Since you all happily pay the Swiss TV tax: for the Swiss German speaking masochists among us there was an Arena yesterday night on this very topic.
It’s basically a lenghty discussion repetion of arguments among the various interest groups already described in this topic. The introduction of the participants already revealed the various particular interests and representatives, and after watching the “debate” for maybe two minutes I decided that this wasn’t worth watching, but maybe some of you will enjoy it – after all you’ve already paid for it!
A quick technical question: the text submitted to the vote does not explicitly mention the abolition of renovation-related deductions (for example). Yet, it seems widely assumed that, de facto, such deductions will no longer be allowed. Did I miss something in the text, or is this purely a matter of legal interpretation?
Also the text being voted on is the second home cantonal tax (there’s a mandatory referendum for those), but the two texts are linked so if it doesn’t pass the imputed rental value also won’t be applied.
Comparing the present text with the potential changes, the changes in the legislation are more coherent than I thought aiming at their purpose to have people deleverage from the mortgage on owner occupied homes with time.
So, most changes are for owner occupied homes/secondary residencies and people with other kinds of currently deductible debt beside a mortgage.
Will not happen. The SNB is putting pressure for the banks to increase their equity capital (and costs) to lower risk on theirs books. Unlikely that they will reduce their margin, more the opposite
I think I came up with a solution for my personal situation with imputed rental value.
Up to now the deduction of my debt interest was way higher than the imputed rental value tax. Because I have a lot of debt in USD at high interest. Now, of course I did gain like 30% the last 20 years because the Dollar went down that much. But 20 years multiplied with the interest difference is much more than 30%! So I actually did lose money having the debt in Dollar, but as it helped reduce the tax I did not even care to calculate that.
What I will do: if the removal of imputed rental value goes ahead I will switch all the debt to CHF. Better cash flow and no need to deduct interest.
If the removal is denied I still will switch half of my debt to CHF, keeping the other half in USD, so I still pay no imputed rental value tax, but have a better cash flow situation.
Win/win because it made me think about debt in a way I did not until now.
Yes, the interest difference over long term is higher than the capital gain I had from holding the debt in USD. However, until now the interest was tax deductible and the capital gain was not taxed.
My investments are in stocks, not in USD. We already established that it makes absolutely no difference in which currency you buy a stock.
I would profit heavily from the change of law (1st time homeowner; already renovated the home and deducted all that; access to cheap capital/mortgages) and therefore selfishly vote yes.
Until now I had debt in USD. The capital gain was free of tax and the interest could be deducted, reducing my tax bill quiet a lot. Kind of an inverse carry trade with debt.
Now I switched half of the debt to CHF. If the voting goes through I’ll switch the other half too and then get out more or less even. Probably even better, because I get back more of the U.S. withholding tax if the debt interest is lower.
Sollte der Eigenmietwert bei der anstehenden Volksabstimmung am Sonntag fallen, ist mit grösseren Auswirkungen auf den Hypothekarmarkt zu rechnen. So erwartet Moneypark Amortisationszahlungen in den nächsten fünf Jahren in der Grössenordnung von 50 bis 150 Milliarden Franken.
Durch den damit verbundenen Volumenrückgang würde sich der Wettbewerb unter den Anbietern verschärfen. Infolge sei tendenziell mit tieferen Hypothekarzinsen zu rechnen.
Or companies which do not do it as core business will leave the market (like Viac for instance).
Thing is: it is a commodity product, as a company except the margin you do not have a lot of other selling points than the actual costs (maybe some special terms and conditions like flexibility in amortisation but other than that, not much) → means there will be probably a race to the bottom to cut costs, like standardised offers, less human interaction etc. (question here: is the market ready for that). Once the mortgage is locked in, the company got it and a lot must happen to lose it.
If so, that would lead to people wanting to pay down even more, margins rising and then fewer people willing to pay the higher financing costs and leading to lower house prices.
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