The main cited reason is the fact that with direct democracy (referendum right) people could have voted it down, but yeah it’s a bit of a stretch. (But we’re digressing here 
)
I’m not convinced, though and would rather see it go 
Under the current regime, I pay over 10k tax extra a year. Including that, I still pay less for housing then I would as renter of the same place, but I do have a lot of own capital tied down and more at risk. I would rather avoid and invest these taxes for future repairs or have it ready to reduce to mortgage if interest goes up.
With a new place, big renovations come only later, whereas renter pay for it month by month as part of their rent. And yet, as owner you do need those reserves, eventually. Currently, I have high taxes, and by the time big deductions come, I’m retired and have lower taxes, so I don’t even get this benefits to the full extend.
You could also compare buying to prepaying rent, why should there be tax on it?
We don’t have to agree or discuss further, I just wanted to offer a different perspective.
From a neutral perspective, it wouldn’t just get more complicated, either. For example, the tax office could drop checking renovation bills, having to separate those into actual repairs vs. value-enhancing improvements.
And a “good” tax is ideally also a “neutral” tax, as in one that doesn’t impact other decisions. Neither the level of debt, nor doing renovations to your place should be influenced by tax deductions, one way or the other.
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Exactly this.
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50% over 25 years is probably more realistic.
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I’m surprised you pay 10k extra tax.
I had a 1.1M mortgage at 1.1% and overall my income increased by ~ a few kCHF resulting on a very small tax increase.
Now remake your calculation with interests just at 2.5% and you’ll see how nice is the imputed rental value 
For example, assume 40k imputed rent (after flat deduction), and 10k of mortgage. Gets you to 30k additional income, at 33% marginal tax it’s 10k extra.
Yes, the individual result is quite sensitive to your mortgage, as well as to how the imputed rent is calculated for your place. ZH is mostly formula based and for older buildings still uses values (for land and building) from 2009 or so (new one comes next year), which benefits owners of older buildings a lot (besides that they’ll have more need for renovations).
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you can also deduct the maintenance fees and the insurance.
Even with a forfait and a brand new flat, you should be able to deduct 10% in Zurich (20% in Vaud).
In fact I wouldn’t be surprised if the real maintenance costs and insurance are higher than the forfait.
And as I said, you only need interests at 2.5% (in Vaud at least) to beat the imputed rental.
I would still vote against the abolition, there is some fairness wrt renters and it stimulates investment in the buildings.
I happen to leave nearby the French border and I immediately know when I have crossed it: buildings are not maintained the same as in Switzerland, you can’t deduct interest and you can’t deduct maintenance there..
If the vote passes and renovation costs for owner-occupied homes won’t be deductible anymore in a couple years → would people start renovating more (I would likely do), driving demand and prices up? Could that happen?
Yes, unless they bring in the rule immediately to avoid this distortion.
Plus tradesmen will cash in on this by rising prices to meet the demand.
What’s the feeling? Will it pass?
I don’t think so. Renters are against it, builders are against it and I am against it, because they state that most people will have to pay CHF 500 more tax. Personally I’ll have to pay like 2’500 more because I could not deduct debt interest any longer.
I think it was a waste of time and money. I’m OK with removing an unneeded tax, but if you have to pay tax on dividends you should be able to deduct the debt interest in proportion to the income producing goods. The argument was that real estate capital appreciation is taxed in some municipalities and the stock capital gains are not. WTF, either tax both or none!
And then, if it is so, why private landlords still can deduct it?
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Taking a brief review of the proposed changes, we are against and will probably vote no (I anyway cant vote).
Based on “feelings” I would say it doesn’t pass. But dont underestimate the power of old retirees/boomers to turn up en masse for their own selfish gain (see 13th AHV) and sway the result again.
I do have a question tho. From my understanding, if the new proposal passes and becomes law, I will not even be allowed to deduct my apartment monthly maintenance costs from taxes, correct? I am talking about the maintenance costs which the 3rd party agency (entrusted with the upkeep of our apartment community) invoices us for every quarter. Can someone please clarify this?
Correct.
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According to surveys, it’ll pass. With quite a margin.
I agree totally.
What is even more worrying, I read that this might/will decrease fiscal income between several hundred millions to a few billions (2.5?) per year. The need for increase in other taxes is already being raised…
Absolutely, this change makes taxation more complicated and ultimately unfair
personally:
- I think tax on imputed rental is a good thing and want to keep it
- I also think allowing deductions for interest and maintenance on rental properties is a good thing (not sure if interest will be limited by apportionment under the rules)
- I think deductions for own-use repairs and maintenance is a good thing when combined with imputed rent (you essentially treat all property as rental property only when you live in it you charge yourself a fictitious rent)
so all in all, i would favour keeping the status quo.
the problem is that quite a lot of homeowners hate tax on imputed rent.
no idea how the vote will go. maybe there’s enough uncertainty that people will stick with the devil you know.
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It’s not a generation thing. The UBS summary quoted above sums it up quite well:
“Given low mortgage interest rates, the winners of the tax reform would be the owners of new apartments in large residential centers. The imputed rental value of their apartments is high and the loss or limitation of deduction options would hurt less because they only have low maintenance costs.”
“The most likely losers will be owners of older properties in need of renovations.”
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Also from the same UBS article.
“Changing the system would be of most benefit to those homeowners who have already amortized their mortgage or have almost fully amortized it. Pensioners in particular are likely to fall into this category. For them, abolishing taxation on imputed rental value in relation to their income will have a significant impact.”
Yes that’s the point I tried to make, it’s not that black and white kind of decision. Pensioners are more likely to have amortized, but also more likely to have an old place in need of renovation. Their tax rate? Depends, they’re not all rich, even those who own property.
That new house in or near the city isn’t bought by pensioners, that’s rather millennials with kids.
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The thing is, homeowners are a relatively small proportion of the population, so maybe there’s not much of a voting block here?