The Canton of Bern is exploring the possibility of a new tax on second homes following a national vote to abolish the imputed rental value tax. This change is expected to create a significant revenue shortfall, with the canton facing a loss of 100 million Swiss francs and its municipalities losing over 50 million francs annually.
Government officials have confirmed they will review the proposal for a special tax on holiday properties, a measure intended to compensate for the financial gap. However, the path to implementation is complex and lengthy, with officials suggesting a 2028 deadline is likely unachievable.
Key Takeaways
- The abolition of the imputed rental value tax will cost the Canton of Bern 100 million francs and municipalities over 50 million francs in annual revenue.
- A special tax on second homes is being considered as a way to offset these losses, particularly in tourist-heavy regions like the Bernese Oberland.
- Political leaders from affected municipalities and the SP are urging a swift process, but the government anticipates a long legislative and public approval timeline.
- Officials state that meeting the federal government's proposed 2028 implementation date is "hardly feasible" for the canton.
Major Financial Impact on Bern
The recent decision by Swiss voters to eliminate the imputed rental value tax, known as 'Eigenmietwert', has created significant financial challenges for the Canton of Bern. This tax required homeowners to declare a fictional income based on the potential rental value of their primary residence.
With its removal, the canton's budget will be directly impacted. Projections indicate a revenue loss of approximately 100 million Swiss francs for the cantonal government. Local municipalities are also set to lose a combined total exceeding 50 million Swiss francs. The final amounts will fluctuate depending on future interest rate environments.
What Was the Imputed Rental Value Tax?
The 'Eigenmietwert' was a unique feature of the Swiss tax system. It treated homeownership as a source of income. Tax authorities calculated a hypothetical rental income that a homeowner could earn by renting out their property. This amount was added to the owner's taxable income, even if they lived in the property themselves. In return, homeowners could deduct mortgage interest and maintenance costs.
Tourist Regions Disproportionately Affected
The financial strain is not evenly distributed across the canton. Municipalities in popular tourist destinations, such as those in the Bernese Oberland, will be hit hardest. These areas have a high concentration of second homes and holiday properties, which were also subject to the imputed rental value tax.
Towns like Lauterbrunnen and Adelboden rely on a tax base that includes numerous non-primary residences. According to official calculations, some of these communities could experience a reduction in their total tax revenue of up to three percent. This represents a substantial blow to local budgets that fund public services and infrastructure.
A New Tax on Second Homes Proposed
To address the impending revenue shortfall, a new fiscal tool is being considered: a special tax specifically targeting second homes. The constitutional amendment that ended the 'Eigenmietwert' included a provision allowing cantons to introduce such a measure.
The Bernese government has officially stated its intention to "examine" the implementation of this tax. On Monday, the cantonal Finance Directorate confirmed that the matter would be addressed "promptly," signaling the start of a formal evaluation process.
Financial Projections at a Glance
- Canton of Bern Loss: 100 million CHF
- Municipalities' Combined Loss: Over 50 million CHF
- Potential Municipal Revenue Drop: Up to 3% in tourist areas
Calls for Swift Action from Local Leaders
Political figures from affected regions and parties are advocating for a quick resolution. They see the second home tax as a necessary mechanism to stabilize municipal finances.
Willy Schranz, the municipal president of Adelboden, expressed his hope for a rapid introduction of the new law to provide clarity and financial security for his community. His sentiment is shared by the Social Democratic Party (SP).
"So we can at least compensate for part of the tax losses," stated Manuela Kocher Hirt, Grossrätin and Co-President of the SP for the Canton of Bern, emphasizing the need for the special tax on second properties to be implemented quickly.
A Long and Complex Legislative Path
Despite the calls for urgency, introducing a new tax is a multi-stage process that will take considerable time. The government's review is only the first step in a long legislative journey.
The process will involve several key phases:
- Drafting Legislation: The cantonal government must first draft a new law that establishes the legal framework for the tax.
- Parliamentary Approval: The proposed law must then be debated and passed by the cantonal parliament.
- Public Referendum: It is highly likely that the new tax law will be put to a public vote, allowing citizens to have the final say.
- Municipal Implementation: Only after the cantonal law is in place can individual municipalities decide whether to adopt the tax, a decision that would also require a local vote.
Implementation by 2028 Deemed Unrealistic
The federal government has set a target of 2028 for the complete abolition of the imputed rental value tax. However, officials in Bern are skeptical about meeting this timeline for all related adjustments.
The cantonal administration has described the prospect of implementing the necessary changes, including the potential new tax system, by the beginning of 2028 as "a very big challenge and hardly feasible." This suggests a potential disconnect between federal timelines and cantonal realities, which could lead to a period of financial uncertainty.
Other Tax Decisions Looming
Beyond the question of a second home tax, the Canton of Bern must also decide on the future of various tax deductions for homeowners. Currently, owners can deduct costs for maintenance, energy efficiency upgrades, and environmental protection measures.
The government must now determine which, if any, of these deductions will remain after the 'Eigenmietwert' is gone. While eliminating all deductions would reduce the overall revenue loss, some are considered politically essential. The deduction for energy-saving and environmental protection measures is particularly significant and enjoys broad political support, making its removal unlikely. The decisions made on these deductions will further shape the final fiscal impact on homeowners and the cantonal budget.