Residential PropertyWEF Advance Withdrawal

WEF Advance Withdrawal

A part or all of your retirement capital will be paid out for an advance withdrawal.

Advantages of Advance Withdrawal

  • Higher equity capital
  • Lower mortgage payments
  • Less debit interest
  • Tax progression can be reduced through advance withdrawals if a lump-sum withdrawal is planned at retirement or envisaged under the Pension Fund's regulations

Disadvantages of Advance Withdrawal

  • Immediate taxation on the sum withdrawn
  • Reduced retirement pension on retirement, survivors' benefits lower
  • Lower debit interest deductible from income subject to tax
  • Repayment obligation if residential property is no longer owner-occupied
  • It is only possible to make tax-effective purchases of pension benefits when the advance withdrawal is paid back

Amount of the Advance Withdrawal

The total pension capital available to you for the promotion of home ownership is shown on your insurance certificate under "Amount available for home ownership." The basic conditions are:

  • Until the age of 50 you can withdraw the whole of your retirement savings capital.
  • Thereafter you can make an advance withdrawal up to the amount of capital you had accrued at age 50, or half of your current retirement savings capital – whichever is the higher.
  • The minimum advance withdrawal is CHF 20,000, but this does not apply to the purchase of participation certificates in a cooperative housing association or similar participations.

Procedure

To carry out the calculation we need to know the amount of the advance withdrawal and the expected payout date. If you decide in favor of an advance withdrawal, we send you the necessary forms. We charge you the administrative costs for making the requisite land record entry amounting to CHF 200.

To check the intended purpose of the withdrawal, we will require the following documents: 

Sale of Residential Property

The pension assets invested in your residential property may be used solely for owner-occupied residential property. The sale of the residential property is not permitted without the consent of the Pension Fund. This restriction can be removed if you have repaid the advance withdrawal or an insured event has occurred in the meantime (retirement, disability, death). Renting out your home is deemed equivalent to a sale.

In contrast, transferring your home to a pension beneficiary – such as your spouse, for example – is not equivalent to a sale. But this person is still subject to the same restrictions on the right of disposal as you are.