Cross-border commuters and neighbouring countries

Cross-border commuters are regularly confused with emigrants — including by banks. Yet the difference is fundamental and decides half the circle of eligible banks.

A cross-border commuter lives in Germany and works abroad. That makes them a German tax resident with foreign income. No abandoned residence, no limited tax liability, no Rome I question — and above all: no conversion right under section 503 of the German Civil Code (BGB), because that attaches to the national currency of the country of residence, and that country is Germany. Anyone who lives in Lörrach and earns Swiss francs in Basel has no conversion right despite a foreign-currency salary.

A surprising number of bank employees do not know this. The decline then arrives with the justification “foreign currency” — and it is simply wrong.

The genuine hurdles for cross-border commuters

• The exchange-rate haircut. Even without a conversion right, banks count a franc, pound or dollar salary with a safety discount — the rate can drift a long way over twenty years. The creditable income drops noticeably, and that belongs in the budget calculation from the outset.
• The form of evidence. A Swiss salary certificate or a French fiche de paie are fully valid documents, but unfamiliar formats. In an automated application process they break off the assessment before anyone has looked at them.
• The double-taxation agreement. Where the income is taxed depends on the respective agreement and often on a commuter clause. What matters to the bank is the net amount that actually arrives — and that can only be evidenced with the right documents. The tax assessment itself belongs with your tax adviser (section 1 StBerG).

The bottom line: the cross-border commuter is the most underestimated case of all — because it is taken for a difficult one, although it is not. More on this: cross-border commuter mortgage financing.

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