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  #21  
Old 13.05.2008, 22:46
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Re: House buying

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ETA: Also, make sure you are figuring Eigenmeitwert (the theoretical rental value of your house, which is then added to your income, and upon which you will pay income tax) into your total cost calculation.
Thanks for the reply. Wow - this is news to me. You're telling me that even though you are paying a mortgage, and living in the house, they tax you on income you would have earned if you had the house rented out? That seems bizarre. Does this apply to all Cantons?

cheers,

Moe
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  #22  
Old 13.05.2008, 23:53
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Re: House buying

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You're telling me that even though you are paying a mortgage, and living in the house, they tax you on income you would have earned if you had the house rented out? That seems bizarre. Does this apply to all Cantons?
I believe that Eigenmietwert applies in all cantons...

Eigenmietwert was introduced as a way to level the playing field between renters and owners - it was seen as 'unfair' that homeowners were able to deduct mortgage interest, etc., something not available to renters. (Remember, something like 70% of the Swiss population rent - homeownership is not necessarily viewed as it is in other countries.)

The Eigenmietwert assessed on the house you are interested in buying should be a matter of public record - ask at the Gemeinde tax office. Also ask if there has recently been a revaluation; ours was reassessed last year, and increased something like 15%.

However, we still find owning a better financial choice than renting, all things considered.

But - we moved over here at a time when the rental market was even tighter than today, speaking no German at all, with little understanding of how things worked here, and needed a house ASAP with garden for our dogs. Not an easy thing to find; we ended up having to pay silly money to rent something halfway suitable.

In contrast, we bought our house at a time when interest rates were quite low, in a canton and Gemeinde with very low tax rates. Even with the Eigenmietwert added in, our total Swiss tax burden living in SZ is about 40% less than what we were paying in Kt. ZH.

You really have to look at the entire picture, not just rent vs mortgage but also the tax rates of the town/canton you are considering. And do be aware that in the past Swiss real estate has appreciated slowly - you also need to ask yourself if this is a sensible investment for both the short and long term, given your individual situation.

Last but certainly not least - I hated renting, felt like I was living in a fishbowl, being watched by the landlord all the time. For me, the decision to buy was mostly based on personal preference.
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  #23  
Old 14.05.2008, 09:48
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Re: House buying

This is all very intresting. What is the case if you own a house and are retired i.e. no other income apart from investments. What taxes will you pay.
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  #24  
Old 14.05.2008, 12:26
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Re: House buying

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I believe that Eigenmietwert applies in all cantons...

Eigenmietwert was introduced as a way to level the playing field between renters and owners - it was seen as 'unfair' that homeowners were able to deduct mortgage interest, etc., something not available to renters. (Remember, something like 70% of the Swiss population rent - homeownership is not necessarily viewed as it is in other countries.)

The Eigenmietwert assessed on the house you are interested in buying should be a matter of public record - ask at the Gemeinde tax office. Also ask if there has recently been a revaluation; ours was reassessed last year, and increased something like 15%.

However, we still find owning a better financial choice than renting, all things considered.
Thanks for the reply. In the context of interest being tax deductible I suppose the Eigenmietwert is 'fair.' We are not intending on rushing in to purchasing, but for similar reasons to you we are considering buying. We have small children and are used to living in our own house, so going back to renting, and possibly an apartment is a little daunting. If we move, it will be for a reasonable amount of time (at least 3 years, although that isn't that long!). Any other tips for surprise expenses (insurance!?).

Does anyone know of an all encompassing tax calculator (eg. MS Excel model) that outlines the tax you can expect to pay?

cheers,

Moe
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Old 14.05.2008, 12:43
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Re: House buying

There are mortgage calculators on most of the big bank sites.

The Eigenmietwert is actually a figure based on the theoretical rentable value of the house. They calculate this and you will be assessed on a percentage - for me IIRC it is 35% and works out nice and low.

You will need building insurance and then contents/theft insurance. Also ensure you're covered for any large glass doors and also for any costs where they might have to dig into the ground to fix water breaks.

The mortgage issuer will advise you to have 10% on top of the repayments available for incidental costs - which should be ok in a house but do consider shared properties might have higher costs for communal areas.

Your street might be private and you are responsible for the maintenance there too - so if the road's busted up, you'll have a little association there with a fund who look after things.

Last but not least - subscribe to Rights Protection (Rechtschutz in the German-speaking area). This entitles you to legal coverage should you have a run-in with your neighbours. I believe it is very worth it
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  #26  
Old 14.05.2008, 15:02
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Re: House buying

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Last but not least - subscribe to Rights Protection (Rechtschutz in the German-speaking area). This entitles you to legal coverage should you have a run-in with your neighbours. I believe it is very worth it
I totally agree with you on this. Legal issues with neighbours are very common.
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  #27  
Old 07.12.2010, 14:31
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Re: House buying

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Buying the house is everyone dreams.

I beg to differ. Buying a house is not a guarentee of investment. It also lends itself to far more upkeep work than an apartment. I have several friends who do not want to own a house. Indeed, one of my friends have sold their after 2 years to go back to an apartment, as it's easier to manage. One might also argue that it "ties you down" somewhat, although I lean less toward this argument.
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  #28  
Old 07.12.2010, 14:41
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Re: House buying

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I beg to differ. Buying a house is not a guarentee of investment. It also lends itself to far more upkeep work than an apartment. I have several friends who do not want to own a house. Indeed, one of my friends have sold their after 2 years to go back to an apartment, as it's easier to manage. One might also argue that it "ties you down" somewhat, although I lean less toward this argument.
Overall buying is better than renting. There are a couple of key decisions one has to make though before getting into this.
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  #29  
Old 07.12.2010, 15:28
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Re: House buying

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I beg to differ. Buying a house is not a guarentee of investment. It also lends itself to far more upkeep work than an apartment. I have several friends who do not want to own a house. Indeed, one of my friends have sold their after 2 years to go back to an apartment, as it's easier to manage. One might also argue that it "ties you down" somewhat, although I lean less toward this argument.
This is very true. A while back I read a report about Europe and how high house ownership was parallel to high unemployment. The countries with the most house ownership had the highest unemployment. If you own a house you can't move to where the jobs are.


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Overall buying is better than renting. There are a couple of key decisions one has to make though before getting into this.
This is not true. I think we've seen that recently.
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