Building up a sufficient personal down payment is often the main obstacle to becoming a homeowner. For cross-border workers and Swiss expats, a powerful solution exists: mobilizing the capital accumulated in the Swiss pension fund (2nd Pillar / BVG) to acquire property outside Switzerland.
This legal provision, called WEF (Home Ownership Encouragement), makes the real estate dream come true for many families. However, transferring such sums from Switzerland to your home country requires mastering strict legal rules, complex cross-taxation, and avoiding the devastating trap of bank exchange rates.
📌 2nd Pillar withdrawal for real estate at a glance👉 Condition #1: The property abroad must be your primary residence (no rental or second homes).
👉 The amount: Minimum withdrawal of 20,000 CHF. After age 50, the withdrawable amount is capped.
👉 Taxation: Withholding tax in Switzerland, then declaration in your country of residence (France, Germany, Italy, etc.). The Swiss tax can generally be refunded later.
👉 The Notary Trap: If your pension fund transfers CHF directly to a foreign notary's euro account, their bank will apply a disastrous exchange rate. A frequent loss of 2,000 € to 5,000 € on the down payment.
👉 The solution: Route the funds through a currency specialist like ibani.
1. Legal conditions for WEF abroad
Swiss law authorizes the early release of occupational pension assets (BVG) to buy a home, including across Swiss borders.
Eligibility rules:
- Primary Residence Only: You (and/or your family) must live in this accommodation permanently. It is strictly forbidden to use the BVG to finance a second home or rental investment.
- Amounts and ages: The minimum withdrawal is 20,000 CHF. Until you turn 50, you can withdraw your entire vested benefits. After age 50, the withdrawal is limited.
- Spousal consent: If you are married or in a registered partnership, the written consent of your spouse is mandatory.
- Restriction on sale: A "restriction on the right of disposal" is registered. If you resell the property later, you will generally have to repay the withdrawn amount to your pension fund.
2. Capital Withdrawal vs. Pledging: What to choose?
The WEF offers you two very different mechanisms to help finance your real estate.
| Early Withdrawal | Pledging |
|---|
| The money physically leaves your pension fund to pay the seller or notary. | The money stays in the pension fund. It serves as a guarantee (collateral) for your lending bank. |
| Advantage: Creates a direct personal down payment, reduces the amount to borrow from the bank. | Advantage: The capital continues to grow and retirement benefits are not reduced. No immediate tax to pay. |
| Disadvantage: Drastically reduces your future retirement pension. You must pay immediate tax. | Disadvantage: You still have to pay bank interest on the entire price of the house. |
In many EU countries, traditional banks are reluctant to accept a pledge on a foreign pension fund. Withdrawal is therefore the method most commonly used by expats.
3. Focus: Taxation and double taxation
If you reside outside Switzerland and proceed with the withdrawal of your 2nd pillar, the paid capital is considered income and will be taxed according to international double taxation avoidance treaties.
The general 3-step mechanism:
- Withholding tax (Switzerland): Upon payment, the Swiss pension fund deducts a withholding tax. The rate depends on the canton where the pension foundation is headquartered.
- Taxation in your home country: You must declare this capital to the tax authorities of your country of residence (e.g., France, Germany, Italy). They will apply their national tax rate (which can be a flat rate or progressive depending on local laws).
- The Swiss refund: Once the foreign tax notice is received, you must send a refund request to the relevant Swiss tax administration to get the initially deducted Swiss tax back.
4. The ibani Hack: Don't lose €3,000 on your down payment
Transferring a BVG down payment of 150,000 CHF from Switzerland to a foreign notary's euro account is the stage where many buyers lose a lot of money without realizing it.
💡 The classic bank transfer trap:You ask your pension fund to transfer the 150,000 CHF directly to the foreign IBAN of the notary. The notary receives Swiss francs. Their bank will apply a "counter" exchange rate with a high margin (often between 1.5% and 2.5%). On 150,000 CHF, you just lost between 2,250 € and 3,750 € in real estate purchasing power!
🚀 The secure solution for large volumes (ibani):- The transit account: You open a free ibani account and get a Swiss IBAN (CH).
- The BVG payment: The pension fund pays the 150,000 CHF free of charge to this Swiss ibani IBAN.
- Transparent exchange and sending: ibani converts the sum at the real interbank market rate with a clear and extremely reduced margin, and makes the SEPA transfer in euros to the foreign notary's account. Your down payment is optimized, and you saved the equivalent of your real estate agency fees.
Secure your real estate project
For large transfers (BVG, inheritance, real estate sale), the exchange rate should not be left to chance. Contact our team to plan your transfer with peace of mind.
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8 minutes read | Updated on February 20, 2026