by Every year, home owners in Switzerland who live in their properties must add an imputed rent to their taxable income, adding to their tax bill. The system was introduced in the 1940s to fund government shortfalls during the war. A number of politicians and members of the public have tried for roughly two decades to remove it without success. This week, parliament voted in favour of a plan to phase it out, reported RTS. Photo by ILOVESwitzerland on Pexels.comHowever, removing imputed rent is far from a done deal. Many have threatened to call a vote to oppose any attempts to remove it, so a referendum on the subject is likely. One reason it has taken so long to receive broad government approval is concern that if not well defined it will be rejected by voters. Removing imputed rent
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Every year, home owners in Switzerland who live in their properties must add an imputed rent to their taxable income, adding to their tax bill. The system was introduced in the 1940s to fund government shortfalls during the war. A number of politicians and members of the public have tried for roughly two decades to remove it without success. This week, parliament voted in favour of a plan to phase it out, reported RTS.
However, removing imputed rent is far from a done deal. Many have threatened to call a vote to oppose any attempts to remove it, so a referendum on the subject is likely. One reason it has taken so long to receive broad government approval is concern that if not well defined it will be rejected by voters.
Removing imputed rent will create winners and losers. It is expected to reduce government income, although if interest rates rise sufficiently it may have the opposite effect. And not all homeowners will benefit from its removal. Some of the current tax advantages of home ownership, in particular the tax deductibility of maintenance expenses and the interest on mortgages will largely disappear.
In the latest version accepted by government this week, maintenance expenses, including environmental upgrades, would no longer be tax deductible. And only a portion of interest would be. The rules would apply equally to secondary and primary residences. A proposal to continue to allow the tax deductibility of investments aimed at saving energy was rejected by 103 versus 83.
The plan overall was accepted by a majority of parliament (158 versus 31).
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