How to better manage your tax payments with indirect depreciation?

by Kevin Rossier, www.hypo-advisors.ch

When taking down a mortgage you need to address the terms of repayment. Is it more efficient to reduce the amount owned and thus pay less interest, or is it more efficient to keep it at the same level and thus de able to deduct larger interest payment expenses from your tax bill?

There is no right or wrong answer to this question and therefore an in-depth analysis of your overall situation needs to be done.

The only answer that never changes and is always in your favour is to make contributions to your retirement plan (3eme Pillier).  These contributions are fully tax deductible.

Every personal situation is obviously different, but by doing this you will be “indirectly” repaying your mortgage.  In this case the principal owed on the mortgage will remain constant and you will be able to take advantage of the largest tax deduction on interest and thus reduce your tax bill while creating a fund to repay your mortgage at the same time.