Standstill in the owner-occupied rental value debate
The abolition of the imputed rental value remains an unresolved ongoing issue. The National Council and the Council of States disagree on key points. While the Council of States insists on a compromise for primary residences, the National Council wants a complete change of system. A solution does not currently appear to have majority support.
The abolition of the imputed rental value, a tax that is unique in Europe, is in danger of failing once again. There is broad agreement in both councils that the system needs to be reformed. However, its implementation remains highly controversial. The issues of property tax for second homes and the debt interest deduction in particular are causing conflict.
In its third deliberation on Thursday, the Council of States maintained the abolition of the imputed rental value for primary residences only. It also maintained its position on the debt interest deduction. In future, deductions of up to 70 per cent of taxable property income should remain permitted. The National Council, on the other hand, is calling for a complete system change and also wants to exempt second homes from tax.
Tourism cantons put the brakes on
The majority rejection in the Council of States is primarily due to the concerns of the tourism cantons. They fear a considerable loss of revenue due to the abolition of the imputed rental value for second homes. The proposal of a property tax to compensate for this has met with resistance there. “We need to focus on primary residences,” emphasised Martin Schmid (FDP/GR). The introduction of a property tax would present “extremely high hurdles”, as it would require a constitutional amendment with a double majority.
Realistic collapse of the bill
The collapse of the bill seems increasingly likely. Even the abolition of the imputed rental value for primary residences is facing headwinds. The tenants’ association has already announced a referendum. Its president, Carlo Sommaruga (SP/GE), criticised the bill as a “tax giveaway for rich homeowners” that does not solve the inequality between tenants and owners.
Doubts are also growing within the centre-right parties. Pascal Broulis (FDP/VD) warned that the bill would unnecessarily complicate the tax system. The National Council must first decide on the bill again before a possible conciliation conference could follow. However, there is currently no majority solution in sight.