If you have a holiday home in Switzerland, you can consider yourself lucky: increased everyday freedom and flexibility enable you to work where others go on holiday. But what if your holiday home is vacant for most of the year? Is it worth renting it out?
Anyone who’s in a position to do so buys a second home in the Swiss mountains or Ticino, because owning a holiday home is more popular than ever. Owning a home in a tourist spot allows you to enjoy complete freedom: you can spontaneously get away for the weekend, remain there for an extended period and work from home, or enjoy spending time in natural surroundings with friends and family. Since the start of the pandemic, in particular, the desire to take holidays within Switzerland has increased enormously. In addition, remote working is possible in most professions, allowing you to spend longer in the mountains or Ticino. Despite these flexible working conditions, however, second homes are vacant for most of the year. Some owners are wondering whether it’s worth renting out their home on a temporary basis. What are the pros and cons?
The biggest benefit of renting out your second home on a temporary basis is the additional income, of course. This usually allows you to use the rental income to completely cover the running costs for repairs, mortgage repayments and maintenance. Depending on the location and season, you can also demand significantly higher rents, thereby turning your second home into an investment property, at least temporarily. Homes in popular tourist spots such as St. Moritz, Zermatt or Ascona, for example, are rarely vacant and generate substantial rental income, especially during the school holidays.
Of course, there are downsides too – especially if you bought your holiday home primarily for your own use. Lots of people cannot imagine allowing strangers to use their home and having to repeatedly put away personal items such as clothing, toothbrushes, etc. Your furniture may also be damaged, or even the building itself. In addition, you’ll have to be more organised, of course, and may no longer be able to spontaneously spend the weekend in your holiday home. And last but not least, renting out your home also involves a great deal of administrative effort. Marketing, answering inquires, arranging maintenance and end-of-occupancy cleaning are just a few of the associated tasks. Do you have a local contact who can handle occupants’ queries for a small fee? This would help to reduce the workload.
In Switzerland, you always pay the imputed rental value when you own a property – regardless of whether it’s your permanent residence or not. If you rent out your home on a temporary basis, the proportion of calculated imputed rental value will decrease. However, you’ll have to pay tax on any rental revenue, as this counts as income, which may increase your tax bill, depending on your circumstances and how things progress.
Are you looking to fulfil your dream of a second home in the mountains or Ticino? We’ll gladly help with your search free of charge. Thanks to our global network, apartments in popular locations are often sold without being listed online. So please don’t hesitate to get in touch with your nearest Engel & Völkers shop. Our property experts will answer all your questions and help you find your dream home!
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