Removal of imputed rental value

Taxes
143

Fair enough, but it’s hopefully some time in the future. More important, keeping care of your house should be in your own interest, no tax incentive needed. I’d still take them myself if they are available, but I don’t think it’s needed.

Same here. I would pay down or, with some delay use pillar 2 at higher interest rates to do so. But with interest rates well below 1% it just doesn’t make sense.

I do understand the tax deductions can go both ways, and they shield you to some extent from rate increases, it just doesn’t make sense to me.

144

It’s physicist, that chose to work in banking and online adds, instead of solving the mysteries of the universe. Oh wait, was that an option to chose from? :rofl:

4 Likes
145

<insert here the image of a mouse (looking like a goofing up dog with a hat. A rat then?) trying to escape from the unforgiving spotlight cast by the merciless @Brndete …>

Also, at the time I joined, we also did 0.0001% revenue outside online ads!!!

I wish you were more fair!

:wink:

1 Like
146

It can be as little as 5-7 years for a new building…

This is not an incentive to keep up your house, you still have to pay: it is simple logic, debt interests are tax-deductible.

But now we are inventing a new logic: debt interests are tax-deductible unless it is for a house that you live in, but you can still deduct interests if you rent it out.

Maintenance work are deductible unless you live in your own place, go figure it out.

For full disclosure, I own real estate in Switzerland, both personally and via a company, everything rented out. But I live in a rented apartment, so I will see no change whatsoever whichever way it goes…

147

Actually renting out a house is the only situation where you still can deduct interest paid. That is unfair, all or nothing would be fair, being “all” like today and nothing… exactly nothing.

2 Likes
148

I hope it doesn‘t pass. Would mean changing my portfolio quite a lot.

I borrow a ton on margin. Without deduction from taxes, it stops being worth it to me.

I‘d probably use more leveraged funds then and part with short box spreads.

149

The full interest or do you have to take just the portion of interest as a fraction of all assets?

150

This.

151

Thanks. Now I understand

This statement makes sense if real interest rates are negative.

1 Like
152

Interesting. And clear

153

Doesnt make sense. Renting out an apartment is like doing business. You don‘t pay taxes on your gross revenues.

154

Depends if you are a private person or as a company. There is no difference for renting out, but if you are holding stocks on debt as a company you will still be able to deduct the interest paid, but you will not be able to do so as a private person. This sucks!

1 Like
155

sounds nonsensical to me, but I’m not going to look into the law unless/until it is voted in.

156

Actually makes me think, doesn’t this put direct real estate funds on a better foot taxation wise compared to owning a rental property directly? How hard is it to structure a company containing your rental properties to benefit from those rules?

157

As I said, for real estate renting there is no difference private or company. For all other debt there is a big difference.

3 Likes
158

Unfortunately that’s not true.

Company - all interest will be deductible

Private - a pro rata will apply (rented properties value/total wealth)

2 Likes
159

Very interesting, thanks a lot! This is really an attempt to completely reshape real estate private ownership.

160

The UK did something similar: after a long list of measures to discourage private lettings, they replaced tax deductions on mortgage interest with a 20% tax credit on mortgage interest. This restriction applies to individuals but not companies.

161

In general, company overheads make it not worth it unless you have many properties.

162

I still didn’t understand of what would happen to rental properties if the referendum passes. Will owners still be able to deduct mortgages and renovations?