Withdraw 2nd Pillar buy property abroad while leaving Switzerland

Finance, Taxes, Banking, Insurance and Retirement
1
Hi,

Just a quick question about 2nd Pillar withdrawal for which I did not find an answer in the Forum.

For what I understand if/when you leave Switzerland for a EU country, your second Pillar will be blocked on a vested account until your retirement.

Could one use this money later to buy a primary residence abroad or is it really blocked until retirement?

Thanks in advance for your answers!

2
Possibly if it's your main residence. You might be able to take the cash, depending on the insurance rules & your employment status in your new country.

3
Not 'possibly' but definitely - you can withdraw your pillar 2 savings to finance the primary residence abroad (or repay an existing mortgage on it). 'Abroad' can be anywhere in the world, it's not limited to EU/EFTA.

There may be some restrictions on the max amount (I believe for P2 you can only take what has accumulated to the age of 50, with P3a there is no limit)

4
Hi,

I finally got an answer from my insurance regarding my 2nd Pillar.

Apparently, I can withdraw the second pillar to buy a main residence abroad only during the first month of leaving Switzerland. I don't really understand why I won't be able to do so later, but at least it is something...

Thanks a lot for your answers.

5
Maybe you can, but isn't it a trap with the fact that by withdrawing with this 2nd pillar fund with these special circumstances, you will be heavily taxed?

I am just expressing concerns, I am not familiar with all the details of the topic.

6
On the contrary - pension fund withdrawals for this purpose are taxed at a preferential rate that varies between cantons - the worst case is around 4.75% flat rate while some cantons have progressive scale (for example, Geneva will only take 1% of CHF 50K, climbing up to around 2.75% if taking out 100K).

Once you leave Switzerland it's the canton on the institution holding the money that taxes it, not the one in which you were resident.

7
Is it possible that the pensions saving drawdown is also taxable in the new country of residence?

8
Yes it's possible, as 'withholding tax' can then be reclaimed, it very much depends on DTA as you will likely be tax resident in your new country.

9
I am unable to find any information about the situation when a mortgage on the property abroad is *lower* than the savings in my pension fund. Is it possible to withdraw the savings in this case? What happens to the delta between the mortgage and the savings?