Hello experts , I own an apartment in Zurich and currently live there with my family.
I plan to buy a second apartment in Zug but move there towards the end of 2025, until then I would like to rent it to someone I know . My intention is to keep both properties until say 2040, therefore I will be want to rent out the Zurich apartment in late 2025 and move to Zug
Questions
My bank told me I can’t use my pillar2 since I won’t move immediately. I have intentions to move there though but only after some renovations are done which I expect to be done before end of 2025. How to convince the bank / authorities on this matter ?
The property market price is 815K but my bank valued it at 780K. The bank agrees for a deal of 780K, rest they ask me to pay directly from my pocket .The real estate wants me to however make the bank loan out 815K. Is this doable or does the real estate trying to play some dirty tricks ? Or maybe it’s possible to ask the bank to finance more ?
What are the tax burdens I need to know before I buy the second property? I understand imputed rental value which is added to my income . Now since I will rent one of the property at a later stage , how much tax burden can I anticipate? One of the reason I’m moving to Zug is to save on taxes and I just want to educate myself if the decision is worth it.
It seems there are already tenants living in the Zug apartment, do you know what is the rights a house owner has to ask the tenant to vacate since we will move in. It seems that the tenant is in the property only since October 2024.
This is a lifestyle question, in Zurich we live in a new construction, but the property in Zug is old . What kind of challenges one could potentially face when moving from new built apartment to an old one ?
Thanks in advance
do you mean buying a second home in Zug canton or second home in Switzerland overall. I know several NON EU friends who have a second home in Tessin or Valais.
There is a limit of 20% of 2nd homes per municipality. But it’s not a canton level issue. It’s municipal / gemeinde / commune. Some municipalities have reached that limit, others don’t.
This is a general overview in Switzerland, for more details it would be better to ask the municipality where the property is located.
I’m no expert but have been in a not dissimilar situation before, so I’ll have a stab.
No, you will not ‘convince’ them. You’re only allowed to use pension pots for a primary residence. Assuming you have a mortgage on your existing property then that one would have been declared as your primary residence, which affects other aspects of the mortgage as well, so no, you cannot have two at the same time. Having said that, when we bought our current house we had not yet sold the old apartment, but the bank was happy to lend based on it being our future primary residence. Difference being that we were moving in straight away, not at some proposed future date like you.
Up to you, if you want to pay more than the bank’s valuation. I would not. No, they’re very unlikely to lend you more than they think it’s worth. The only way might be to pay for a full independent survey and valuation, would cost you hundreds, at least.
If you’re actually renting the apartment out then the imputed rental value is irrelevant. That’s only a factor when you’re actually living there yourself. You will of course have to declare all the actual rent as income and pay tax on that accordingly. There are no specific additional taxes
Read their contract. When we bought our 6-apartment chalet most of the existing tenancy agreements were for a fixed term only with a specified end date, with or without automatic renewal by default, but none of them were such that we could not give them notice to leave as and when we needed to.
He writes that he has a C permit, and the spouse is naturalised. That angle should be an non-issue, also because the bank should have mentioned if it were.
OP:
Whether you use your pillar 2 on the Zürich or Zug apartment seems to be immaterial WRT the total downpayment you need. However your 2nd home is probably subject to a slightly higher interest rate, so leaving it applicable to Zürich after you’ve moved, if possible, seems advantageous. Further, the required downpayment for Zürich might increase from 20% to 30%, also because it’s now no longer your primary residence - this is just a guess, inquire.
You step into the rental contract in lieu of the seller and are equally bound. A term-limited contract is basically uncancellable as long as the rent is paid. An open ended contract often has a minimum duration of 1 or 2 years during which it’s also uncancellable.
Tax savings - how long is a piece of string? For a simplified calculation see the federal tax calculator.
This is the link to the relevant part of the cantonal website. According to this they have no quota for holiday/second homes. If in doubt, your best bet is to check with them/get your solicitor or bank to do so.
I see now, though, that in another post you have indeed said that your spouse is naturalised Swiss and that you have a C permit. They are very, very strict on the no second homes requirement here in Zug but it may be ok if you are buying to rent out. It will be interesting to hear the outcome. Good luck!
I think it’s also worth pursuing the “this will be my primary residence” approach. If you can show that you will not renew current rental contracts and convince them that you actually intend to move there officially, then you may be able to bypass any second home restrictions.
Thanks everyone for your inputs, I just spoke to an officer at Gemeinde steinhausen (property is in steinhausen) and they informed me that there is no rule that restricts anyone from buying a second property at least in steinhausen . I’ll also call authorities in Kanton Zug and enquire about this .
Some of you were discussing about nonEU permits and capital . I just want to be clear that at least in my case capital payment and swiss permit isn’t an issue. My bank already gave me a green light that I can afford this one (Finanzierungsnachweis)
I will pursue this opportunity and write my learnings here