Swiss pension fund benefits and pillar 3a retirement savings can be withdrawn early to buy or maintain your own home. Find answers to the most important questions in this guide.
Switzerland’s laws aimed at promoting home ownership (German: Wohneigentümsförderung, French: Accession à la propriété du logement) allow you to withdraw tax-privileged Swiss retirement savings early in order to buy your own home. Here, moneyland.ch answers the most important questions about using Swiss retirement savings to buy a home.
What can Swiss retirement savings be used for with regards to home ownership?
You can make early withdrawals from your pension fund and/or pillar 3a savings for these purposes:
To buy one single-family home or apartment which will be your primary residence
To make a down payment for a mortgage on your primary residence
To pay off a mortgage on your primary residence
To renovate your primary residence in order to maintain its value
To make improvements to your primary residence in order to increase its value
To buy shares in a housing cooperative from which you will rent your primary residence
To buy shares in a renter-owned housing corporation (French: Société Immobilière Actionnaire Locataire, German: Mieter-Aktiengesellschaft) from which you will rent your primary residence
To grant a profit-participation loan to a non-profit housing development company (French: organisme de construction d'utilité publique,German: gemeinnützigen Wohnbauträger) from which you will obtain the use of your primary residence
In the case of home ownership, the property in question can be either a freehold or a leasehold property.
Apart from home ownership, there are some other situations in which you can withdraw pillar 3a savings early. You can learn about those in the guide to early pillar 3a withdrawals.
Which kinds of retirement savings can I use to buy a home?
Both benefits from your Swiss occupational pension fund (including vested benefits) and tax-privileged Swiss retirement savings (pillar 3a) can be withdrawn before you reach standard retirement age, if the money will be used to finance a home. But rules and limitations for pension fund withdrawals are different from those which apply to the pillar 3a.
Overview of the home ownership withdrawal rules for Swiss pension fund benefits and pillar 3a retirement savings:
| Occupational pension fund and vested benefits (pillar 2) |
Voluntary retirement savings (pillar 3a) |
|
|---|---|---|
| Age limits | Withdrawing all of your benefits for home ownership is only possible until the age of 50. After that, withdrawals are limited to either:
make withdrawals for home ownership. But depending on your pension fund, you may be able to withdraw benefits as a lump sum. |
Withdrawals for home ownership are After that, you are legally entitled to |
| Withdrawals | The minimum withdrawal you can make is 20,000 francs. It is possible to withdraw just part of your pension benefits or vested benefits account balance. |
There is no minimum for pillar 3a withdrawals. It is possible to withdraw just part of the balance of a pillar 3a account. |
| Frequency of withdrawals |
You can make one withdrawal every five years. |
You can make one withdrawal every five years. |
| Taxes for withdrawals |
|
|
| Notary entries | Early withdrawals of pension benefits for home ownership are recorded in the land registry. |
Early Pillar 3a withdrawals for home ownership are not recorded in the land registry. |
| Repayments |
You can make voluntary repayments to your pension The capital withdrawal tax paid when you withdrew You can only repay home ownership withdrawals |
You cannot repay pillar 3a benefits once withdrawn for home ownership. Because of this, you cannot reclaim the capital withdrawal tax. |
| Down payments |
You can use pension fund benefits for up to half of The limit may deviate from this standard if the down |
There is no limitation on what portion of Pillar 3a savings can be used to cover the |
| Co-owned properties |
Pension fund benefits and pillar 3a savings can only be used for a jointly-owned property if Withdrawals can be used to finance an apartment in a condominium, as long as you are the |
|
Which rules apply to homes financed with Swiss retirement savings?
If you withdraw pillar 2 or pillar 3a savings before retirement in order to buy, renovate, or modify a home, that home will be subject to certain rules. It is important to understand these rules before deciding whether or not to use Swiss retirement savings for home ownership.
Overview of the rules which apply to homes financed with Swiss pension fund benefits and pillar 3a savings:
| Occupational pension fund and vested benefits (pillar 2) |
Voluntary retirement savings (pillar 3a) |
|
|---|---|---|
| Renting out the property |
A primary requirement for making a withdrawal is You may temporarily rent out the property at a |
There are no limitations on There are no limitations on |
| Selling the property |
If you sell the property, you must repay all the If you plan to buy a different property in the These limitations only apply until you reach |
There are no limitations on selling a property financed with pillar 3a assets. It is not possible to return money to the pillar 3a. |
|
Inheriting and gifting |
Properties financed using withdrawn pension If your heir sells the property to a third party You also have to repay the withdrawn |
There are no special limitations on inheriting or gifting properties financed with pillar 3a assets. |
What does withdrawing Swiss retirement savings for home ownership cost?
Swiss pension funds and vested benefits foundations generally charge a fee when you withdraw money to buy a home. This fee typically ranges between 200 and 400 francs per withdrawal. You can find the exact fees for early withdrawals to buy property on the product details pages in the vested benefits account comparison on moneyland.ch.
Many pillar 3a savings accounts, pillar 3a asset management services, and pillar 3a permanent life insurance offers have fees for early withdrawals for home ownership. Fees charged by retirement accounts are shown in the “Advance withdrawal – property” field on the details pages of offers in the pillar 3a retirement account comparison on moneyland.ch.
Can I use Swiss retirement savings for a home outside of Switzerland?
Yes. As long as the property in question will be or is being used as your primary residence, you can withdraw Swiss pension fund benefits to finance a home purchase, mortgage payments, and renovations or alterations.
The rules vary depending on your situation and on which country you live in and which kinds of Swiss retirement savings you want to withdraw.
Pillar 3a and voluntary pension fund benefits
If you live outside of Switzerland, you are generally entitled to withdraw Swiss pillar 3a savings and the portion of your Swiss vested benefits made up of voluntary contributions to your pension fund simply on account of living outside of Switzerland. You do not need to make special early withdrawals for home ownership, and there are no limitations on how you can use the money or properties purchased with it.
Compulsory pension fund benefits in EFTA and EU countries
If you live in a country which is a member of EFTA or the EU, you are not generally entitled to withdraw the portion of your Swiss pension fund benefits made up of compulsory contributions just on account of not living in Switzerland. However, you can make early withdrawals for home ownership, just as you would if you lived in Switzerland. The rules for properties in EFTA or EU countries are identical to those for properties in Switzerland. The difference is that limitations and repayment obligations only apply to the compulsory portion of pension fund benefits.
Compulsory pension fund benefits outside of EFTA and the EU
If you live in a country which is not in EFTA or the EU, you can withdraw your Swiss compulsory pension fund benefits simply on account of living outside of EFTA and the EU. You do not have to make a special early withdrawal for home ownership, and there are no special limitations for properties financed with compulsory Swiss pension fund benefits.
Cross-border workers
If you are a cross-border worker who works in Switzerland but lives in a neighboring country, you cannot withdraw benefits on account of not living in Switzerland. However, you can make early withdrawals from your Swiss pension fund benefits and pillar 3a savings for home ownership. The rules are identical to those for properties in Switzerland.
Important: Withdrawing your vested benefits and/or pillar 3a savings may have tax implications for you in your home country. Make sure to look into your country’s tax rules governing withdrawals of foreign retirement savings and possible tax deductions or exemptions for home ownership.
What should we pay attention to when buying property as a couple?
If you are married or in a registered partnership, then your spouse has to give their consent before you can withdraw pension fund benefits or pillar 3a savings for home ownership.
The five-year limit for home ownership withdrawals applies to each spouse individually. So you and your spouse can each make one withdrawal from your separate retirement savings every five years.
If you end up divorcing before you become eligible to claim a pension (at retirement age, for example), pension benefits and pillar 3a savings which you accumulate during your marriage are split between you. Benefits withdrawn for home ownership are accounted for when dividing assets.
Withdrawing invested pillar 3a savings and vested benefits
If you invest your vested benefits or pillar 3a savings using retirement funds or retirement asset management solutions, it is important to carefully plan any early withdrawals. When you request a withdrawal for home ownership, the bank or other service provider sells your investments and transfers the money earned into the linked pillar 3a or vested benefits account. If you make a withdrawal at a time when the market is struggling and the value of your assets is low, your investments may end up being sold at a loss.
Only withdraw invested retirement assets for home ownership if doing so will not result in a capital loss. Because markets are prone to fluctuations, it is generally not a good idea to invest pillar 3a savings or vested benefits if you plan on withdrawing them for home ownership in the near future (minimum 5-10 years). Vested benefits accounts and pillar 3a savings accounts are more suitable for holding Swiss retirement savings over shorter terms.
Can I pledge Swiss retirement savings instead of withdrawing them?
Yes. Pension fund benefits (including vested benefits) and pillar 3a savings can be pledged as collateral towards home ownership financing. The rules are identical to those governing home ownership withdrawals. However, the five-year limit for withdrawals does not apply to pledging. Pledges can be made on a one-off basis (towards a down-payment, for example), or on an ongoing basis (for indirect amortization, for example).
More on this topic:
Indirect amortization of mortgages explained
Guide to withdrawing pillar 3a retirement savings early
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