- There is a risk that it will again fail to eliminate the notional rental value.
- even after the third and final third consultation, the State Council does not agree with the National Council on key points.
- The majority of both councils are concerned about tax matters. However, how the system change should be implemented is controversial.
The state Council today adhered to its previous decisions. He wants to end the notional rental value for first homes only. The State Council also insisted that it find a solution to the issue of deducting interest on debts. Accordingly, deductions of up to seventy percent of taxable investment income should be allowed in the future.
Simultaneously occurring, the National Council insisted that the system be completely changed.Accordingly,the notional rental value for second homes should be abolished.Simultaneously occurring, he wants to ensure that the cantons will have the opportunity to charge a property tax on second homes. the National Council recommends another method than the State Council regarding the deduction of interest on debts.
The compromise proposal is not clear
The responsible State Council Commission has asked its advice to follow the National Council on all points of contention – on the condition that the notional rental value ends at the same time as the new constitutional provision for levying property tax. the long-standing dispute over the removal of the notional rental value in evidence was thoght to have been resolved.
However, the proposal was rejected before the winter session by the government conference of the mountain katons. Commission spokesman Pirmin Bischof (center/SO) indicated at the start of his vote that the failure of the proposal was still a realistic scenario.
After an animated and controversial debate, the State Council ultimately did not even consider the proposal to introduce a property tax. He also said about nine peopel will end up adding the notional rental value for a second property. And finally he also rejected the conciliation proposal of the National Council regarding the deduction of interest on debts.
“Extremely high stakes”
Most in the Council of States do not want a complete change to the system because that would mean a notable loss of income for tourist auctions, especially those with a high percentage of second homes. By implication, a property tax compensation solution for affected cantons would open up additional areas. It is therefore important to focus on eliminating the perceived rental value of first homes.
Martin Schmid (FDP/GR) recalled that this was a cross-party consensus when the discussion began eight years ago. In contrast, the introduction of a property tax for secondary properties has “extremely high hurdles”. The corresponding constitutional change requires a double majority from the people and the classes.
Even if the notional rental value for a main residence is abolished, as some speakers have emphasized, the referendum will have a difficult time. the tenants’ association has announced that they will hold a referendum against it.
Some members of the Council of State indicated that they would reject the proposal in the final vote because it would only complicate the system. First of all, though, it is indeed the turn of the National Council again, and it is highly likely that the unified conference will deal with the proposal afterwards.
As of today, there does not seem to be a solution in sight that would be acceptable to the majority.
What are teh main points of contention between the State Council and National Council regarding rental value taxation for second homes?
Interview Transcript: The Future of Rental Value Taxation
Time.news Editor (TNE): Good day, and welcome to Time.news! Today, we have with us Pirmin Bischof, a spokesperson for the State Council Commission. Pirmin, thank you for taking the time to join us.
Pirmin bischof (PB): Thank you for having me.It’s a pleasure to be here.
TNE: There’s a lot of discussion swirling around the notional rental value and how it relates to property taxation. Can you explain what the notional rental value is and why it’s such a contentious issue?
PB: Of course. The notional rental value is essentially an estimate of what a property would rent for on the open market, and it plays a critical role in determining property taxes for homeowners.The contention arises from the fact that many believe it disproportionately affects first and second home owners, especially in high-demand areas. There’s a push to eliminate it for first homes entirely while also addressing how it applies to second homes.
TNE: Speaking of that, the State Council aims to end the notional rental value for first homes, but there have been disagreements, especially with the National Council regarding second homes. What are the key points of contention?
PB: The main difference lies in the approach to second homes. The National Council wants to completely abolish the notional rental value for these properties, allowing cantons to impose property taxes instead, which could substantially impact second home owners. On the other hand, the State Council sees the notional rental value as necesary and wants to gradually phase it out while maintaining some government oversight on property taxes.
TNE: That sounds complicated! You mentioned that there was a recent proposal for a compromise, but it truly seems like it was rejected. What was the proposal about?
PB: The proposal sought to harmonize the efforts of both councils—essentially suggesting that the notional rental value for second homes would end simultaneously with a new constitutional provision for property tax. Many believed this could be a middle ground, but as you’ve noted, it faced rejection before the winter session by the mountain cantons’ government conference.
TNE: So, after all these discussions and debates, what’s the current situation? Where do things stand now?
PB: Right now, we’re at a bit of a stalemate.The majority of both councils still wish to reform the current system, but specific pathways remain deeply divided. While there’s agreement that the notional rental value needs reform, how to achieve that remains uncertain. Moreover, the conversation about allowing deductions for interest on debts is also controversial, with differing opinions on how that shoudl be handled going forward.
TNE: With such divergent views and the potential for failure, is there a realistic timeline for resolution?
PB: it’s hard to say. Both councils have shown interest in compromise, but if the discussions don’t lead to a resolution soon, we may find ourselves in a situation where the proposal is dropped altogether. The discourse will have to continue, but it’s clear there’s still a lot of work to be done before any notable changes can be implemented.
TNE: It sounds like a vital issue where many stakeholders are affected. Before we wrap up,is there a message you would like to convey to those watching,especially property owners who might be anxious about these changes?
PB: Yes,I’d urge property owners to stay informed and involved in the discussions. Their voices matter, and sometimes public opinion can influence the direction of policy changes. It’s crucial for everyone to advocate for their interests as these debates progress.
TNE: Thank you, Pirmin Bischof, for your insights today. It’s been a pleasure discussing this important issue with you!
PB: Thank you for having me. It was great to discuss these critical topics!
TNE: And thank you, viewers, for tuning in. Stay updated with Time.news for the latest on this and other pressing topics!