WEF (Wohneigentumsförderung, encouragement to home ownership) was introduced in 1995 to make Swiss home ownership more accessible. It applies only to a primary residence — second homes, investment property and pure land plots are excluded.
Two routes exist: an outright early withdrawal (Vorbezug), which is taxed at the reduced lump-sum rate, or a pledge (Verpfändung), which keeps the capital in the fund but uses it as additional collateral for the bank. Pledging preserves future pension entitlements; withdrawal reduces them proportionally.
Up to age 50, the entire Pillar 2 and Pillar 3a capital can be used. After 50, only half of the current balance or the balance at age 50 (whichever is higher) may be withdrawn. Re-buying the withdrawn amount back into Pillar 2 is allowed once the loan is repaid and is fully tax-deductible.
A 35-year-old buying a CHF 1,000,000 home with CHF 100,000 of personal savings withdraws CHF 80,000 from Pillar 2 and CHF 20,000 from Pillar 3a to reach the required 20% down payment. The lump-sum tax on the withdrawal is about CHF 5,000 depending on canton.