If we decided to keep our house here after we leave Switzerland, how do taxes work?
We'd need to pay Eigenmietwert of course. But we'd no longer be tax resident, so there is no Swiss income to add the theoretical value to. How is Eigenmietwert calculated for non-resident property owners?
Are there any other Swiss taxes that a non-resident property owner would owe?
(Herr Google seems not to be my friend today, apologies if I have missed the obvious.)
Many thanks.
If you have a mortgage, the interest may be (partially) deductible. In a case of residence in Germany: your Swiss real estate represents a share of your wealth, the same share of your worldwide interest payments is deductible. Residence in other countries may differ (probably will).
Expect the details to be complex. You'll probably want to use the services of a consultant, at least for the first year or two.
Tom
I will have definitively left Switzerland, turned in the permit and de-registered. No income, no bank accounts, no investments, no assets in Switzerland other than the house. All assets other than the house will have been moved to the US.
So (broadly speaking) I would pay Swiss tax on the Eigenmietwert. The income used to calculate the tax rate would essentially end up being whatever the assigned Eigenmietwert is, as that would be my only Swiss income.
However, retaining my house in Switzerland would open me up to continue paying wealth tax on my worldwide assets.
Have I got that right?
Hmmm... being on the hook for Swiss wealth tax while resident in the US could be a game changer.
Thanks, one and all.
Jos
Keep in mind that the tax rate isn't linear, additional income will lift your tax bracket and thus tax rate. The latter is progressive up to something like 250k taxable income, the Wegleitung (the booklet you get [used to get] along with the form) contains tables for the cantonal and federal rates on the last pages showing that.
I haven't seen wealth tax mentioned, that's just something I think is worth mentioning so it doesn't get overlooked. It's possible that this doesn't get mentioned because none is levied, though I doubt that, I'd expect your house value to get taxed similar to the Eigenmietwert, your Swiss house/real estate but not your entire wealth. Wealth tax is progressive as well. A (Swiss) tax planner will know.
ETA:
A tax planner or the tax office. IME they'll inform you about the principles, which is where you're at now, just not on how to lower your tax burden.
You could rent it out and hire a property management company.
Keeping the house could solve some issues, but it looks like it could create several others.
Lots to think about...
I self-correct myself after some reading.
Law 642.11 on imposition applies here, and at Art. 4 there are listed some cases of Swiss imposition on people living abroad:
https://www.fedlex.admin.ch/eli/cc/1…4_1184_1184/de
Agreements against double taxations can change this, however by reading the Agreement with Italy I found that the clause is explicitly confirmed in two different articles. Moreover, the Agreement regulates how the property can be taxed by the other state - avoiding the double imposition does not mean that the property will not be declared in one of the two states, which was my wrong assumption when I first replied.
So I would vote for kirstenschmitz’s suggestion of checking the exact Agreement with country of destination.
For Italy, all the cases are explicitly listed in the Agreement, with a clause that all that are not explicitly mentioned will be taxed only in the country of fiscal residence. So the Agreement with your country (if there is one) should contain the full list.
Bank called our mortgage due at the end of the month when we updated our address but were open to fixing for a few years. We became Swiss but no difference. Could have been worse when we were abroad with mail forwarding that takes weeks. We'll have to pay the mortgage back or remortgage soon. Then wealth taxes will kick in if there is no mortgage that basically doubles our yearly tax amount.
Bank also wanted exchange of information papers signed to where we were moving to. We have assets elsewhere but told them they were none of their business and we declare them where we are domiciled.
With tax treaties between countries, you can claim tax paid in CH as an offset but not the whole amount in some countries. We have a much bigger tax bill abroad from the rental income than the Swiss one! No wealth taxes but we'll be charged capital gains taxes from the date we became resident when we sell.
Having to potentially deal with tax authorities if we decide to leave Switzerland is one of the main reasons I am opting against buying any property in Switzerland...
“A limited tax liability arises in the canton of domicile in the case of private ownership, whereby the entire world income and assets must continue to be declared annually in order to fulfill this obligation or to determine the relevant tax rate.”
So you'd take your worldwide income/wealth, determine the tax rates and apply it to your Eigenmietwert / property value to determine the taxes due
Here's my line of thought:
Bob owns a flat worth 1 million CHF in Zurich but lives in California and makes 10 million USD income. He has 10 million in savings.
His neighbor Jane on the same floor also has a flat worth 1 million CHF, but she lives in London and makes 2 million GBP and has savings of 2 million GBP.
You're saying that for the same flat, Bob has to pay more Eigenemietwert than Jane. The supposed rental value for the same flat depends on how wealthy the owner is?