Residential property

Financing is the first and last hurdle to overcome when acquiring residential property. If the available funds are insufficient, an advance withdrawal or pledge of Pillar 2 assets may well be an alternative worth considering. This can open up a range of options, provided affordability is not endangered.

What is allowed? What is not allowed?

The law promotes the acquisition of owner-occupied residential property using money from your occupational benefits insurance. However, this right comes with certain obligations and restrictions.

Permitted means and purposes of use

In the context of the statutory promotion of homeownership, the following means may be used for financing the purchase of residential property:

Mandatory occupational benefits insurance
Extra-mandatory occupational benefits insurance
Vested benefits accounts
Vested benefits policies

Permitted purposes of use:

Purchasing or constructing owner-occupied property
Investing in an own home
Repaying a mortgage
Purchasing shares in a housing cooperative or similar investment

Non-permitted purposes of use:

Financing the usual maintenance costs of residential property
Payment of mortgage interest
Financing of vacation apartments
Real estate abroad, if not the same as domicile

Own capital through advance withdrawal

Good planning is needed if you wish to realize your dream of home ownership. Including financially. What’s important is to realistically estimate the costs, and to understand the implications and the correct procedure. The first of two possibilities for raising capital is advance withdrawal from your pension fund.

Advance withdrawal of pension fund assets

An advance withdrawal is possible every 5 years – until 3 years before regular retirement. But you need to be careful: Have you purchased any contribution years from your pension fund within the last three years? If so, you cannot withdraw the amount from your pension plan for three years from the date when you purchased contribution years.

Requirements

You have already accrued retirement assets of more than CHF 20,000 in the pension fund.
You are not disabled.
Retirement is at least three years away.
Your last advance withdrawal took place more than five years ago.

Minimum amount

CHF 20,000

Maximum amount

Until age 50, the maximum amount is equal to your total vested benefits. Afterwards, you receive as a maximum the larger of the following amounts:

The vested benefits at age 50
Half of the vested benefits at the time of the pledge

Implications

A reduction in future retirement pensions
Reduced benefits on disability or death
Taxes: The pension fund will automatically inform the Swiss Federal Tax Administration of the advance withdrawal within 30 days. The capital that you have withdrawn in advance must be declared as a lump-sum payment from your retirement assets.
Sales restrictions in the land register: If you buy your own home with the help of an advance withdrawal, a sales restriction is entered in the land register. If you sell your home at a later stage, the advance withdrawal has to be repaid to the occupational benefits institution.

Repayment

As soon as the conditions for an advance withdrawal are no longer met, the amount must be repaid to the occupational benefits institution.

Procedure

With a request and all required documents (e.g. a valid purchase contract, building permit or extract from the land register, etc.) you confirm to the pension fund that you meet the conditions for an advance withdrawal. If you are married, you also require the written agreement of your spouse.

Recommendation

Protect yourself against reductions in benefits in case of disability or death with occupational disability insurance and / or whole life insurance.

The new myAXA pensions portal

Anyone who works for a company whose pension fund is managed by AXA can benefit from many advantages. Because the insured employees have access to the myAXA pensions portal. Thanks to this online portal, you - as an employee - can take the planning of your pension provision and the calculation of possible future scenarios into your own hands. Otherwise you have to ask your employer or your HR department for the relevant information.

The benefits of the myAXA pensions portal

Clarity: Employees can view all the information on their pension fund online in myAXA at any time – with simple and clear explanations.
Better planning for the future: In myAXA it is possible to calculate the impact on pension benefits of an advance withdrawal for the purchase of residential property or of a voluntary payment for tax optimization purposes.
Potential purchases: Thanks to myAXA it is possible to identify and close pension gaps.

From the end of 2017 or at the latest at the start of 2018, the insured in an AXA pension fund will benefit from the advantages of the new pensions portal on myAXA. You will receive a letter from AXA with the access data that allows you to register with myAXA with just a few clicks.

To the myAXA pensions portal

Support and frequently asked questions

Is it possible to withdraw funds for renovation work that preserves rather than adds value?

Yes, you can withdraw funds in advance to preserve the value of your home.
I have the opportunity to buy a house with two apartments. Can I finance it with an advance withdrawal?

An advance withdrawal can be used only to finance the part of the property in which you live.

An example:
A married couple is planning to buy a house valued at CHF 500,000. Each partner wants a 50% share of the property. Each spouse can withdraw a maximum of CHF 250,000, even if their total available vested benefits are higher. If the amount of vested benefits is lower, they can withdraw only up to the total amount.
Our community of heirs together owns a plot of land. As a member of that community, I would like to buy the plot together with the house. Is an advance withdrawal possible?

No. Advance withdrawals are possible only if the jointly owned property is split among spouses or registered partners.
Does the maximum advance withdrawal for persons above age 50 also apply in the case of vested benefits policies and accounts?
Yes. Here too the maximum amount is the larger of:
- The vested benefits at age 50
- Half of the vested benefits at the time of the pledge

Does the CHF 20,000 minimum also apply to vested benefits policies and accounts?

No. There is no minimum for advance withdrawals from vested benefits policies and accounts.
Can someone with a full IV pension withdraw pension fund assets in order to purchase residential property?

No, unfortunately that's not possible.
Can a foreign citizen make an advance withdrawal of pension fund assets in order to finance a home in his country of origin?

Yes, if the family (spouse/children) of the person in question lives in the house and the applicant regularly spends time there.