Finance Solutions
The right change
The right change
Not everyone has the money to buy an apartment or a house outright. However, there is no need to worry. In many cases from a tax perspective, there is no point in paying the complete amount out of your own pocket.

If you purchase a property yourself, you have to pay tax on its rental value as potential income (the rent that you could ask someone to pay for your property). You also have to do this if you take out a mortgage (i.e. if a bank helps you to finance your property). The big difference is that you can offset the mortgage against your taxes as a debt. The bottom line is that you pay less tax if you have a mortgage.

 Funding through a mortgage

   Direct costs:
  • Interest on the mortgage
  • Capital repayments for a second mortgage
  • 15-20% of your own money
Examples of additional costs, which vary depending on the canton:
  • Notary's fee, transfer tax and fee for changing the Land Register (the break up of fees between the buyer and the vendor varies depending on the canton)
  • Cost of establishing the mortgage on the property
  • Costs of reports and/or valuation
  • Capital gains tax on property, which is only for the vendor
Self-funding

   Direct costs:
  • Purchase price
Examples of additional costs, which vary depending on the canton:
  • Notary's fee, transfer tax and fee for changing the Land Register (the break up of fees between the buyer and the vendor varies depending on the canton) 
  • Cost of establishing the mortgage on the property 
  • Costs of reports and/or valuation 
  • Capital gains tax on property, which is for vendor only
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