EPL: withdrawing your 2nd pillar to buy your main residence.
Home Ownership Promotion (EPL/WEF) lets you unlock your LPP to buy, build, or repay. Here are the rules, age-based ceilings, taxation, and pitfalls.
You want to use your 2nd pillar to become a homeowner in Switzerland. It is a right, framed by LPP articles 30a to 30g — the scheme is called EPL (Home Ownership Promotion / WEF). Before you sign, here are the rules, the ceilings, and especially the pitfalls that are not on your bank's leaflet.
What can you withdraw for?
EPL only covers your main residence in Switzerland or abroad. Four authorized uses:
- Acquisition of a dwelling (apartment or house) in direct ownership.
- Construction of a single-family home.
- Repayment of a mortgage loan (direct amortization).
- Acquisition of shares in a housing cooperative (with a specific minimum withdrawal, see below).
Ceiling and frequency rules
| Parameter | Rule | Source |
|---|---|---|
| Minimum amount | CHF 20,000 (except cooperative shares: CHF 5,000) | OEPL art. 5 |
| Frequency | One withdrawal every 5 years (per fund) | LPP art. 30c para. 4 |
| Before age 50 | Total amount available (up to all vested benefits) | LPP art. 30c para. 1 |
| After age 50 | Maximum = max(assets at 50, 50% of current assets) | LPP art. 30c para. 2 |
| Spouse consent | Mandatory if married or in registered partnership | LPP art. 30c para. 5 |
The 50-year rule is crucial and often misunderstood. After age 50, you cannot withdraw all of your LPP. The limit is the higher of two amounts: your assets at age 50, or half of your current assets.
Marie has LPP assets of CHF 320,000 today. At 50, her assets were CHF 240,000. She wants to know how much she can withdraw to amortize.
- Current assets
- CHF 320,000
- Assets at 50
- CHF 240,000
- 50% of current assets
- CHF 160,000
- Maximum withdrawable
- CHF 240,000 the higher of the two: assets at 50
- Remains locked until retirement
- CHF 80,000 CHF 320,000 − CHF 240,000
The procedure step by step
From filing to actual payment, count 8 to 12 weeks depending on the foundation and file complexity.
Gather the documents
~1 weekPurchase promise or preliminary contract, plans, certificate of use as main residence, ID, foundation's application form, written consent of the spouse if married.Apply to the fund / foundation
ImmediateSend the complete file to the active pension fund OR the vested benefits foundation that holds the assets. Many funds have a dedicated form.Review and statement
4-6 weeksThe foundation verifies eligibility, calculates the maximum payable amount, prepares the tax statement (tax at source). You receive a written decision with the net amount after tax.Land registry entry
VariableEntry of a restriction on alienation in the land registry — you will not be able to sell the property without repaying the EPL first. The notary handles this.Payment to your notary
~2 weeksThe money is transferred directly to the notary's account (never to yours). They use it to settle the purchase price or amortize the mortgage on the signing day.Tax return
Year of withdrawalThe withdrawn amount is taxed at source (separate pension rate). You declare the withdrawal to your tax administration in the annual return. The foundation provides the source-tax certificate.
Taxation: lighter, but not neutral
The EPL withdrawal is taxed at source by the foundation's canton, at a pension rate separate from ordinary income. This rate is progressive on the withdrawal amount, but well below the ordinary scale. For a CHF 200,000 withdrawal, count by canton:
| Foundation canton | Indicative rate | Approximate tax |
|---|---|---|
| Schwyz, Zug, Nidwalden | ~4 to 5% | ~CHF 8,000 to 10,000 |
| Vaud, Berne | ~5 to 7% | ~CHF 10,000 to 14,000 |
| Geneva, Basel-City, Zurich | ~7 to 10% | ~CHF 14,000 to 20,000 |
The trap of repayment and lost interest
EPL is not a gift: it is money missing from your 2nd pillar, no longer generating compound interest over the period. In the long run, it reduces your future retirement pension. Three nuances:
- You can voluntarily repay all or part of the withdrawn amount (in tranches of at least CHF 10,000), at any time up to 3 years before retirement.
- In case of repayment, you can ask the foundation for a refund of the source tax you had paid — within 3 years, with supporting documents.
- Direct amortization via EPL is less tax-efficient than indirect amortization via 3a — if your main goal is tax optimization, EPL is not the most efficient tool.
EPL or pledge: what to choose
The alternative to early withdrawal is the pledge of the 2nd pillar. The bank treats the LPP assets as additional collateral, without withdrawing them. The advantages:
- No immediate tax (LPP stays in the foundation and continues to earn interest).
- Your risk benefits (death, disability) are not reduced.
- Reversible: the pledge can be released later, without fees.
Main downside: the bank often requires a larger classic amortization (cash contributions). To be calculated case by case with your bank.
- 01EPL lets you withdraw your 2nd pillar to buy, build, or repay a main residence only.
- 02Ceiling before 50 = full assets. After 50 = max(assets at 50, 50% of current assets).
- 03Tax at source at the pension rate, in the foundation's canton. Optimization possible via prior transfer.
- 04Long-term consequences: reduced retirement pension, reduced risk benefits. Compare with pledge before deciding.
To understand the cantonal taxation of the withdrawal, see our canton comparison. To anticipate the retirement choice (annuity vs lump sum), our dedicated article. And for the general context, the introduction to the 2nd pillar.