Tax is never fair. But it will be replaced by a tax that is even less fair and more complicate. Only rich people profit and somebody has to pay the bill.
I really don’t care too much as it makes not much difference for me. I have debt because I don’t trust our money-banks and the debt will be more expensive in the new tax regime. Except for real-estate owner that rent out their property. That is bullshit and can only come from extreme lobbying. And you don’t read anything about it, no newspaper did report about that!
FWIW I suspect this will encourage people to setup a proper holding company when renting out (because most people are not 100% invested in real estate and would miss out on deductions)
Was not clear to me and it makes no sense. Even some tax specialists said that deductions on tax-generating income should always be possible. But in the last version, the one we vote on, only deduction of debt interest on rented out real estate is possible.
Exactly. But the UBS article fails to mention debt interest deduction on other tax-income generating goods. The same formula as for rented out properties should be applied there. But only rented out real estate is mentioned!
Thanks for the link, interesting. In several points, they come to the same conclusion as me, but I missed that point in the proposal:
Got it now. They likely assume hardly anyone invests privately on margin in a big scale, and want to prevent people loading up private debt instead of keeping a mortgage, thus still getting the deductions while not paying imputed rent.
How to read this, though?
“Art. 33b
Bisheriger Art. 33a”
Current 33a covers private debt in general.
Absolutely not. The debt interest is put in the same relation as the holdings. They do that already now to decide about withholding tax returns. It does not matter what good you have as collateral for your debt and that is logical.
As long as you have a mortgage and hold stocks the debt interest is put into the same relation like the value of your stocks to the value of your real estate. So it would be very easy to allow the partial deduction too, same as for rented out real estate.
One of the explicit goals of the regime change is to force deleverage the Swiss financial system and by extension, Swiss households. What you propose counters that.
OK, again, it does not matter if you have a mortgage or a margin loan. For tax purposes there is no difference if the debt has real estate or stocks as a collateral. In my opinion the main difference is if it generates taxable income.
With the old regime both did, with the new regime not.
If the target was deleveraging they should not allow to deduct the interest on debt when renting out real estate. The only reason they do allow that is bribery, called lobbying.
That’s my question. It’s moved, not replaced.
edit: never mind, there’s obviously a difference between 33 Abs. 1a and 33a
My bad
Your UBS link says
In combination, does it actually mean there’d be no more deduction of private debt? Or that new restriction would only apply if you do have rented real-estate (with or without self-used one) to avoid gaming the new rules?
The current art 33a (renamed as 33b) is about donation: Fedlex
You can deduct private debt up to the ratio of rented out properties (not self used) vs. total wealth. If you don’t rent out, no deduction.
Btw @cubanpete_the_swiss I skimmed the parliamentary debate and they point out that stock has untaxed capital gain while real estate doesn’t. So the argument is that it would be unfair to let stock owners leverage for free when they’re only partially taxed (unlike real estate).
(and stock typically has often more capital gain)
edit: but anyway that’s the point of the law that seems to have taken the most time to settle, so obviously it didn’t make anyone really happy, fully removing the deduction was probably the fairest (and that’s how other countries do, no Eigenmietwert, no deduction) but apparently that was too extreme and limiting it to 40% or 70% was too much on the other side, so the tradeoff was the complicated rule.
That is true, good point… but not on a national or even Kanton level. But it is a fair argument that I can accept.
With the new regime capital gains on real estate will still be taxed and capital gains on stocks will not. Instead of equalizing the difference there will be a new difference, the deduction of debt interest.
FYI that’s what the federal council said during the debate:
Es gibt aber auch gewisse Nachteile, ich möchte sie der Vollständigkeit halber auch erwähnen. So verbleiben bewegliche Vermögenswerte für die Berechnung der Schuldzinsen hinsichtlich eines Abzugs unberücksichtigt. Die steuerpflichtige Person kann beispielsweise für ein fremdfinanziertes Wertschriftendepot, das einen steuerbaren Vermögensertrag abwirft, künftig keine Schuldzinsen mehr geltend machen, solange sie nicht zusätzlich über vermietetes oder verpachtetes Wohneigentum verfügt. Da ist eine restriktive Regelung aber trotzdem vertretbar, weil das geltende Recht mit den genannten beweglichen Werten sowieso relativ grosszügig verfährt, indem private Kapitalgewinne steuerfrei sind. Zudem ist die quotal-restriktive Stossrichtung administrativ etwas aufwendiger.
So they acknowledge it’s less fair, but because of the free capital gain it’s not so bad.
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