How to use your Pillar 3a for a property purchase
- contact269677
- May 23
- 4 min read
Updated: May 24
Summary
Introduction
Buying your own home is one of life's most important projects. In Switzerland, Pillar 3a can play a key role in reducing real estate financing , reducing your tax bill, and building a solid deposit . This comprehensive guide (approximately 1,600 words) will explain how to use your Pillar 3a for a real estate purchase, the conditions, steps, and best strategies to optimize your financial package.
What is Pillar 3a?
Definition
Pillar 3a is a form of linked retirement savings, complementary to the first pillars (AHV/IV) and second pillar (occupational pension provision). It allows any Swiss tax resident to put money aside with significant tax benefits .
Voluntary savings : you choose the amount up to the legal limit.
Diversified investment : bank accounts, investment funds, stocks.
Locked until retirement : except for exceptions (purchase of housing, permanent departure from Switzerland, self-employment, etc.).
Tax benefits
Tax deduction : contributions paid are deductible from taxable income (up to CHF 7,056 in 2025 for employees, CHF 35,280 for the self-employed).
Tax-free growth : Interest and earnings are exempt from income tax during the savings phase.
Advantageous withdrawal tax : at the time of release, a reduced tax rate applies thanks to a special scale.
Using your Pillar 3a wisely for a property purchase allows you to benefit from tax savings during the savings phase and preferential treatment upon withdrawal.
Why use Pillar 3a for a property purchase?
Tax reduction
By capitalizing on your Pillar 3a each year, you directly reduce your taxable income . This tax saving is even more interesting if you are in a high tax bracket. For example: a payment of CHF 7,000 can represent a tax saving of CHF 1,500 to CHF 2,000 depending on your canton.
Constitution of a contribution
To obtain a mortgage , banks require a minimum personal contribution of 20% of the purchase price. Early withdrawal of your Pillar 3a is a simple solution to build up this contribution:
Guaranteed liquidity : you release your capital directly from your pension institution.
Security : unlike a consumer loan, Pillar 3a does not generate additional interest.
Terms and Conditions
Early redemption
The early redemption of Pillar 3a for a property purchase is regulated:
Proper residential function : the building must be intended for your main residence.
Limited quantity : you can unlock your entire Pillar 3a or make a partial withdrawal.
Deadline : the request must be made before the signing of the authentic deed (at the notary).
Note: if you are financing a jointly owned property, each owner can unlock their Pillar 3a independently.
Ceilings and limits
No maximum withdrawal limit : you can withdraw your entire accumulated capital.
No retroactive payment : only the amount already accumulated can be released.
Withdrawal taxes : a withholding tax applies according to the cantonal scale (generally 2% to 8%).
Steps to unlock your Pillar 3a
Eligibility Check :
Your Pillar 3a has existed for at least five years.
The property is intended for your main residence.
Contact your institution :
Banks, insurance companies, pension funds.
Complete the early withdrawal form, specifying the real estate project.
Transmission to the notary :
The notary checks the conformity of the property.
He sends the release certificate to the pension fund.
Payment of funds :
The capital is paid directly into the notary's escrow account.
You can inject it into the purchase as soon as the deed is signed.
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Tips to optimize your real estate financing
1. Diversify Pillar 3a and the 2nd column
Combine Pillar 3a with a linked Pillar 2 pension plan (optional pension plan) to maximize your tax savings. Every cent saved contributes directly to reducing your debt ratio.
2. Plan the payments
Regular payments : Spread out your payments throughout the year to optimize interest capitalization.
Maximum payment : reach the legal ceiling each year to benefit from the maximum tax deduction.
3. Annual review
Review your strategy at the beginning of each year:
Adjust your payments according to the progress of your real estate project.
Compare Pillar 3a offers to benefit from the best conditions (fees, returns).
4. Simulate your overall budget
Beyond Pillar 3a, anticipate:
Notary and registration fees (~3%–5%).
Renovation or development costs.
Recurring charges (co-ownership charges, maintenance).
A complete simulation avoids unpleasant surprises and helps you negotiate your mortgage at the best rate.
Conclusion
Pillar 3a is a powerful lever for your property purchase :
It reduces your taxes from the moment you save.
It allows you to build up a secure and tax-advantageous contribution.
The early redemption process is quick and simple.
By planning your payments wisely and combining your Pillar 3a with other financing solutions, you maximize your chances of obtaining the best loan terms.
FAQ
Can Pillar 3a and other financing be combined?
Yes! You can use Pillar 3a as a down payment and supplement your financing with a first-rank mortgage and a second-rank loan if necessary. Just be careful not to exceed a debt-to-income ratio of 33%–35%.
What if the purchase doesn't go through?
If the purchase is canceled, the notary will return the unused capital to your pension fund. The conditions for re-blocking may vary depending on the institution, but generally the capital is reinstated to your Pillar 3a without penalty.
What happens in case of divorce?
Early withdrawal of Pillar 3a for real estate is considered a legal union. In the event of divorce, the division follows the rules of the matrimonial agreement or, failing that, the legal regime of participation in acquisitions.
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