Roger Lüdi, Head of Taxes and Succession at Graubündner Kantonalbank
When it comes to owning your own home, personal feelings can be the trigger for an investment. Maybe the quality of living is no longer right or the property should be upgraded. However, environmental considerations can also be a reason for a renovation, because sustainability is becoming more important.
Additional aspects that should be included in the decision-making process are the tax deduction options and any subsidies for sustainable investments. These decisions require expert advice from building experts as well as tax and financial specialists.
Save taxes through renovation
In Graubünden, all energy-saving and environmental protection measures can be deducted from income taxes, just like maintenance costs. In this way, these expenses can be financed at least in part through tax savings.
Another attractive tax advantage in the case of high real estate expenses is a kind of “loss carryforward”. The high costs can thus be offset against the income of a maximum of three tax years. Negative tax income resulting from investments in energy saving and environmental protection is carried over to the next two tax years at most.
Invest despite rising mortgage interest rates
Mortgage interest rates have risen rapidly in a short period of time. In Switzerland, too, homeowners are feeling a certain degree of uncertainty about the higher mortgage interest rates. With an interest rate of currently around 3 percent for a 10-year mortgage, the interest rate is still below the average for the last 30 years. Property owners experience partial relief for the rising interest rates with income taxes: the interest paid on debt can be deducted from income, which reduces the tax burden.
More funding thanks to the Green Deal
The first stage of the Green Deal decided by the Grand Council is in full swing. To date, many homeowners have benefited from additional subsidies.
The Office for Energy and Transport (AEV) has increased all funding contributions of the existing programs by a bonus. The surcharge is 100 percent for building services and 50 percent for improvements to the building envelope. This increases the incentive for homeowners to modernize their properties and use renewable energies.
Right timing and advice
The focus is on the needs of the property owner and how urgent a renovation is. Thanks to the higher support from subsidies and the new tax options, it can be worthwhile to bring the investments forward, despite higher mortgage interest rates. These increases in the first stage are planned until 2024. The AEV is convinced that this campaign can make a contribution to reducing CO2.
Optimization always begins with planning. A consultation with the AEV forms the basis for obtaining funding, even before the implementation of the project begins. From a tax point of view, optimal planning is followed by the correct declaration. The burden of proof lies with the taxpayer and the tax authorities require that the cost of saving energy is reported separately from the other costs. Expert advice therefore helps in three ways: to receive subsidies, to reduce tax bills and to do something good for the environment. As a nice side effect, the value of the property increases as a result of the renovation.
Graubünden Cantonal Bank
www.gkb.ch/greendeal
2023-06-09 01:35:25
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