Mortgage Downpayment - sell stock vs. withdraw 3a

Banks, Insurances & Third Pillar
1

Hello everyone,

We have in the next weeks to transfer the downpayment for a new house.
Currently I’ve provided 5% in cash, and 10% will come from Pillar 2, I’m now trying to decide for the remaining 5% which is the most efficient way.

Let’s assume 1m buying price, so 200k downpayment, the needed funds remaining are 50k, I could sell some of my stocks (mostly VT/VTI) which despite the US doing their best to sink them are still profitable (but incur a very unfavorable USD-CHF exchange), or withdraw my pillar 3a from VIAC 100% stock strategy (for simplicity let’s assume the entire 3a is 50k and I’m still going to stay with VIAC for the future).

On one side USD hits me, on the other taxes.
Then there is the new law which would allow to contribute backdated 3a from this year, whether that helps in the future or provides some refund on the withdrawal taxes.

Did anyone go through a similar scenario and has some recommendations?

2

Wherever you sell the stocks, you will be selling during bear market.

Ideally the best would have been that money needed for RE purchase was in fixed income. Anyhow now that you have no other choice, I think selling stocks in taxable account would be easiest

No matter where you sell stocks, the impact is same. But in 3a withdrawal, you would need to account for lump tax payment on top.

A world strategy inside 3a and VT are functionally equivalent at this moment , no matter which currency they are denominated

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3

I agree - but since we didn’t plan to buy with market timing in mind, it is what it is :slight_smile:

The difference is that VIAC is reporting in CHF (so already absorbing the fx ratio), while with the broker I would have to further eat the USD-CHF exchange. Whether that is higher than taxes for withdrawal is probably something I can calculate.

4

If I were you I would do my best to avoid selling anything and move your 3A to another provider if necessary to pledge it.
UBS Raiffeisen or CIC for instance have decent 3A options like 0,5% custody fees + 0,25% fund TER

I have no idea about you have of VTI but if more than 250k a margin loan is also am option to consider

5

Margin loan is interesting actually, it’s something I did not consider - thank you.

Re. pledging, of course the easiest is to move it to the financing bank and pledge it there, but this would anyway trigger a “sale” from VIAC perspective because they would liquidate the assets and move just the resulting cash (correct me if I’m wrong). It would save on taxes indeed but increase my mortgage.

Overall not a bad plan, can still keep VIAC for 2025 contributions and beyond, while 3a at the bank remains as collateral.

6

But like was pointed out, the currency they’re denominated doesn’t actually make a difference.

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7

Well, that is a lot of misconception from your side. You can’t magically remove currency conversion effects, and the reporting currency also makes zero difference.

The only difference is the tax-advantaged status of 3a. I would keep 3a balance to profit from it, but if you want to withdraw 3a, this is a good opportunity.

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