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Step 4: How Can I Save Taxes with My Home?
The smaller the figure on your tax bill, the more comfortably
off you are. As a homeowner, you have various possibilities for exerting a positive influence on your personal tax bill.
Actual Costs or Flat-Rate Deduction?
If in the course of a year you have few or no maintenance costs, you can still claim a flat-rate deduction from the imputed rental value in most cantons. Claiming deductions for actual maintenance costs is particularly worthwhile for you if these costs are higher than the allowable flat-rate deduction, which is normally between 10 and 20 percent of the imputed rental value. It therefore makes sense to concentrate any necessary maintenance work and major renovations into a single tax year and to offset the actual costs against tax before switching back to the flat-rate deduction in the following year. This switch is possible from one tax year to the next in the majority of cantons.
Value-Enhancing Conversion and Extension
Investment generally increases the value of your property. The costs of such investment cannot be claimed against tax until the sale of the property.
Most cantonal tax authorities have drawn up information sheets for distinguishing between individual investments. In all events, it is important that you keep all construction documents and invoices in a safe place.
Energy-Saving Conversion and Extension
Practically all energy-saving investments (exterior and roof insulation, installation of double glazing) can be offset against income tax, as can expenditure for sustainable heating systems (heat pumps, heating elements, solar heating, etc.), even if these have a value-enhancing effect.
Withdrawal of Pillar 3a Assets
Withdrawals of pension capital to finance your construction project are taxed at a reduced rate separately from your other income. Tax Calculator for the Withdrawal of Retirement Assets
Replacement Purchase
If you sell your house and invest the proceeds in a new property, you can claim a replacement purchase from the tax authorities. This way you can, partially or fully, defer property tax.
Bear in mind, however, that on purchase the seller can also claim a replacement purchase. Hence the property gains tax is partially or fully deferred and may become due at a later point in time. If at such time the seller is unable to pay this, your property can be subject to a right of lien in accordance with the law. However, by this time the deadline for retrospective entry of the legal right of lien has often expired.
As these are complex tax issues, we recommend that you discuss your personal situation with a tax advisor.
Repayment of the Mortgage
Before contemplating a partial or full repayment of your mortgage loan, consult your Credit Suisse advisor, who will explain to you the tax consequences entailed by this. Generally speaking, you can optimize your tax situation more by initially utilizing all opportunities for making Pillar 3a and pension fund contributions rather than paying off the mortgage.
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