TAXATION - BERNE PLOTS A BLOW FOR HOMEOWNERS

If this reform of property taxation goes ahead, tax deductions for mortgage interest, building maintenance costs and renovation work would be abolished. In return, the tax on imputed rental value would be scrapped... A bill that could prove costly for many.

It is clear that this tax on the rental value of homeowners’ main residences is an absolute scandal unique to Switzerland!

It is indeed a disgrace for our country that this tax often forces pensioners, who have worked hard to finally be able to afford their home, to sell it once they retire because they cannot afford this confiscatory tax.

We should therefore be delighted at its abolition... which was already mentioned a year ago in Le Temps magazine: Towards the abolition of the tax on the rental value

Well, that was without counting on the Bernese vampires of the CER (who do not, however, seem to be particularly left-wing) and their lust for easy money... (read the article from "Le Matin" below)

Ultimately, this confirms that when it comes to property investment for the middle and upper-middle classes, Switzerland is simply a trap or a pipe dream for the naive.

So here we have yet another reason to favour property investments abroad, which are far more accessible, more profitable and subject to lower taxes.

QED

NOVUSVIA

A minor bombshell is brewing for all property owners in Switzerland. In what it calls a ‘system change’, the Economic Affairs and Taxation Committee of the Council of States (CER) is proposing to amend the tax regime for primary residences intended for personal use (second homes are not affected) by abolishing the tax on imputed rental value. Many currently consider this taxation of owner-occupied homes to be unfair. This is often the case for elderly people who have to pay tax on a notional income.

However, to compensate for the tax revenue thus lost, the CER has outlined the ‘broad strokes’ of what the reform should entail. On the one hand, it proposes that owners should no longer be able to deduct the maintenance costs of their properties. On the other, it seeks to simply abolish ‘the deduction of mortgage interest for the main residence used for personal purposes’. However, to comply with the constitutional principle of home ownership, the deduction of mortgage interest would remain permitted for the purchase of a first home... This deduction would also apply if the owner has other investment income (from rents or share dividends)...

Finally, at federal level only, it would no longer be possible to deduct investments aimed at saving energy, protecting the environment or restoring historic properties.

For the time being, all this remains somewhat unclear, but the change in the tax regime does not look favourable for homeowners in debt. The federal government must draw up a preliminary draft, which will be examined during the first quarter of 2019.

Source: Le Matin