I am completely lost over this and feeling sick. I have until tomorrow to object.
I declared my English property on my Swiss tax. Now the tax return has come back with something called Repartitionswert nach BdBSt applied to my Swiss home (my only home). They have revalued it at 145%. Why?
This is how they incorporate the value of your English property for the wealth tax calculation. The combined UK and Swiss property value is declared as a percentage of the Swiss property (even within Switzerland, if you own property in another canton, it's done like this).
Now whether or not the 145% is an accurate representation of the combined property values is something is something you have to decide. If not, then that's what you need to challenge.
Thank you, but I still do not understand.
So, if my Swiss house is worth 100k (according the Gemeinde) and my English house worth 100k,
Then the tax value is now 290,000?
Which is likely below the level where wealth tax kicks in. And when it does it's nearly nothing...
So your Swiss property is now valued at 145%... of what? The value at 100% is usually way lower than the real market value of your house (for example, the tax valuation of my house is less than one quarter of its actual sales value). Debts reduce your total taxable assets, but at 100% of the real value of your debt, so often you end up with negative assets in the eyes of the tax office and therefore no wealth tax to pay (no, they don't pay YOU if you have negative assessed wealth! )
So the inclusion of your UK property may well have no impact on your tax payable, which is very low anyway (around 0.7%, canton-dependent -- i.e. CHF 700 per CHF 100,000 of net assessed assets). Don't stress too much about it.
Say your CH property is really worth CHF 1 million and you have a loan of CHF 800,000 on it. The tax authorities here value your property (for tax purposes) at, say, CHF 500,000 (very high, for many cantons). They gross this up to 145% to take your UK property into account, so now they want to tax CHF 725,00. But you owe CHF 800,000, so your net property assets are CHF 75,000 in the red, as far as the taxman is concerned. No wealth tax to pay on your property and nothing to feel sick about.
By the way, any negative wealth re. property offsets other assets you own (reducing or totally nullifying any wealth tax you may have to pay), but can't be carried forward to following years' tax returns.
It is not nearly nothing, that is the problem. The value has been turned into income and it has raised my income by one third.
The taxable value of my house is the real value. Well it was, now it is way over.
Rental income from your UK property is not taxable in CH. The 145% thing applies only to wealth tax, and that (as I explained above) may well be nearly (or actually) nothing.
Do you want to share actual figures so we can work it out? (Or you can call your tax office tomorrow and they will do this for you.)
Another by the way: if you have a mortgage on your English property, that debt also reduces your total asset value.
Is the Swiss tax office not interested in actual or theoretical rent on the foreign property?
They're interested in actual rent on foreign properties, only in order to calculate the rate of income tax payable on Swiss income. And theoretical/imputed rent on foreign properties plays no role whatsoever in Swiss income tax.
Another by the way. If you live in Wallis, the wealth tax rates are lower than the 0.7% I mentioned before -- probably around half that level, depending on the asset value being taxed. Another reason to smile.
On my 2014 tax I did not include the UK house. It was inherited and I told the tax office by way of a note on my tax form, that it was not rented but will be for 2015. I said it had a value about 100k.
The tax office has re-done my tax and almost every number has altered.
They have set the taxable value of the UK house at 100k and put the income as 5'760.
The Repartitionswert is calculated when a Swiss taxpayer owns property in more than one canton or country. Since cantonal tax authorities use different methods to assess the value of property, the Repartitionswert is calculated for each property so that they are comparable to distribute mortgage debt, etc. The standard factor for Wallis is 145% to arrive at its Repartitionswert for the comparison and distribution. If the tax value of your Wallis propert is CHF 100'000, you will still pay a capital tax based on CHF 100'000 (and not CHF 145'000).
This article with examples may be helpful to understand the concept:
Thank you, that helps. It is worse that I imagined.
I need to formulate the questions for my appeal.
My Wallis house has a taxable value of 100k now valued on redistrib. at 145k
My UK house as a taxable value of 100k now valued redistrib. at 100k
So they value everything at 245 (I made a mistake earlier when I said 290).
My mortgage in Wallis is 80k.
So my taxable value is set 245 which is not the truth.
And I am told my UK house income is 5 K when the truth is zero.
I cannot tell you about Wallis, Google will. For my commune in canton Zurich wealth tax on CHF1,000,000 is .845 per mille and thus CHF845.-...
See the online tax calculator:
>>>>The standard factor for Wallis is 145% to arrive at its Repartitionswert for the comparison and distribution. If the tax value of your Wallis propert is CHF 100'000, you will still pay a capital tax based on CHF 100'000 (and not CHF 145'000).
I can't see this. In the row "Total Aktiven" the value is given as 145% and then all further sums taken from this amount.
Are you saying this is not correct?
I guess the 5,760 is the notional rental income ( Eigenmietwert in German). This is included as part of the taxable income here (with mortgage interest & other deductions reducing it) for homeowners here. As you don't have actual UK rental income, they're incorporating this notional rent here.
It would probably be best for you to meet with someone in the tax authorities so they can explain how they came up with the figures and how it impacts your taxes, as it's difficult to comment accurately on it here without having the full picture. They're usually very helpful.
AbFab
So, if your Steuerbares Vermögen is 1 million, what was the actual value that got you to the Steuerbares Vermögen of 1 million.
My problem is that my Steuerbares Vermögen is too high and I need to know if the calculation that got my taxman there can be questioned.
Also,
How would I argue that the taxable value of the UK house should be lower? How does one work out a taxable value?
It's not mine!
Ones wealth (Vermoegen) is calculated on what info you supply on your tax return. Savings, investments, bank accounts, car, house (less mortgage), cash in your pocket.
It is clear this is fairly loosely calculated. I once declared a house I owned at the time in the UK on the Swiss tax form - with the rental income all declared on the UK tax return.
I was too honest and put the market value. I went to see the tax office in Zurich and they said I could put in half the value I had given it!
Before you get into a sweat about it I would find out what the rate of wealth tax in in your canton...
Thank you all for the answers. I am building up an idea of where to go with this.
Just to be clear, I am not worried about wealth tax. I am worried about how the perceived increase in my income takes me over a threshold. This means no more support for music lessons which means all the children having to give up music lessons.
If only it was all about wealth tax.....
I also see that whereas I put in my Schuldzinsen as 'X
The tax man has used a new form and entered it as "Schuldzinsen (2./3. der Aktiven)" so he has now effectively lowered my mortgage on paper when that is not the reality.