This Sunday Swiss citizens will be voting on the following referendums.
On a national level the topics are:
Abolition of imputed rental value
Anyone who lives in a property in that they own Switzerland pays tax on what is known as the imputed rental value. This imputed rental value is added to taxable income. Unlike other taxable income, however, this is not income that has actually been realised – it is therefore also referred to as income in kind.
The imputed rental value is based on the fictitious rent that an owner could obtain by renting out their property to a third party. In addition to primary residences, tax is also levied on the imputed rental value of occupied secondary residences.
According to the Federal Supreme Court, the imputed rental value must be at least 60 per cent of the market rent. Apart from this, however, each canton determines the percentage itself. In addition, the methods used by the cantons to estimate the property value – and thus also the imputed rental value – differ. Property owners also enjoy tax advantages: for example, they can deduct mortgage interest or repair and maintenance costs from their taxes. Taxation of the imputed rental value can thus be seen as ‘compensation’ for these advantages.
What is to change?
Recently the Council of States approved the abolition of the imputed rental value by a narrow majority of 20 to 17. However, even among those in favour, there was disagreement in the Council about the simultaneous abolition of deductions. Critics argued that abolishing the imputed rental value without abolishing deductions would no longer be consistent with tax logic.
This would mean that owners of rented properties would have to pay tax on their income, but would no longer be able to claim deductions for their mortgage interest. This would put them at a disadvantage compared to owners who live in their own properties. Seen in this light, it would be a break with the above-mentioned ‘balance’. In addition, certain deductions can also serve as incentives, for example in the form of energy-saving and environmental protection deductions.
The reform proposal favoured by the Council of States now allows debt interest deductions, but only under certain conditions. In addition, the imputed rental value for second homes is to remain in place.
The Committee in favour of abolishing this tax considers the imputed rental value to be unfair: unearned income is taxed, making it an unfair tax on ‘fictitious income’. If the imputed rental value is abolished, interest on debt can only be deducted from taxes to a limited extent. The committee believes that this would eliminate a system that encourages people to take on debt. On the other hand, those who pay off their debts are currently penalised.
The committee against this motion argue that the tax losses would hit municipalities hard at an already difficult time. Either taxes would have to be raised or government services cut back. The Federal Tax Administration estimates the potential tax losses at CHF 1.8 billion. But the losses could fluctuate greatly depending on the reference interest rate used for mortgage interest rates. ‘The higher the interest rates, the lower the losses. And vice versa: the lower the interest rates, the higher the losses.’ This uncertainty makes the proposal even more problematic for municipalities. The president of the municipal association believes that less would be invested in property maintenance ‘because the deductions would no longer be allowed’. He fears that this would have a negative impact on local businesses.
The government and national parliament call for people to vote in favour of this motion.
The next referendum is about Digital Identity Cards.
An electronic identity card that can be used to identify oneself online to the authorities or a bank – that was the idea behind the e-ID three years ago. Opponents criticised the fact that commercial companies would issue the e-ID and operate the infrastructure – tasks that should be performed by the state. They therefore felt that privacy was not sufficiently protected. These arguments convinced a majority on 7 March 2021: the proposal was rejected by 64 per cent.
Conclusions were drawn from the defeat: instead of private companies, the federal government is now responsible. The new e-ID is to be issued by Fedpol (Federal Office of Police), while the Federal Office of Justice (FOJ) and the Federal Office of Information Technology (FOIT) are responsible for operating the infrastructure.
The e-ID is now based on the principles of self-sovereign identity (‘Self Sovereign Identity’). The idea behind this is that anyone who has an e-ID should retain control over their data. This provides better protection of privacy than traditional plastic identity cards. In future, anyone who has to present an e-ID will be able to determine which data is visible. For example, if you have to prove your age when buying alcoholic beverages, only confirmation that you are over 18 will be displayed. Your date of birth and name will remain hidden.
This referendum was put forward by people against the Digital ID card. The committee feels that privacy is an important part of a free society. However, in their opinion, the E-ID Act repeats the mistakes that caused it to fail in the 2021 referendum. The new law contributes to the misuse of sensitive personal data. The access options for private companies are disproportionate.
The government and national parliament call for people to vote in favour of this motion.
Locally the main vote is about: Green and Traffic Free Neighbourhoods
An initiative by the Young Greens aims to free four districts of Lucerne from traffic namely: Bruch, Hirschmatt, Neustadt and Kleinmatt. The conservatives think this is going too far.
On Winkelriedstrasse in the city of Lucerne, you can get a glimpse of what the Young Greens want to achieve with their initiative: bicycles have right of way on the road. Some of the parking spaces have been removed. Instead, the parking bays are now filled with boxes full of soil from which plants are growing. What we are seeing here is a trial run by the city of Lucerne. By 2040, no more greenhouse gases are to be emitted within the city limits. Among other things, the city wants to reduce the number of parking spaces and the volume of traffic. The Young Greens’ initiative calls for a comprehensive driving ban in four central districts of the city. Most of the parking spaces would be removed. In addition, some of the asphalt would be broken up and the areas subsequently planted with vegetation. In Lucerne’s city parliament, the Greens, the SP and part of the GLP support the Young Greens’ proposal.
For Moritz Falck, president of the Lucerne FDP, the Young Greens’ ideas go too far. In addition to the FDP, the Centre Party and the SVP are also part of the opposition committee. ‘The energy and climate strategy of the city of Lucerne is sufficient,’ he says. It should not be forgotten that over 10,000 people live in the four neighbourhoods. ‘If only basic service providers, tradespeople and people with special permits are allowed to drive into the neighbourhoods, that’s going too far.’ Residents also need to have enough parking spaces. Moritz Falck also expresses concerns about local businesses. A restaurant may benefit from quiet streets, ‘but customers need to be able to drive up to an orthopaedic surgeon’s or a furniture shop.’
The city recommends that people vote in favour of this initiative.
Researched from SRF and Luzerner Zeitung as well as the government sent referendum leaflets.
