Disposable Income – Living, Commuting, Childcare: Where's the Least Expensive Place to Live?
Households can make substantial savings by moving to a different location. The most recent Credit Suisse study highlights the Swiss municipalities in which households have the largest disposable income after the deduction of mandatory taxes and fixed costs.
The criteria used to identify the "right" place to live are many and various. Besides geographical location, infrastructure, the availability of suitable properties, emotional criteria and personal ties, financial aspects also play an important role. When assessing the residential desirability of a particular area in financial terms, households should look not only at the tax burden but also at other essential outgoings such as health insurance premiums and the level of tax on imputed rent for home owners. Other key factors are location-specific fixed costs such as rents, real estate prices, commuting costs and childcare.
What's Left at the End of the Month: Freely Disposable Income
One broad measure for assessing the financial residential desirability of a municipality is freely disposable income, which includes all location-specific residential costs. Since 2006 Credit Suisse has been calculating disposable income in the approximately 2300 Swiss municipalities and city neighborhoods for a range of model households. The most recent issue now also includes childcare costs at individual municipality level.
Cantonal Ranking: Uri Defends Its Top Spot
As in the last survey in 2011, Canton Uri has the highest financial residential desirability, followed by Glarus. Besides cheaper housing costs, both cantons offer moderate taxes and comparatively low health insurance premiums. By contrast, the "big city" cantons of Geneva and Basel-Stadt are still positioned at the other end of the rankings and well below the national average. Here, given the same income, there is less money left over at the end of the month for discretionary spending compared with suburban or rural areas. Low fixed costs or low mandatory charges can give rise to a high level of financial residential attractiveness. The cantons of Jura and Zug, for example, have similar financial residential attractiveness at just above the national average. High housing costs in Zug prevent the canton from having a more attractive position, while in Jura the above-average mandatory charges are to blame.
Childcare Outside the Home: Least Expensive in French-speaking Switzerland
Families with children in external childcare can benefit from government support depending on their financial means and the type of provision. The impact of childcare on family budgets varies tremendously depending on location. A typical family with two children, both of whom are in daycare for two days per week, and a gross earned income CHF 80,000 will incur costs of around CHF 1300 in Canton Bern to over CHF 26,000 in other parts of the country. The maximum tax deductions for childcare costs also vary sharply. These range from CHF 3000 in Canton Valais to CHF 19,000 in Canton Neuchâtel, while Uri has no upper limit. In overall terms, the cantons of Valais, Jura and Fribourg are the cheapest to live in for families with children in childcare outside the home. Family allowances, daycare subsidies and deductions for childcare tend to be higher in the cantons of Western Switzerland than in German-speaking regions of the country, making the Suisse Romande more attractive for families with children in external childcare.
Commuting Costs: Reduced Deductions for Car Drivers since Start of Year
70 percent of all employed persons in Switzerland work outside the town they live in. Around half of commuters use their own car to get to work every day, while one third use public transportation. Despite higher mobility costs, moving to suburban municipalities is worthwhile in most cases – purely from a financial point of view. Lower housing costs mean it is usually cheaper than living in urban centers. However, the additional time involved, uncertainty caused by traffic jams and delays as well as other non-monetary factors need to be added to the direct costs. To achieve its environmental and spatial planning objectives, the federal government halved the maximum commuting deductions to CHF 3,000 at the start of the year. Living in a more remote area therefore becomes less attractive, and the demand for centrally located accommodation is correspondingly greater. Various cantons such as Zurich and Basel-Stadt have followed the federal government and reduced their commuter deductions. Residential regions heavily dependent on commuters nevertheless continue to allow unlimited deductions in terms of cantonal tax calculations. They include Uri, Glarus, Graubünden, Valais, and Fribourg.
Fact Sheets for All Swiss Municipalities and the Main City Neighborhoods
Freely disposable income depends on the specific characteristics of each household. Presenting all the results for all Swiss municipalities together would exceed the scope of this study. This is why Credit Suisse has produced fact sheets for each municipality separately and for the city neighborhoods of Basel, Bern, Geneva, Lausanne and Zurich. Each fact sheet compares the financial residential attractiveness of the municipality with that of the main neighboring municipalities and contains information about the cost of commuting and external childcare.