After a bit more than 2 years in Zurich I believe I need to request a “Nachträgliche ordentliche Veranlagung” as I believe I exceed this threshold “Vermögen über CHF 80’000”.
I am now wondering how I can calculate this, I am thinking of the following calculation and wanted to check if it makes sense with you.
Cash in all Banks → Y
Stock values as of 31.12.2024 → X
And now comes the question, I got one apartment in a European country. The local tax authority estimates its worth at 40k euros. On this apartment I am paying a mortgage every year. How should I calculate its worth?
Would I need to do Y + X + 40k ? Should I subtract the mortgage interest?
In ZH the guidelines for a foreign real estate is to declare 70% of purchase price (or fair market value if the purchase price is widely outdated) I believe. Mortgage interest is irrelevant for the wealth calculation because it is an income deduction - you will deduct it from the income you generate (with Swiss employment and the actual rent or virtual rent of your apartment abroad).
What you should consider for wealth is the mortgage debt itself though: you deduct it from the value of the apartment (if the apartment is worth 40k but you owe still 10k in mortgage principal then the wealth is 30k).
However, one thing to consider is that wealth (and income) of the foreign real estate is not taxed: it is considered to determine the tax rate, but not taxed directly. So I am not 100% sure whether the 80k threshold applies to total worldwide wealth or taxable wealth - if the latter, I think the value and mortgage of the foreign real estate is irrelevant. I did not find an authoritative info on this topic, if you don’t (and you hope not to need to file taxes) - might be worth clarifying with the tax office directly
Actually, this page says “wenn das steuerpflichtige Vermögen (z. B. Wertschriften, Liegenschaften) von Einzelpersonen mindestens CHF 80’000”. I would interpret “steuerpflichtige” as the fact that value of foreign real estate is not included because it is not taxed. But you might want not to trust a guy on the internet on this one
A 20M mansion will push your wealth tax rate very high even if you own little assets outside of it (~0.6% in ZH or so), but it will still be applied only to your other assets. So if you own a foreign 20M mansion and otherwise you have 1000 CHF of wealth, you will be taxed 1000*0.6% = 6CHF
So it would make sense for the tax office not to care about your foreign real estate for the purpose of deciding whether you have to submit a tax return - because if you don’t have much (outside of foreign real estate), there is not much to tax, even at a higher rate
In my opinion , the logic of 80,000 CHF simply comes from the fact that 80,000 CHF is limit in ZH to start applying wealth tax. Below it , it’s zero
And most likely tax office doesn’t want to get bothered to do a tax assessment if the person doesn’t have enough taxable assets to begin with.
For income - quellensteuer takes care of salaries and investment income held in Switzerland (due to WHT) and a person (if they only use foreign institutions for financial assets) need to have significant taxable assets to actually have taxable income which eventually would trigger tax return obligations.
I tend to agree that only taxable assets might count towards this 80K and hence foreign real estate wouldn’t.
Does anybody know if the imputed rent value is considered as additional income? Or is it merely to determine the tax rate but not regarded as actual income?
Since next to salary (120k), wealth (80k in Zurich), there is also a threshold of additional income (3k in Zurich). I wonder if therefore an imputed tax value can also be a reason why people need to file their taxes?
Zurich is most likely fine but other cantons have a lower value than 3k.
Foreign imputed rent is only to compute the tax rate. Domestic imputed rent is actually taxed. (but if you have domestic imputed rent, you’re definitely above the the wealth tax threshold )
Due to the tax value of real estate sometimes being significantly lower than the market value, the mortgage is sometimes larger than the tax value, so it’s conceivable that a home owner is still below the wealth tax threshold (assuming the threshold is about the taxable net worth, not just taxable assets).
Indeed my partner had negative wealth due to this.
1 Like
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, tu confirmes avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.
)