Thank you. Does that still account as owning a property and thus, being under obligation to return income tax - providing that the other conditions are not met (B permit and income below 120k)?
just decided to buy a property abroad (EU) and spent few hours today on cantonal (ZH) websites and read lots of old posts on this forum. The longer I read stuff, the more confused I am I already know that this year I will get help from the tax advisor but before I will do that I would like to ask few questions here, maybe someone can help me with my confusion today
Timeline:
- Now: Property is reserved and in a raw state
- August: Notarial transfer of property ownership - flat will be paid fully in cash, no loan
- beginning of 2024: flat will be finished and my grandparents will move there.
1. I am on B-Permit below 120 k. Do I understand right, that I will have to make a salary tax settlement for the whole year 2023 due to a fact that a notarial transfer of ownership is in August?
2. This property wont have an impact on my salary tax but I will have to pay wealth tax on it?
3. I spent today too much time trying to calculate wealth tax with some online calculators and I go bonkers How much approximately will I pay e.g. for 300 k CHF (property 200 value k and 100 k cash- I wish I had that much...) - is it few hundreds CHF?
4. Flat is in a raw state and it will cost about 15 k CHF to finish it- can I substract it from the value of wealth?
5. How do I calculate value of this property for wealth calculations- simply the amount I paid for it?
The obligation to submit a tax return arise if any condition is met:
1 you earn over X CHF annually
2 your wealth is over Y CHF
3 perhaps other cases I don't remember...
People commonly neglect point 2, and as long as their wealth is not in cash on a Swiss bank account it's hard for the tax authorities to find such people... so people continue living a happy life not paying wealth tax when they should, however one day their salary cross the magic X threshold or they get a permit C and submit their first declaration... that's the point when they have to show their wealth and the tax office asks "huh, where does your wealth come from, can you prove it's legal or should we tax you 75%, oh if you had such wealth for several years we have to correct all of the previous years please submit your tax declaration for ... (up to the date you arrived if you've already had wealth exceeding the tax free allowance)", that's what happened to me after 3 years in Switzerland
2. it affects your taxable income at least, i.e. if your taxable is x, self rent value of apartment y tax would be calculated as follows:
r = average tax rate of x+y taxable income
tax to be paid = r*x
(I forgot if this is for canton or federal)
you don't need to include the apartment into any of the calculations if you can either prove that your grandparents need support or have lifelong rights to live in the apartment (at some places this is a standard clause if grandparents are gifting the apartment but not sure if it makes sense if you are the one building it or paying for it anyways)
If you have a wealth of 300k you should know how much wealth tax you pay each year. Why you ask? Because if your wealth is 80k (160k married couple) you must voluntarily and spontaneously request the tax forms and do a full tax declaration.
yes, that's the one which is a "grey" area, as if you don't do it it's not a crime, you'll just have to re-do your past tax declarations
In regards to pt.2 I’d suggest you read about imputed rental value. Quick search brings first article: https://key4.ch/en/coach/legislation…ax-calculated/ - and there is a lot more on google.
Pt.4. No. In fact you will pay more tax, because now your property valuation increased by 15k.
But don’t despair quite yet, if I am correct you can claim flat rate costs of 20% per year from your “rental income” (see imputed rental value).
Now, here would be question for a specialist: Since you are ‘renting’ the property to your parents could you deduct this cost as family support, and thus rendering the imputed rental value null. Just a thought.
Regards
What if part of the money is in foreign accounts? Do the swiss have access to EU accounts, for example?
And pay a fine as it is a misdemeanor. The fine for first time offenders is usually as much as the tax owed. Thus you will have to pay double. ( Art. 175 DBG )
You have to declare your worldwide assets.
You might want to inform yourself about the automatic exchange of information and the once in a life time option of a self disclosure with impunity (Straflose Selbstanzeige).
If it's a mortgage then it's still not wealth, it's a tax-deductible loan.
This really is very simple, as pointed out above, wealth is not increasing, it's just being moved about...
Sounds simple in theory, but:
"Taxpayer in country A has a bank account in Country B..."
This is what's fuzzy. If I open a bank account in Germany (country B) as a swiss resident (country A), then fine, obviously that is my bank account.
But if I had a bank account in Germany (with a German address) before I moved to Switzerland? I understand that details like DOB might help them connect the dots, but I have doubts as to how it works in reality.
Asking for a friend
I see your logic and I concur in regards to wealth tax.
As to an income tax - the value of the property will have an impact on the forementioned tax (through imputed rental value):
‘The calculation of the imputed rental value is not uniform in all cantons. However, the basis for the calculation is always the value of a property . To calculate this value, the individual cantons proceed according to different systems.’
https://www.taxolution.ch/swiss-tax-…-rental-value/
And if I am not mistaken it will also increase property tax - for Swiss based real estate.
There is no "property tax" - other than Grundstuckgeweinsteuer (capital gains on the sale of property - covered many times here on EF) and the aforementioned imputed rental value...