Use pension to finance mortgage

Real Estate
1

Hey folks,

Long time looker, first time poster :slight_smile:

This year I started to slowly look into buying a property in Switzerland. Got some high level understanding, but it is still not clear how to deal with pension funds. My situation is the following:

  • I (M35) have: 2 pillar, 1e pillar and 3a pillar.
  • My wife (F35) has: 2 pillar and 3a pillar.

What is withdrawal tax rate? Does Cookie Not accepted provide right rates? Is amount the only “floating” variable?

What are limitation after money withdrawal from 2 pillar? I saw that you can’t do buy-backs (ok, you can, but you won’t benefit from tax advantages) and disability benefits might be lower.

Let’s assume I will make a buy-in to my 2 or 1e pillar. I won’t be able to use this money for the next three years, right? What can go wrong if I do a buy back to one of my pillars today, buy a property tomorrow and use the pillar to pay back the mortgage in three years (assuming my mortgage allows that)? If I withdraw the money, I should be able to do it again in five years (again, assuming my mortgage allows that)?

2

Usually we do not count on first pillar to buy a property or cashout.
You will get an retirement allowance at your retirement age.
For 2nd pillar, you need to check with your fund manager to know what you can do.
But you mention correct assumption. Do not buyback if you want to withdraw it for your purchase.
After the purchase of you get a bonus or other lump sum you can refund it until you cover the gap to benefit from tax rebate.

If one day you sell your property the notary will refund the 2nd pillar from your withdraw.

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3

Usually we do not count on first pillar to buy a property or cashout.

JFYI 1e is not really first pillar, but special type of second pillar.

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4

Either:

  1. Your pension provider doesn’t allow you to withdraw; or
  2. You can withdraw, but the tax benefits you got on the buy-back are clawed back

#2 should happen but people have raised #1 as a possibility.

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