I had a Swiss friend in Horg who sold his house then rented somewhere and enjoyed spending the proceeds.
Of course, there is the risk that you spend all your money before you die, he was just over 90 at death and still spending.
The only reason to do that would really be if you thought that you would be unable to carry your mortgage after you retired.
If you have sufficient income/assets to manage your mortgage after you retire, why pay the mortgage down and give up the tax benefit of being able to deduct the mortgage amount from your assets? That is until the Government decide they will remove that benefit also for house owners…
Likely 100% to save 20%, so the cost is 5 times the tax saving. Hardly a bargain
Tax deductions for interest payments is going away anyway, so this has an end date anyway.
2026 tax year at the earliest. Maintenance and Mortgage deductions disappear but so does imputed rent. I calculate that we will benefit as our actual mortgage is low and our imputed rent is above average. But others with large mortgages may be harmed.
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Is it really going to change? It seems like one of those topics that is always discussed but never happens.
Yes it will happen. Change is slow here, but that is one of the things I like best about Switzerland.
is this final or still open to further discussion? I was following the news, but each time there was a rumor in reality it was unfinished, open for next voting round
ok, seems final
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If anything, the deduction, was an additional reason that property prices have been so high and promoted Switzerland to be a nation always in debt. Actually this is bad news for the banks in that now there will be incentive to pay debt off. However, I assume the debt deduction for wealth will still be around?
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In general yes, but looking at longer time frame I think there’s an actual incentive to buy without this tax (and deductions) than with it. However I’d expect price correction for old properties. It was really ridiculous that flats tend to cost the same here despite the age and development standard
The main influential factor is low supply and high demand
“At the earliest” suggests it is not final and still open to further discussion.
Demand is the ability to pay, not desire to buy. Interest rates have been very low for 15 years, people now believe sub 1% is normal, this may not continue indefinitely
Oh! really?
In the Swiss market the numbers wanting to buy far exceeds the numbers that are able to. The primary problem is the upfront 20%.
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5 times gearing, does not sound particularly onerous particularly as you can use you pension fund so only need to come up with 10% yourself.
If you have any equity in your pension. Not everyone does, I can tell you we didn’t when we bought.
So you bought immediately you arrived?
Actually within a week of getting our Permis Cs. In those days we couldn’t buy above a certain size with a B.
Up until the Swiss signed for free movement you could only buy with a C, since free movement you can buy anything with a C but a non resident buying a holiday home is limited to 200m2.
After 5 years residence there should have been money available in your 3rd pillar to use towards your deposit.