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Federal Court Decision on promotion of home ownership: Relaxation of provisions?
The promotion of home ownership with funds from the occupational pension plan ("WEF") is, among other restrictions, in principle only possible for owner-occupied residential property (own use) and must be repaid in the event of a sale (or economically equivalent thereto). However, the Federal Supreme Court has now rejected the repayment claim of the pension fund in a case (BGE 9C_293/2020) with WEF advance withdrawal and later rental.
In the present case, an apartment was co-financed by the WEF advance withdrawal in 2003 and was also owner-occupied until it was rented to a third party as of 2016.
The Federal Supreme Court states that as long as the residential property is not sold and is rented to a third party with the usual notice period of three months, the funds from the WEF advance withdrawal remain tied up. Accordingly, no repayment is triggered by a sale of the residential property. However, the Federal Supreme Court makes the reservation and restricts the above statements again that a WEF advance withdrawal would be contrary to its purpose if the intention was to rent the property to a third party (as an investment) from the beginning.
In this respect, a WEF advance withdrawal will continue to be possible only for personal use. According to the Federal Supreme Court, however, a residential property co-financed by an advance withdrawal from the WEF may be rented out after years of own use without triggering a repayment of the advance withdrawal to the pension fund.
For any further questions or advice, please contact Remo Merz, Swiss certified tax expert, merz@fineac.ch.
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Keywords: Tax, Federal Court Decision on promotion, home ownership
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