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Abolition of own-rental value – this is the tricky

The taxation of own-rental value is for many homeowners to be a Nuisance. This should now disappear. In turn, fewer tax deductions can be made, also for the interest on your debt. That is, under certain circumstances, property owners.

The economic Commission of the Council of States (WAK) has worked out different variants. Some of them would mean for all private debtors with high costs. The Confederation and the cantons would benefit from additional revenues of up to 2 billion Swiss francs. Reason for this is that the Commission is pursuing with the change in the law is more than a goal.

on the one Hand, you want to respond to the wish of the home owner, the taxation of hard-to-follow self-rental value to be abolished, such as WAK-President Pirmin Bischof (CVP/SO) said on Friday in front of the Federal Palace media. In return, mining costs, such as those for maintenance or administration should not be deducted from the taxes.

deductions for energy-saving, environmental protection, or historic preservation should disappear at the Federal level. The cantons should this, however, can allow to continue. In the case of second properties, the self-rental value in accordance with the will of the WAK is to be taxed. In the case of leased property, the recovery costs would continue to be deductible because the income will remain taxable.

Worryingly high debt

on the Other hand, the Commission followed with the presentation of the target, the rapidly growing private sector debt to curb. This is in Switzerland, on international record high level. One reason for this is that the debt due to the possibility of high tax deductions, in fact, is subsidized.

The Commission could not agree, however, on how the growth of private debt is to be reduced. Not less than five variants to the discussion of whether and to what extent in the future, private debt, with interest, from the taxes can be deducted.

The extreme variant, the deletion of all deductions. In the case of an assumed interest rate of 3.5 percent that would bring the Federal government 670 million Swiss francs in revenue, the cantons of 1.35 billion. The resistance against this variant is foreseeable, because the money would be missing in the wallet of the households.

Even at the currently low interest rates, the new load would exceed the discharge due to the elimination of own-rental value. At an interest rate of 1.5 percent, the Federal government would take in addition, around 140 million francs, the cantons of nearly 300 million.

"a Viable option"

Although the Commission treated according to the Bishop all the variants as equivalent. There is considerable doubt as to whether the deletion of any deductions for interest on debt, a majority would be capable of, he said. More prospect of success has a variant, the sluggish, the deduction of interest on Debt to the extent of the Tenant and by the self-rental value on second homes. "The Commission thinks that this would be a viable option," said Bishop.

Council of States Primin Bischof during a media conference of the economic Commission. (15. February 2019) image: Adrien Perritaz/Keystone

This view also house owner-President Hans Egloff. He advocated a solution in which all deduction opportunities in connection with the self-rental value – but only these. For him, this variant would be a victory: At today's historically low interest rates, the homeowners would be in a below-the-line better than it is today.

you would be Relieved under the present conditions, also in case of the variants, in which the private interest on debt in the amount of 100 or 80 per cent of the taxable income of the tax should be deducted. A further variant would favour investments. to promote

the residential property , the WAK in addition, a first-time purchase discount. This should be in the first year, 10'000 Swiss francs and then about 10 years steadily. The template is now in the consultation process. According to Bishop, the CTE hopes that the Council of States is able to advise in the winter session.


Created: 15.02.2019, 12:16 PM

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