Two models for changing rental value taxation
The National’s royalties commission is studying other options in the dossier devoted to the elimination of the centennial tax.
As a general rule, the rental value represents at least 60% of the value that might be obtained if the property were rented. (Pretext photo)
KEYSTONE/Anthony Anex
Discussions around the elimination of rental value tax are not yet over. The National’s royalties commission first wants to study two models.
Rental value has existed in Switzerland for more than a hundred years. Attempts to abolish the tax have failed several times at the ballot box and in Parliament since the early 2000s. In September, senators took another step in this direction. They want to eliminate the tax at the federal and cantonal levels.
Secondary residences
In addition, the committee wishes to maintain certain current measures. Deductions for restoration costs must be allowed, the commission decided by 12 votes to 10.
By 19 votes once morest 4, it also proposes to maintain deductions for energy saving measures and demolition costs at the federal level. The Council of States had only retained this possibility for the cantonal level. The building stock is relatively dilapidated and the incentive measures to clean it up must be maintained.
The committee also examined five models for deducting passive interest, including that of the Council of States, which provides for a deduction of 70%. The commission also studied the possibility of a deduction of 80% or 100% of the taxable return on wealth, a deduction of 70% of taxable property income and finally a model with no possible deduction.
Limitation
In the end, she came out in favor of the model providing for 100% deductibility, said Leo Müller. By 21 votes to 3, the commission opposed the deduction for the acquisition of a first home. The solution adopted concerning the deduction of passive interest is quite generous, considered the majority.
By 10 votes once morest 8 and 7 abstentions, the commission refused the possibility for tenants to deduct rental costs.
The commission also asked the administration to evaluate a second model. This consists of limiting the rental value to 60% or 70% of market rents. This would more or less maintain the current system, lowering the rate, said Leo Müller.
The administration will have to present the tax losses for the two variants. The commission will decide at its August meeting.
At least 60% of the value
In the current system, the rental value is calculated according to the theoretical profit that the owner would derive from renting out his house, even if he lives there. In return, the interest on the mortgage debt and the maintenance and renovation costs of the building can be deducted.
The rental value is determined by the tax authority of the cantons. It takes into account criteria such as living space, location, year of construction and type of habitat. As a general rule, the rental value represents at least 60% of the value that might be obtained if the property were rented. The same goes for second homes.
Posted today at 5:51 p.m.
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