FIRE, minimalism and moving to France

Minimalism
19

I don’t have an answer but I have the feeling that taxes might play an important role :slight_smile:

Personally, I grew up in Italy next to the Swiss border. After working for 3 years in Italy, I have been transferred to the Ticino branch of the company and I became a cross-border worker (I was still living at my parents). Then I moved to Geneva but lived in France, then finally moved to Geneva.
For me, moving here was the right choice for several personal/family reasons and I love where I am now… from a financial point of view, it was not the cheapest option.

But… some random ideas to take into consideration:

  • if you work in Geneva and have ~90% of your income here (as far as I remember), you have the “quasi-resident” status and you are taxed just in Geneva (they send back a part to France, but you basically pay the same amount as if you were living in GE)
    Already if you change job and go to work in Vaud, it’s a different story. As far as I know, you will be taxed in France and the “barèmes” % are not at all the same.
    Same if you live live in Alsace and work in Basel area, or if you live in Germany and work in Zurich etc.
    Apparently it might be expensive.

  • What if you have significant investments / properties / returns, and you have less than 90% income from GE? Will you be taxed completely in France at that point? Idk but I would check before

  • Ticino and Italy had an agreement similar to Geneva with France: at the time I was paying taxes just in CH… so basically my gross income was the same than Italy, but the net was higher.
    Now Italy would like to collect all the taxes and do like Germany and France (with the exception of Geneva). Who knows if and when it will happen? It might change the plans.

  • France would like to tax the home office work for people employed in Geneva. They didn’t find an agreement yet, and they might never find it
    For the moment, they are just extending COVID exceptions for work-from-home… but our company already told to border-workers (~50% of the workforce) that without an agreement, they will have to come back 100% at the office and they won’t be allowed to connect from home at all.
    So, if you are used to flexibility and you can go pick up the kids at school at 4PM, then connect again in the evening to send a couple of mails… it might be annoying.

Also, if they don’t find an agreement, border-workers will be less attactive for employers imho companies are shrinking their offices but they need to keep enough room for border-workers, while swiss-residents can work from home (in our case, we already closed 1 floor out of two in our building, after COVID).

In CH, I can work from home and when I go to the office I have just 2km of walk.
If you live in France, you might need to take the car (unless you are not in the expensive Saint Genis or Ferney-Voltaire area).
Also, border-workers can’t have the company car anymore unless the company is paying VAT on it in France (for sure no company wants to do that).
I know most of people don’t have this first-world-problem, but for me it would be annoying… I use the car for customer visits, in Switzerland I can get a company car and use it as a personal vehicle as well. In France I would be obliged to switch to a car-allowance payment and lease a car compliant with the company policy.

  • 3rd pillar taxes? It looks like border-workers can’t deduct anymore, I didn’t investigate much but some of my colleagues were complaining.
    And what about when you will withdraw it? I have no clue but I would try to understand before moving

But it depends a lot on your personal situation, I think… kind of job, if you would like to keep working from home, how much do you earn and spend in Switzerland, potentials savings in FR/DE/IT, how you would be taxed, what about the school for the daughter, healthcare, etc
For sure if you are Swiss now, it’s easier to find a job even if you live in France and you won’t need any work permit… but other factors might play a role.

It might also depends on your FIRE goals. If moving to France would really make a difference, why not…
In my case, I’m still too far :slight_smile: so for the moment, I prefer to stay in Switzerland and have the flexibility to work from home, to move to another Canton, to be employed in another Canton (with the same taxes), to have less commuting etc.
Maybe at some point I will be closer to FIRE, it will be worth tax-wise and I won’t stand my job anymore :slight_smile: then I’ll go for it. But not so soon… (even though I enjoyed France and the village where I lived)

(all the ideas are “as far as I know” / “as far as I remember”, please forgive me if it’s not accurate)

4 Likes
20

Just to add some anecdotal data. My rent is CHF 550 for a 40 sqm in a mountain resort. I used to live in Vevey with a CHF 700 rent and my sister has long rented in Lausanne for CHF 1100. You can also find deals in Switzerland if you are willing to compromise, not all of us need to live in a modern appartment in the Zürich area.

That being said, I wouldn’t say there’s no geo-arbitrage possibility and I would fully expect to be able to afford a higher lifestyle in France or Germany than in Switzerland with a swiss salary/pension.

3 Likes
22

There’s a simple reason for that: if border-crossers work more than 25% from home (non COVID times), it has tax implications for the employee, but also operational implications for the employer. If e.g. a German border-crosser works more than 25% from home, it might lead to a new “office” for the company. Don’t blame me - I didn’t make those laws. The new “office” will have A LOT of consequences for the company, e.g. having to pay taxes in Germany, having to follow all administrative laws etc.

That’s the main reason why companies don’t want border-crossers to work from home only.

3 Likes
23

To add on the topic, you must be aware of the PUma contribution in France that target early retiree.
I have mentioned it on another thread.

24

Planning on moving back to France in about 18 to 24 months. Does anyone know how to withdraw the money paid into the swiss pension fund once I check out?

25

This thread should sort you out:

Pension fund withdrawal (pillar 2)

(Note though that benefits are, by law, supposed not to be withdrawn when you’re planning to return to Switzerland)

1 Like
26

And unless you need the money, I’d consider not cashing out, the pillar2/3a options are competitive for tax-free growth vs what you can do in France.

4 Likes
27

thanks to the both of you for your advice. I’ll look into it !

28
  • Buy 100k$ of VT
  • Sell 5 years later for 200k$.

Option 1: French resident, capital gain tax = 30k$.
Option 2 : Swiss resident, capital gain tax = 0.

Latin people prefer to live in France because they love to own real estate on a budget.
Not sure it’s a good deal when you have a high saving rate.

3 Likes
29

Hi !

You’re right, thank you for your feedback

I am a homeowner (4.5p, 500k) with a mortgage of 400k at a rate of about 1% until 2030.
So a high saving rate, mostly invested
Nice thing

My wife wants to move into a villa with at least 5 rooms (we are expecting a second child + I work at home a lot).
Her family is in Pays-de-Gex in France, near Geneva (easier with child sometimes)

However, here, that’s a minimum of 1 million CHF.
In contribution, there would be easily 300-400k contribution (current contribution, current home capital gain, personal).
We add the current 400k mortgage at 1% (i.e. 350 CHF/m)
Then 400k minimum mortgage to contract at 2-3% (i.e. 1000 CHF/m)

At these levels, you might as well rent… or contrat a home in France at 2/2.5k per month, amortization included.

So the reflection was made on moving to France as owners.
And rent our actual Swiss flat.
Apparently, our children will be able to continue school in Switzerland.

Regarding capital taxation, you are right. My investments are made for the long term and we have planned, when the children will be independent, to return to Switzerland.

We did not see any particular constraint.
I am looking for all the arguments to stay in Switzerland. But it is this 5-room villa project, which pushes us to consider France…

Conclusion: thank you my wife :joy:

30

Financial aspects aside, are you sure you can pull this?

31

It seems that it is the case according someone I know, but only when you have the nationality (it is the same thing as “indigen preference” for the job in geneva)

32

Last I heard this was no longer possible in Geneva unless schooling had already started. Disclaimer: I am not following the debate in detail so may not know the latest status and there may be loopholes too

Overall regards living in France vs. Geneva. My conclusion is that if you are at the start of your career with low net wealth then it is cheaper to live in France. At a certain point when your net wealth increases it becomes cheaper to live in Geneva because taxes become a factor.

1 Like
33

Hi !
Well I consider our wealth net “interesting” (savings, real estate, invests)
Otherwise our gross income is ok (200k/y) for fribourg canton while working in Geneva (home office) but not at the level of things you see on the forum (500k, etc)

I am desperately trying to find someome / an independant expert which would be able to drive us into an overall right decision. I am very well in Switzerland.

34

Tax on salary will presumable be comparable if you live in GE or France.

The taxes on wealth(*) , dividends and capital gains tax will probably be higher in France. Perhaps there is someone living in France on the forum could advise you

(*)Wealth tax France

Fraction Taxable Rate of Tax
€0 - €800,000 0%
€800,000 - €1,300,000 0.50%
€1,300,000 - €2,570,000 0.70%
€2,570,000 - €5,000,000 1%
€5,000,000 - €10,000,000 1.25%
€10,000,000+ 1.50%
35

There is no wealth tax in France on your complete wealth, only on real estate value. However it starts only at a value of 1.3 MEUR. The tax rates you show is actually the tax rates on real estate value. Primary residence is taken at -30% of value (meaning your primary residence has to be at least 1.8 MEUR to be submitted to wealth tax, if you do not have any other real estate). From what I have seen in the market, real estate for normal families is often much cheaper than that (except Paris region, but normal people can barely afford it ther anyway).

Taxes on dividends and capital gains is flat tax of 30% (of which actually are 17.2% social contributions and 12.8% taxes. However, you can ask the 12.8% part to be taxed as revenue if this is interisting for you.

However there is the tool of the PEA, which allows you to invest 150’000 EUR. Afther 5 years, you can take the money back without paying taxes, only the social contribution part (the 17.2%).

Furthermore, if you live in France and work in Switzerland, and you are insured in Switzerland for AHV and health insurance, you pay only 7.5% of social contribution.

(fuck it is complicated).

I researched all that because I would like to Fire in France because I would like to make some projects, which seem impossible in Switzerland but would be easy in comparison in France.

6 Likes
36

What would approximately be the critical threshold at which it becomes cheaper to live in Geneva?

1 Like
37

Great question ! happy to see the answers !

38

Based on @Patirou’s I would have to retract my statement: no wealth tax on shares and max 30% tax on dividends is ok

On the other hand there is capital gains tax and inheritance tax

1 Like
39

Also do not forget the PUma if you plan to have no activity before retirement age in France.