Meanwhile,
Should switzerland abolish rental value?:
Swiss particularity: when you have a house. Therefore, an apartment that you occupy yourself, you have to pay a tax on a fictitious rent. Moreover,
Keystone / Gaetan BallyAnyone who owns the accommodation in which he. Consequently, she lives must pay taxes, according to the complex rental value system, which also offers certain tax optimization possibilities. Meanwhile, The Parliament would like to abolish it, which will be the subject of a vote on September 28. In addition, – Should switzerland abolish rental value?
On September 28, 2025, Switzerland will vote on the abolition of rental value. Moreover, But this vote is wrapped in a bill at the different label. Furthermore, entitled Federal Decree relating to cantonal real estate tax on secondary residencesExternal link.
What looks like a false label is explained by the path traveled for years to achieve the abolition of. Furthermore, the rental value in Parliament. Nevertheless, Indeed, deletion is only possible if this newly presented cantonal tax is accepted.
Recently, the mountain cantons have opposed the abolition of the rental value in Parliament. Meanwhile, Their motivation is obvious: they can collect a rental value tax from secondary residences. Nevertheless, garner considerable revenues that they would lose in the event of abolition.
In order to associate the mountain cantons with the project. Nevertheless, the Parliament therefore wanted to give them the opportunity to take taxes should switzerland abolish rental value? from second homes in another form. For example, For this, a modification of the constitution is necessary, which implies a federal vote.
This is how this new apartment. For example, holiday home tax has at the same time become a referendum on the abolition of the rental value decided by Parliament. Furthermore, If the people and the cantons refuse it, the target modification will also be prevented. However, If the two say yes, the change in tax system for housing propertyExternal link will should switzerland abolish rental value? come into force.
Complicated? Similarly, This is only the beginning.
Should switzerland abolish rental value?
What is rental value? – Should switzerland abolish rental value?
The rental value constitutes the basis of a tax that property owners pay on the houses. Nevertheless, apartments they or they occupy themselves. Moreover, The idea is to find a balance between tenants and owners.
As the owners do not pay rent, they and they have economic advantages compared to the tenants. Consequently, This inequality must be offset by the rental value.
The cantons then fix an alleged annual rent for housing owners and add this amount to their taxable income. Furthermore, The rental value is therefore a “fictitious income” which is taken into account for taxes. Consequently, which can have its importance.
Presentation of the reform adopted by the Parliament in the RTS telejournal of December 18. 2024:
The effects of a removal – Should switzerland abolish rental value?
The abolition of should switzerland abolish rental value? the rental value would also delete deductions from maintenance costs and debtor interests. This is the compromise to which Parliament has reached this project.
The change of system also includes attenuation for first-time buyers, since mortgage debt is highest after purchase. Interests will always be deductible for ten years, but gradually.
Retired people are particularly concerned, as the current system often traps them. Those who. after the disappearance of their professional income, must suddenly experience a modest rent particularly feel the tax on the rental value.
In addition, high mortgage debts, for which there was a strong incentive to retirement, often constitute a big problem thereafter. Strict rules indeed oblige banks to renew mortgages only if they are bearable thanks to income or pension.
This is how many people in Switzerland see their accommodation become a burden at the retirement age. According to the calculations of the Confederation. this fringe should switzerland abolish rental value? of the population is that which would benefit the most from the abolition of the rental value.
What do the opponents of the project want?
In politics. it is mainly the bourgeois parties, the UDC, the center and the PRD which are favorable to a change of system.
Among the followers of the current system. there are especially the PS and the Greens as well as the association of tenants. While the tenants fear the end of a balance that works. the PS, in mind, argues on the threat of loss of tax revenue.
The should switzerland abolish rental value? amount of the rental value is fixed differently depending on the cantons. As a rule, this value must represent at least 60% of what the owner would get if he rented his property.
What are the criticisms of rental value?
The rental value is particularly unpopular with the owners. Many do not understand its usefulness. The political world has already tried to abolish it several times. but the last attempt in this sense failed in the ballot boxes in 2012 with 53% no.
In the current context of low interest rate. this system weighs more on housing owners: the fixed rental value remains unchanged, while interest costs, which can in return be deducted from taxes, have decreased. A recent analysisExternal link From the Confederation estimates that. in the current context of interest rates, around 80% of landowners would benefit from the project.
But the system also offers should switzerland abolish rental value? incentives to owners. In addition to passive interests, they can deduct renovation and maintenance expenses from their taxes. These two elements serve them as compensation, and many owners use these possibilities to optimize their taxes.
Opponents of the system also see bad incentive. Indeed, the rental value system rewards the taking and conservation of mortgages. This is one of the reasons why real estate and Swiss households are strongly in debar in international comparison.
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Rental value: Real. tax for fictitious income
According to the PS. this drop in revenues would affect Switzerland at a time when the national government wants to impose generalized cuts through a large bunch of savings.
The extent of the drop in tax revenue for the Confederation will strongly depend on the level of future. mortgage rates. The more these will be raised in the future. the less the abolition of the rental value will weigh in the tax revenue of the Confederation and the Cantons.
In its campaign. Additionally, the PS argues that the reduction in the tax burden of “rich property owners” would cost Switzerland 2 billion francs per year. It is based for this on a level of mortgage should switzerland abolish rental value? interest rate between 1 and 1.5%.
The federal administration of contributions assesses the effectsExternal link From the change of system as follows: for a level of interest rate up to almost 3%. the Confederation and the cantons would undergo losses. From a level of interest rate of 3% and more, the state would benefit from the change. Recently, in 2022 and 2023, fixed mortgages at ten years in Switzerland were greater than 3%.
The cantons are also skepticalExternal link Faced with the change of system. Mountain cantons certainly have the possibility of compensating for taxes removed by a tax on second homes. However, it is unlikely that this will be politically fully achievable.
Banks also oppose change. They largely benefit from the current system thanks to tax incentives on mortgage debts. It is fertilizer for their activities in this sector.
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How the mortgage system works in Switzerland
The economic circles finally are divided. On the one hand, the current system rewards real estate investments, which benefits the construction sector. From another. the association of landowners argues should switzerland abolish rental value? that after the end of the rental value, the owners will have more money to maintain their real estate.
Should switzerland abolish rental value?
What would happen after the abolition of the rental value?
Even if the project bears another name. that it is “only” a tax on second homes, a “yes” means the final abolition of the rental value throughout the country. The system change will be effective. After a transition period of approximately two years, the new regime would come into effect.
It remains to be seen how the mountain cantons will manage the possibility of compensation. They will then be able to collect a tax residences. This question will be addressed separately in each canton and developed by the respective governments and parliaments. It is therefore very likely that votes concerning a tax on second homes will follow in the mountain cantons.
What else should switzerland abolish rental value? should be known?
You have probably noticed it, the case is not only complex, it is also twisted. Whoever wants to abolish the rental value must vote yes in the polls. The one who wants to keep the rental value must vote no.
Watchwords
Oui
Federal Council. National Council, States Council, UDC, PLR, Center, Pev, Swiss Union of Arts and Crafts, Association of landowners
Non
PS, cantonal conference of the Greens, association of tenants, mountain cantons
Text reread and corrected by Samuel Jaberg and Marc Leutenegger, translated from German by Lucie Donzé/Op
Further reading: Brigante Yoann: “Almost all of the players in Switzerland have a status called non -amateur” – RTS.CH – Border controls in Europe: where could you have slowed down on the holiday path – rts.ch – The nati at the Euro, the neuchâtel bull and the air conditioning – Biel (BE): a car rushes into the window of a restaurant – Geneva: a biker between life and death after swerry.
