Financing home ownership: Everything you need to know about early withdrawal of pension funds

Financing home ownership: Everything you need to know about early withdrawal of pension funds

According to a report from www.nzz.ch,

The latest figures from real estate consultant Wüest Partner show that the proportion of home owners in Switzerland has fallen slightly. Nevertheless, interest in purchasing home ownership is high. However, many households do not have enough income and assets to qualify for a mortgage. One way to solve this problem is to withdraw pension funds from the pension fund and pillar 3a in advance.

The state promotion of home ownership makes it possible to withdraw or pledge missing capital from tied pension plans. This can be used to purchase or create home ownership as well as to repay a mortgage loan or finance renovations. Advance withdrawals are usually possible up to three years before retirement and can only be claimed every five years.

For tax purposes, a WEF withdrawal is treated like a capital payment from the pension fund at the time of retirement. This can have an impact on future interest credits and retirement pensions. An advance withdrawal usually has to be repaid when the financed property is sold, unless a new property is acquired within a certain period of time as part of the home ownership promotion.

For the real estate market, this means that early withdrawal of pension funds is an opportunity for potential buyers with low income and assets to realize their dream of owning their own home. This could lead to an increase in demand for residential property and thus also stimulate the real estate market. Overall, this state promotion of home ownership can have a positive impact on the real estate market in Switzerland.