Using Pillar 3a to buy a home in Switzerland: rules and downsides

The short answer

Yes, Pillar 3a money can go into your own home. The ordinance on Pillar 3a (BVV 3) allows an early payout to buy or build owner-occupied property, to buy shares in owner-occupied housing (for example in a housing cooperative) and to repay a mortgage loan. You can claim such a payout once every five years (Art. 3 para. 3 and 4 BVV 3). Instead of withdrawing, you can also pledge your Pillar 3a savings to the lender (Art. 4 para. 2 BVV 3).

The catch: a withdrawal is taxed in the year you take it, and the money cannot go back into Pillar 3a later. The cantonal tax office of Aargau states this plainly in its leaflet on home ownership and pension money: repaying Pillar 3a withdrawals is not possible (Aargau tax office, leaflet as of 1 January 2026). What you take out for the house is gone from your retirement savings for good.

How Pillar 3a works in general, including the tax saving on your contributions, is explained on our page Pillar 3a in Switzerland.

What counts as owner-occupied property

For Pillar 3a, the terms “home ownership”, “participations” and “own use” follow the ordinance on home ownership promotion with pension money (WEFV, Art. 2 to 4), as Art. 3 para. 5 BVV 3 specifies:

• Property: a flat or a single-family house.
• Forms of ownership: sole ownership, co-ownership (in particular condominium ownership, Stockwerkeigentum), joint ownership with your spouse or registered partner, and an independent and permanent building right (Baurecht).
• Participations: shares in a housing cooperative, shares in a tenants’ public limited company and participating loans to a non-profit housing developer.
• Own use: you live in the property at your place of residence or habitual abode. If you can show that you temporarily cannot live there, you may rent it out during that time.

A holiday flat or a flat you buy to let out does not meet the “own use” definition.

How often, and until when

Every five years. BVV 3 allows an early payout for home ownership once every five years (Art. 3 para. 4 BVV 3). According to the Aargau tax office, the five-year interval applies to all your Pillar 3a accounts together, not to each account on its own, while Pillar 3a and your pension fund (2nd pillar) are looked at separately (Aargau leaflet, sections 3 and 5).

Until five years before the reference age. The same leaflet states that a home ownership payout can be claimed at the latest five years before you reach the AHV reference age. From that point on you can draw your Pillar 3a as a regular retirement benefit anyway: BVV 3 allows retirement benefits from five years before the reference age (Art. 3 para. 1 BVV 3).

The whole account. The federal portal ch.ch states that you must withdraw the entire amount when you withdraw Pillar 3a savings (ch.ch: the 3rd pillar). If you hold several 3a accounts, plan before you sign the purchase contract which of them you need for the purchase, and remember that the five-year interval covers all of them together. Why several accounts help at retirement is explained in our guide How to optimise your 3rd pillar.

How the withdrawal is taxed

Capital paid out of Pillar 3a is taxable income (Art. 22 DBG), and a home ownership payout is no exception. It is taxed separately from your other income:

• Federal tax: a full annual tax at one fifth of the normal tariff (Art. 38 DBG).
• Cantonal and municipal tax: each canton applies its own rate. Aargau, for example, taxes it at 30% of the tariff, at least at a rate of 1% (Aargau leaflet, section 3).
• Added together: several capital payouts from pension savings in the same year, for example from Pillar 3a and your pension fund, are taxed together. For married couples taxed jointly, both spouses’ payouts count (Aargau leaflet, section 4).
• Reported automatically: your 3a provider reports the payout to the tax authority (Art. 129 para. 1 let. b DBG). Keep money aside for the tax bill, which comes separately.

What the tax would be for your canton and amount, you can work out with the official ESTV tax calculator (capital payment from pension savings).

What it does to your retirement savings

• The money is gone from Pillar 3a for good. Since it cannot be paid back, your 3a balance at retirement will be lower by the amount you withdrew and by everything it would have earned until then.
• You cannot buy it back later. Since 2025 you can make up for missed 3a contributions from the past ten years, but only for gaps from 2025 onwards; earlier years cannot be bought in (Art. 7a BVV 3 and its transitional provision). Money you withdrew is not a contribution gap.
• You keep the yearly deduction. The right to pay into Pillar 3a and deduct it depends on your earned income and on whether you are in a pension fund (Art. 7 BVV 3), not on your 3a balance. With a pension fund, the maximum for 2026 is CHF 7,258; without one, 20% of earned income up to CHF 36,288 (BSV: the third pillar).
• A 3a insurance policy pays its surrender value. If your 3a is held in an insurance policy rather than a bank account, a withdrawal means surrendering the policy: you receive its surrender value, and the death or disability cover in that policy ends with it.

What it does to your tax deductions

Using Pillar 3a for your home changes more than your 3a balance. Under the current system, homeowners pay income tax on the imputed rental value (Eigenmietwert) and may deduct mortgage interest and maintenance costs; the mortgage is also deducted from the property’s value for wealth tax (ch.ch: taxation of real estate). A 3a withdrawal used as equity or to repay the mortgage means a smaller mortgage, so you pay less interest and can deduct less.

The alternative: pledging your Pillar 3a

Instead of taking the money out, you can pledge your 3a capital, or your claim to the benefits, as security for the mortgage on your own home. BVV 3 applies the pledging rules of the 2nd pillar to Pillar 3a by analogy: Art. 30b BVG, Art. 331d of the Code of Obligations and Art. 8 to 10 WEFV (Art. 4 para. 2 BVV 3). In practice this means:

• No tax when you pledge. Tax is only due if the pledge is ever realised, that is, if the lender actually takes the money (Aargau leaflet, section 3).
• Your money stays in Pillar 3a and keeps counting towards your retirement.
• Your spouse must agree. For married people, a pledge is only valid with the spouse’s written consent; the same applies to registered partnerships (Art. 331d para. 5 CO).
• The lender must agree to a later payout. As long as the pledge stands, paying out the pledged amount needs the lender’s written consent (Art. 9 WEFV).
• Your mortgage stays higher, and so does the interest you pay. Whether and how your bank counts a pledge in the financing is up to the bank, so ask for both options in writing.

Pillar 3a and pension fund money are not the same

Many buyers combine Pillar 3a with money from their pension fund. The rules differ, so do not transfer what you know about one to the other:

• Minimum amount: a pension fund withdrawal must be at least CHF 20,000 (except for housing cooperative shares and vested benefits institutions) (Art. 5 WEFV). BVV 3 does not apply this minimum to Pillar 3a.
• Repayment: pension fund withdrawals can be paid back (at least CHF 10,000 at a time, Art. 7 WEFV), and the tax paid can then be reclaimed within three years of the repayment (Aargau leaflet, section 1). Pillar 3a withdrawals cannot.
• Lower benefits: a pension fund withdrawal reduces your pension fund benefits. To avoid a gap in your death and disability cover, the pension fund offers or arranges supplementary insurance (Art. 331e para. 4 CO).

If your family would struggle to pay the mortgage without your income, read our guide to term life insurance in Switzerland. Which other policies you need as an owner is covered in Insurance for homeowners in Switzerland.

Before you decide: five checks

1. Work out the equity you really need. The bank wants your own funds before it grants a mortgage; ch.ch puts this at around 20% of the purchase price, plus the costs of the purchase, and lists Pillar 3a savings as one possible source (ch.ch: financing your own home).
2. Compare withdrawal and pledge with numbers. Ask your bank for both financing offers and work out the tax on the withdrawal with the ESTV tax calculator.
3. Count all capital payouts in the same year. Pillar 3a, pension fund and vested benefits payouts in one calendar year are taxed together.
4. Mind the five-year interval. It covers all your 3a accounts together, so plan which accounts you use now and which you keep for later.
5. Ask your 3a provider early which documents it needs for the payout, and get the written consent of your spouse or registered partner in time.

Withdraw or pledge your Pillar 3a?

Nicole Bohne (10 years in insurance and pensions) works out with you what each option costs in tax and retirement savings, and which risk cover your family needs alongside the mortgage. 45 minutes by video, free and without obligation.

Pick a time → Pillar 3a overview

69days left to pay into pillar 3a for this year

Sources

• BVV 3, ordinance on tax deductions for contributions to recognised pension schemes (in German), Art. 3, 4, 7 and 7a
• WEFV, ordinance on home ownership promotion with pension money (in German), Art. 2 to 9
• DBG, Federal Act on Direct Federal Taxation, Art. 22, 38 and 129
• Code of Obligations, Art. 331d and 331e
• Aargau cantonal tax office: leaflet on home ownership promotion, pillars 2 and 3a, as of 1 January 2026
• ch.ch: the 3rd pillar, financing your own home and taxation of real estate
• Federal Social Insurance Office (BSV): the third pillar
• Federal Council: abolition of the imputed rental value from 2029, 1 April 2026
• ESTV tax calculator

About the author

Nicole Bohne

Pension & Relocation Advisor

Nicole Bohne has worked in insurance and pensions for 10 years, including at Basler and Zurich. She specialises in pensions (pillar 3a, risk cover, tax) and in the insurance questions that come with moving to Switzerland. FINMA-registered intermediary (F01536402); she advises in German, English and French.

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