House purchase and impact on wealth tax

Taxes
1

I was discussing with a colleague how a house purchase could completely “wipe out” the wealth tax.

Here a fictional exemple to illustrate the mechanism: the Jones are currently renting a flat. They have 600 kCHF on their bank accounts and are paying a few thousands francs in wealth tax every year.
The Jones decide to buy a property with a market price of 1’000 kCHF. However the official tax value (“Amtlicher Wert”) of the property is only of 350 kCHF.

The Jones decide to make a downpayment of 400 kCHF and take a loan of 600 kCHF to finance the house. They have 200 kCHF left on their bank account after purchasing the house.

When they fill out their tax forms for the first time, they realize their wealth from a fiscal point of view is null.

Savings: 200 kCHF
House value: 350 kCHF
Debt: -600 kCHF

Total wealth: -50 kCHF

Therefore they will not pay any wealth taxes since they are homeowners? Am I correct or overlooking something?

2

This was the case with our house purchase although the canton is talking about redoing all the valuations after the eigenmietwert changes.

1 Like
3

Ok, thanks for confirming this. What needs to be mentioned is that while wealth tax might be wiped out in such a scheme, you still pay some property tax which will be 0.15% for our future house.

And as you mention there will likely soon be a reevaluation of the fiscal value of houses with the disappearance of eigenmietwert..