Family member signing over house. Implications?

Finance, Taxes, Banking, Insurance and Retirement
1
My in laws are downsizing and selling their house, buying a flat outright in the same canton as us. They are also re-writing their will. At the moment it stands that when one dies, 50% stays with the surviving parent and 50% comes to my husband. The notary has asked if they really want to do this and the suggestion has been made that they sign (gift) the new flat to my husband now. There would then be a "rental contract" between us in which they agree to cover all the running costs of the flat.

At the moment we barely have any savings, just a large mortgage and we're unsure how this would affect us tax wise as we would suddenly have far more assets on paper. We'd then be liable for the Eigenmietwert and would also possess taxable assets in positive rather than negative figures.

Is this a sensible thing (for them and us) to do? Is there anything else we need to consider - would it count as a second home even if we never spend time there?

2
If you aren't living there and set it up properly you shouldn't be liable for any Eigenmietwert, only the actual rental paid by your in-laws. I guess the benefit is that they are also not liable for Eigenmietwert as they are renting.

You would be liable for the wealth tax, and without a mortgage that could also be inefficient.

So it sounds like some decent financial advice to make sure any setup is OK for the authorities, with someone who can plug all this into a calculation, would be a good idea.

3

Wouldn’t giving one’s apartment also have implications if one or both of the in laws went in a nursing home ?

https://www.vd.ch/themes/sante-soins…-medico-social

https://www.fondation-clemence.ch/wp…1/memento5.pdf

4
the sensible thing would be to ask the adviser why he recommends that course of action, what the advantages are and what are the downsides/implications.

5
I think the idea is the in laws wouldn't pay us anything in terms of rent, they've bought it. They would cover the utilities and the costs to the funds of the apartment block. Or any repairs and or building work that might need to be done.

So if they aren't liable for Eigenmietwert, and we also wouldn't be, yet we wouldn't get any actual rent so that wouldn't be taxable either.... it sounds too good be to true or allowed!

Is this something the bank can advise on or do we need to find an independent financial advisor? Whilst it's a lot for us it's probably peanuts to what most financial advisors see here!

6
My father in law claims not and that they have sufficient funds to cover and nursing needs. Not knowing how much money they actually have, I've no idea if this is wishful thinking or not.

7

If the monetary costs borne by the parents are deemed to low and accordingly, the “rental agreement” considered to be tax evasion, you might still end up paying Eigenmietwert (an old article here https://meng-partner.ch/wp-content/u…mietzinsen.pdf , there might be newer case law, and your mileage may vary depending on the Canton: https://www.hugosteiner.ch/das-sollt…n%20versteuern .

8
My initial reaction was ok, but they would have to cover the increase in our tax bill (because, quite frankly, we can't). But that will then be counted as income to us, which presumably we would again be taxed on?

9

I think you need some independent professional advice.
Gifting to save inheritance tax has to be done well in advance and there are yearly limits. You will have to declare the gift.

https://www.rsm.global/switzerland/e…302%20million .

The other implications may be very complicated.

10
And varies by Canton. Get professional advice.