Pillar 3a for home ownership: early withdrawal or pledging?
When buying a house, the choice between early withdrawal and pledging acts on taxes, mortgage and pension gap. Compando shows which variant fits your financing.
1. Can I use my Pillar 3a for home ownership?
Yes. For owner-occupied home ownership in Switzerland, you may use your pension capital. Pillar 3a is particularly well suited: withdrawn Pillar 3a funds count fully as hard equity. Pension fund money, by contrast, is not admitted for the mandatory 10 percent share.
The promotion of home ownership (WEF) is the statutory basis. The use is permitted for:
- purchase or construction of a home
- value-adding renovation or conversion
- amortisation of an existing mortgage
- participation in a housing cooperative
The use is not permitted for holiday or second homes and investment properties. For the mortgage you need at least 20 percent equity, of which 10 percent from hard equity outside the pension fund. Your Pillar 3a eases both through the withdrawal and a lower mortgage. In case of a later emigration, special rules also apply to the withdrawal.
2. Early withdrawal or pledging: which is better?
When buying a house, Pillar 3a can be used in three ways: with the early withdrawal you have the balance paid out, with pledging it stays as collateral and amortisation reduces the mortgage directly or indirectly. Which variant fits depends on your asset situation.
The advantages and disadvantages at a glance
3. When can I withdraw Pillar 3a for home ownership?
For the early withdrawal, few but clear rules apply. You may only withdraw for owner-occupied home ownership; an early withdrawal is moreover possible at most every five years.
Unlike the pension fund, there is no minimum amount with Pillar 3a. You can therefore also withdraw smaller amounts. Upwards, the withdrawal is limited by your existing balance.
A partial withdrawal is only possible up to five years before the reference age. After that, only the entire balance of an account can be withdrawn. Those who hold multiple 3a accounts stay more flexible here. If you are married, the withdrawal also requires the written consent of your spouse.
4. What taxes apply on the early withdrawal?
The early withdrawal is taxed as a capital benefit, separately from income and at a reduced rate. At an early withdrawal of CHF 80'000, around CHF 2'500 to CHF 6'000 in capital withdrawal tax apply; the exact amount depends on your canton of residence. Plan this amount into your financing.
Early withdrawal | Capital withdrawal tax |
|---|---|
CHF 50'000 | around CHF 1'500 to 4'000 |
CHF 80'000 | around CHF 2'500 to 6'000 |
CHF 100'000 | around CHF 3'500 to 7'500 |
You can find out the exact level for your canton of residence from your cantonal tax administration. With pledging, no tax applies as long as the balance is not withdrawn.
5. Do I have to repay the early withdrawal?
No. With Pillar 3a there is no statutory repayment obligation. This distinguishes it fundamentally from the pension fund, where you must repay the early withdrawal when selling the property.
After an early withdrawal, you can continue to contribute to Pillar 3a up to the annual maximum contribution. The resulting pension gap, however, does not close by itself, but only when you compensate the withdrawn amount with additional contributions. Plan the gap consciously and close it step by step with consistent continued contributions. The early withdrawal is not risk-free equity, but a conscious pension decision.
Calculate your possible Pillar 3a assets
Whether you plan an early withdrawal or simply want to keep an eye on your pension: how much wealth your Pillar 3a builds over the years is shown by the calculator.
