Homeowners who are annoyed about the imputed rental value are likely to have enjoyed the Federal Council meeting at the end of August. There the Federal Council spoke out in favor of abolishing imputed rental value. In return, home tax deductions are to be abolished or severely restricted.
Today, from a tax point of view, the use of one’s own house or apartment is considered income in kind, which must be taxed as imputed rental value; In return, you can deduct the mortgage interest and maintenance costs from your tax return.
The result: a retired person who has largely amortized his mortgage, for example, pays more than 7,000 francs in additional taxes every year. For a young family, it is almost CHF 5,000 (see table).
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The current system gives preference to homeowners who are heavily indebted. As long as interest rates remain low, the sum of debt interest and maintenance costs is usually lower than the imputed rental value. If the imputed rental value is abolished, homeowners who have largely or completely amortized their mortgage and who do not invest large amounts in the maintenance of their property will benefit in particular.
The template for the abolition is still on shaky feet. The Federal Council insists that the imputed rental value does not only apply to the main residence, but also to owner-occupied second homes. Above all, those cantons in which the proportion of holiday and second homes is particularly high will defend themselves against this. It can therefore be assumed that the imputed rental value will remain in place for some time.
Tip: Therefore, find out carefully whether the imputed rental value can be reduced:
- Anyone who does not use part of their own home, for example because their children have flown out or their spouse has died, can apply for a deduction from the imputed rental value (under-use deduction) at the direct federal tax and in some cantons.
- However, the conditions for such a deduction are not easy to meet. For example, these rooms are not allowed to be used as guest rooms, handicrafts or ironing rooms. In some cantons you even have to remove the furniture.
- In addition, the tax authorities take other factors into account, such as customary practices and financial circumstances. No under-use deduction can be claimed for second or holiday homes, even if they are vacant most of the time.
- Single or two-person households who live in a house or apartment with a certain number of rooms have a good chance of an underuse deduction. Anyone who buys a house that is “too big” from the start can usually not claim a deduction.
Would you like to find out more? You can find more tips in the free leaflet “Imputed rental value – good to know”. Or arrange a non-binding one now Deadline in the DC near you.
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