The financial structure of a mortgage loan offers many options with different tax implications. Here are some examples of optimisations.
Indirect amortisation
With direct amortisation, the amount of debt and interest decreases regularly, whereas with indirect amortisation, the borrower only pays mortgage interest and annually contributes the amortisation amount to a 3A life insurance policy. Using the 3rd pillar A (3A) to amortise the mortgage loan allows a employed couple to deduct CHF 7,056 per person per year from their taxable income. Utilising the 3A pillar avoids combining debt repayment and 3A savings for tax savings. In doing so, the available funds can, for example, be used for LPP (pension fund) buybacks and increase the amount of tax deduction.
Financing at 90 %
The rule states that the borrower must have a minimum of 20 % equity to obtain an 80 % mortgage loan. However, it is possible to use funds from your LPP (pension fund) to obtain a 90 % loan. In the long run, considering the tax implications and the possibility of making LPP buybacks with the remaining cash, this strategy can prove to be very advantageous.
Cohabitation
If you buy a property with your partner but one of you contributes more equity, be careful ! Taxes will consider it as a donation, and you will have to pay tax on that donation. As you are not related to your partner, the tax rate, although varying depending on the canton, can go up to 50 %. To address this, there are different solutions, but they require proper advice.
At Resolve, we provide information on the tax implications of your property purchase to assist you in optimising your investment.
Yannis Eggert
Senior Premium Credit Advisor
and Co-founder of resolve.ch