Eigenmietwert: what does it mean?

Bedeinha

Hello everybody

I am going to buy a house in Switzerland. I was surprised that i have to calculate so called EIGENMIETWERT.
Could somebody explain me what is this and how to calculate it?

Thank you in advance.
All the best,
Bedeinha

SantaMidnight

Hi Bedeinha

This is one of a tax peculiarity of Swiss tax law. It could be described as an a fictitious income from your property. This income has to be taxed even if you live in your home yourself.
Frankly speaking you have to take into account the cantonal rules for the calculations. There are a lot of differences.
In simple terms, you have to choose Canton where the property will be purchased. And only then you have to follow the local tax laws.

Be a good boy and Santa will bring you a present. 😄
Best regards,
Santa

Bedeinha

Thank you SantaMidnight for your clarifications.
Do I understand correctly that I have to calculate this Eigenmietwert for all private property incl. cars?

Thank you in advance.
All the best,
Bedeinha

SantaMidnight

Hi Bedeinha

No, you are wrong. Eigenmietwert has to be calculated just for houses, flats etc.
The rental value of other private property (e.g. cars,) is disregarded for tax purposes.

Don`t forget about Christmas 🙂
Best regards,
Santa

Bedeinha

Wow
Sounds good. Thank you SantaMidnight.
What about my flat in Argentina? Hope I should`t calculate this fictitious income from my property abroad?
It's pointless.

All the best
Bedeinha

SantaMidnight

Hi Bedeinha

Foreign properties and the income from them must be declared in the Swiss tax return. They are not taxed directly in Switzerland, but they are decisive for determining the progressive tax rate.

E.g. You own a flat in Argentina with market value ARS 10 000 000 and you have to fulfill your tax declaration in Freiburg. Exchange rate as of 31.12.2019 ARS/CHF = 0.016173.
So the market value in CHF = 0.016173 x 10 000 000 = 161 730
Eigenmiewert in Freiburg = market value x 2.5 %, CHF 161 730 x 2.5 % =CHF 4 043

Be a good boy and Santa will bring you a present. 😄
Best regards,
Santa

Bedeinha

Thank you SantaMidnight

To tell the truth, this is bad news. Is this calculation similar for Zurich?

Thank you in advance
Bedeinha

SantaMidnight

Hi Bedeinha

No, according to cantonal rule Eigenmietwert (EMW) should be calculated as follows:
EMW = market value x 4.25% = CHF 161 730 x 4.25 % =CHF 6 874

Be a good boy and Santa will bring you a present. 😄
Best regards,
Santa

NoticeIss

Hi everybody
I’d like to confirm my understanding about the calculation of overseas property market value used as a base for Eigenmiewert calculation. As I’ve understood from the example above, we only need to convert its market value to CHF using exchange rate per 31.12.20XX. But it seems to me I’ve heard that in some cantons the price could be reduced by some percentage, couldn’t it?
Could you please tell me if it’s applicable in Aargau?
Thank you in advance.

Lukelt

Good day NoticeIss
Yes, you are right. In some cantons incl. Aargau the market value of foreign properties can be set at a level lower than 100%. In Aargau the tax value of your property abroad is 80% of its current market value.
Best wishes
Lukelt

StrongGold

Hey guys

Do I have to declare and to pay taxes for Eigenmietwert , if I own a part of apartment (1/3) ? My parents still live in this apartment. Can I tell I'm renting it to them?
Thanks
StrongGold

Lukelt

StrongGold
Of course you can rent your apartment on your parents, but in this case you should declare these rental payments as income. Or you can estimate the Eigenmietwert and declare the part of it (1/3).
Best wishes
Lukelt

Spoonlich

Hello guys

I have a question about private housing as a business expense for self-employment.
Can I deduct a part of the expenses for business room in my private declaration?
If yes, how can I do this?

Thank you for your help in advance.
Spoonlich

SantaMidnight

Ho-ho-ho Spoonlich

I would recommend you to find more information regarding your question here https://accounting-forum.ch/d/306-home-office-expenses-may-i-deduct-them

Can you hear the Christmas Bells? 😄
Santa

Di_Maria

Hello

I must say you Swiss are amazing. I have never seen anything so unnecessarily complicated this in my life. Wasn't this whole Eigenmietwert nonsense supposed to be abolished anyway because of some national referendum?? Apparently not. If I rent my house abroad do I have to calculate this eigenmietwert?

Thanks in advance.
Regards
Di_Maria

SantaMidnight

Ho ho ho Di_Maria

Why are you in a bad mood? Christmas is coming, and Santa has set up a lot of gifts for you 😁
In this case, you have to declare your rental income.

Be a good boy and Santa will bring you a present. 😄
Best regards,
Santa