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Comment by alecco | Hacker News Reader

Buy a small place enough to live. If you take a mortgage pay it as soon as possible to be debt-free. Then invest in diverse things with best return while being tax smart. Perhaps barbell method.

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My understanding is that's not a wise Swiss-property investment strategy (the subject of this article after all...). There, the combination of no capital gain taxes, a tax on wealth, very-low-and-stable interest rates means that one should take an interest-only-mortgage and invest what would have otherwise been your principal payments...

Tax on wealth is really low unless you have millions.

This is a quite common myth that is factually wrong. It's the main way for a private wealth advisors to talk somebody into a unecessary mortage.

The interest rate on mortages is always higher compared to the interest rate on leverage for stock (by using the stock itself as collateral).

You can get close to the yield on swiss confederation bonds if you buy well priced, leveraged ETFs.

Obviously that interest rate is as stable if not more stable than the interest rates on mortages.

Please DO NOT buy stocks with money from a mortage. you're just giving up at least 1% yield.

> leverage for stock

Please note that with leverage (stocks or real estate) is is possible to lose more money than you invest.

Switzerland makes home owners pay taxes as if they rented the house out for 12 months each year. This could add a nice chunk to your net cost of owning.

Which I guess most landlords would simply pass on to the tenants?

It's rent adjusted. So if everyone passes it on to the tennants they end up paying more tax.

Nope, that's not how prices are set.

https://www.quora.com/How-does-a-land-value-tax-not-create-d...

If they rent it they pay income tax anyway (or rather the company that owns the place does). The "virtual rent" added to income is for people who own the place where they live.

Switzerland is not very home ownership friendly, at least there are very little tax incentives for it (personally I'd rather have people invest their wealth into productive things rather than real estate, so I find it good). In large cities most places are owned by banks/insurances/other real estate companies and rented out.

I wouldn't call not giving special privileges to home owners over renters unfriendly, I'd call it neutral and fair.

They didn't say it was unfriendly, they said it was not friendly. So, neutral.

That's a distinction without a difference, they mean the same thing. Not friendly does not imply neutral, it implies not friendly. If I said don't walk through that neighborhood it's not friendly, you would not interpret that as saying it's neutral.

Wouldn't it be more accurate to say they don't give special treatment to home owners over renters? Sounds more fair to me.

That's the reason why Switzerland has such a high per capita debt [1]. You can deduct your interest payments from the tax payments. So there is an interest to stay indebted for homeowners. My parents own a house that they inherited from my grandparents including a debt but both wouldn't pay off the mortgage because of tax reasons.

[1] https://www.swissinfo.ch/eng/wealth-ranking_swiss-are-world-...

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