Choose or opt for rental

Some people think that becoming a homeowner will save them rent and reduce income taxes by including interest on mortgage debt. This idea is not entirely correct. Unlike in other countries, Switzerland takes into account a rental income in the tax return of the owner(s) even if no rent is actually collected because the property was occupied or not by the owner(s), this approach and practice of the tax authorities automatically increases the income tax.

Becoming a homeowner is not always a tax-efficient project for buyers. The tax authorities calculate the rental income for the property occupied by the owner(s) in Switzerland according to the area, location and tax value. This rental income, combined with the fact that you are a homeowner, generally corresponds to the rent you should pay, which brings us back to the starting point of income tax before you buy a property. In other words, if you decide to buy the same apartment you currently occupy, the tax burden you pay in addition more or less corresponds to the rent you pay as a tenant.

The purchase of a property requires a thorough tax study, there are some approaches you can adopt that allow you to pay less tax even if you own property in Switzerland or abroad.