Financing of a second home in Switzerland

Invest in one of the strongest independent currencies in the world? Take a look at the possibilities for a (second) home in Switzerland. In addition to the tax benefits, you also have a holiday home in one of the most beautiful countries in Europe. But what about financing a second home in Switzerland? FIRST. has been guiding the purchase and sale of real estate in Switzerland for over 15 years and is happy to help. Request a meeting or contact us.

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There are both business and private solutions for financing a second home in Switzerland. As a foreigner, you can borrow about 60% from a bank based in Switzerland. You withdraw the remaining amount from equity. You will receive the mortgage debt in Switzerland by means of a Debt Note. This brings more flexibility and options than a mortgage in the Netherlands. We support in the process together with our partners.

Second home in Switzerland

Financing: second home in Switzerland

Take advantage of the low interest rates in Switzerland for a (second) home. Interest rates in 2020 are approximately 1%, which of course depends on the chosen mortgage. For example, you can take out a mortgage in Switzerland for periods from 5 to 35 years. The conditions are that the mortgage is paid off before the age of 70.

The bank also looks at any obligations in the country of origin, such as mortgage, rent, loans, maintenance and outstanding debts. The bank also asks for proof of income, pension and investment income to assess your financial status. We will of course be happy to guide you through this and ensure that the process runs smoothly.

Taxation of home in Switzerland

First of all, the mortgage interest on a second home is not deductible in your own country. You can, however, offset the mortgage on real estate in Switzerland with the property within the tax framework. The interest is then deductible for Swiss income tax. Two situations are possible here, namely in the case of a second home with rental income and a second home without rental income.

Financing realty Switzerland

Second home with rental income

It is allowed to temporarily rent out a second home in Switzerland to tourists. This generates rental income, which is deductible from the mortgage interest paid. Renting out a house in Switzerland is not allowed to permanent residents. This is to prevent speculation on the housing market from 'outside'.

Second home without rental income

If you decide not to rent out the house, the interest is deductible from Eigenmietwert. This is an amount on which you must pay income tax. The height of the Eigenmietwert differs per canton and is a percentage of the current market value.

In addition to the Eigenmietwert, there are various other tax and legal matters that you should take into account. It is therefore wise to be properly informed in advance. We at FIRST. are happy to help and put you in touch with our partners in the region.