There’s a house for sale in my neighborhood with a really nice garden, it would do a lot of good for my family’s social life
However, the heating system is electric and needs to be upgraded until 01.01.2033. Replacing it, it’s a huge bill (around 80k minus the Commune subsidies). Also, soon we will no longer have the tax deduction.
I currently have a 4.5-bedroom apartment and a small, growing business. I use one of the rooms, but ideally, I would like my own separate space.
I have four options:
Keep my current 800k mortgage for the next five years and deduct some renovations from my taxes until 2028.
Sell my apartment (valued at 1.25M), upgrade to a 1.5M house with a separate space for my business. I’m a bit scared of the bills it might be too big a step.
Increase my current mortgage and invest the difference in ETFs/stocks.
Increase my current mortgage and purchase a house in a UE country (my home country)
Canton of Vaud, yes 01.01.2033. It seems that it’s possible to ask for a 5 years extension until 01.01.2038 if overall energy performance of the house is class D or E. However, it’s super expensive to keep a house with an electrical heating system and sooner the better.
Your mortgage is probably below 1.5% (or around that value). That is very cheap capital. Cheaper than all margin loans. if you get a fixed term mortgage (5y , 7y, 10y), then you have very little risk for the mortgage interest. At the same time, the expected return of a stock ETF should be approximately 5% (maybe more).
I am surprised to hear that a heating system costs 80k. I guess you need water pipes (Bodenheizung or maybe radiators) as the current heating system is using electricity directly.
It’s Switzerland, there’s no upper price! I guess if you just have the main unit installed you can run all the piping and radiators yourself to save money.
This looks like the calculation from a GEAK Plus, right.
These numbers are only estimations. Dont take them for granted.
Sure, the heating system is an important cost. for Example only a heatpump itself costs 10-20k. With minimal installationwork you can end up quickly at 30k. In your case piping needs to be redone. If you would tear out the floors anyway, the additional work to install floorheating pipes is not so big.
I just signed an offer for the same thing - we have direct electric heating. Perhaps our house is a bit bigger and I went with fan assisted radiators, but it will cost me 75k after tax and subsidies (in zentralschweiz) -_-. Batteries and solar probably going to set me back 25k after tax and subsidies too.
It’s a big job! But at the same time the electrical heating is so expensive that In my case heat pump, solar, battery will together give me a 5.5% ROI (and that’s a tax free 5.5% )
I should add this ROI assumes zero value add on the house. Purely saved energy bills
Sounds like an insurance claim lawsuit… there’s a reason they ask you if you have underfloor when you calculate the gebaudeversicherung premium
In saying this I almost considering doing exactly this myself. I suspect it would have caused issues with the Fordergeld though. And for installation of a wet heating system this was a lot of money in our canton
Thanks a lot for your comments. I am still deciding. Right now things are not looking good with geopolitical conflicts. Keeping my appartement is the best investment, buying the house will improve our quality of life but that comes with a heavy cost. Financial vs lifestyle.
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it might be too big a step.
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