay tax?

I think you have got the right idea there ''I see. So they explicitely decided to discourage such movement in the last 5 years. OK, in that case I would have to hedge on finding the right place in the right tax band, without doubling.''


BTW, and it depends very much on your salary and fortune - but a reminder that generally, houses in low tax areas are normally much more expensive than those in higher tax area- so for some (but not for the very wealthy as you seem to be) - it balances out. When I read the figures stated by Melon, or pick up estate agent's brochures on the Riviera or some of the top ski resorts- I almost faint, or we both roll around laughing- and often for places packed so tightly on little land.
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  #45  
Old 24.10.2020, 18:45
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I see. So they explicitely decided to discourage such movement in the last 5 years. OK, in that case I would have to hedge on finding the right place in the right tax band, without doubling.
Where did you read this?

My post was very clear in saying
1) In the past 5 years there has been a tightening of checks
2) such movement was NEVER encouraged in the first place and no Swiss person moves every December to pay less tax!

Again, people choose where to live based on a number of criteria which are largely personal and tax is typically one of those factors. I am unclear who led you to believe we are all renting a studio in Schwyz where we move for Christmas go through all the paperwork, put our kids in different schools and then move back Jan 1st to save tax.

I mean really, what are you not understanding about the system?

K

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I think you have got the right idea there ''I see. So they explicitely decided to discourage such movement in the last 5 years. OK, in that case I would have to hedge on finding the right place in the right tax band, without doubling.''


BTW, and it depends very much on your salary and fortune - but a reminder that generally, houses in low tax areas are normally much more expensive than those in higher tax area- so for some (but not for the very wealthy as you seem to be) - it balances out. When I read the figures stated by Melon, or pick up estate agent's brochures on the Riviera or some of the top ski resorts- I almost faint, or we both roll around laughing- and often for places packed so tightly on little land.
Yes this and then you need a car or two which may well neutralise a good chunk of the saving. Look carefully at all criteria.

Last edited by roegner; 24.10.2020 at 20:08. Reason: Merging consecutive posts
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Old 24.10.2020, 20:09
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Re: If you rent two homes, where do you pay tax?

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BTW, and it depends very much on your salary and fortune - but a reminder that generally, houses in low tax areas are normally much more expensive than those in higher tax area- so for some (but not for the very wealthy as you seem to be) - it balances out.
To a point yes, but around lake Zurich the market seems to in general value property by distance from Zurich, meaning that the property in and around Freienbach tends to be cheaper than the equivalent in Zurich despite the tax rates.
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Again, people choose where to live based on a number of criteria which are largely personal and tax is typically one of those factors. I am unclear who led you to believe we are all renting a studio in Schwyz where we move for Christmas go through all the paperwork, put our kids in different schools and then move back Jan 1st to save tax.

I mean really, what are you not understanding about the system?

K
It does happen though, although I suspect people don’t go to the bother of ever actually moving there. Sadly, I know of people who have their registered address with friends who live in Höfe, but actually live in Zurich. I had someone ask if they could do the same at our place and I told him the price I’d charge him for taking such a risk was far more than any tax saving he’d make.
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  #47  
Old 24.10.2020, 20:10
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Re: If you rent two homes, where do you pay tax?

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Hi folk,

Following very helpful information from my previous questions, I have a more complicated one this time:

I understand that in Switzerland I pay taxes (for the whole year) in the place that I am resident in December.
Let us now assume that I rent 2 places. One where I live most of the year. And another where I live in December. Naturally the December one being in a very tax attractive region.
What would I need to do to satisfy the condition of being considered living in the second home in December? Let us assume that both my wife and I actually move there from the start of December and stay there, without visiting the first home during that month. Is that enough?
Assume that I actually work in a different unrelated municipality (I am on an EU B permit).

Cheers

Добрый вечер.

If you can arrange this with your employer: Make a company and become your own employee while your employer becomes a customer. This will give you a lot of flexibility in moving money around and optimize taxes but will come at a price as well (no unemployment insurance, no real help from government in case of covid lockdowns and business loss etc.)
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Old 24.10.2020, 20:25
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Re: If you rent two homes, where do you pay tax?

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To a point yes, but around lake Zurich the market seems to in general value property by distance from Zurich, meaning that the property in and around Freienbach tends to be cheaper than the equivalent in Zurich despite the tax rates.


It does happen though, although I suspect people don’t go to the bother of ever actually moving there. Sadly, I know of people who have their registered address with friends who live in Höfe, but actually live in Zurich. I had someone ask if they could do the same at our place and I told him the price I’d charge him for taking such a risk was far more than any tax saving he’d make.
Yeah ... this is exactly what I don't want to do. I never lie to tax authorities. There is a big difference between following the law and optimising to the letter while being honest, and tax dodging. I prefer to pay more, not lie, and sleep peacfully.

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Добрый вечер.

If you can arrange this with your employer: Make a company and become your own employee while your employer becomes a customer. This will give you a lot of flexibility in moving money around and optimize taxes but will come at a price as well (no unemployment insurance, no real help from government in case of covid lockdowns and business loss etc.)
Добрый вечер

While this is a good advise in general, and I have done so in the past, it's sadly not applicable in this case.
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