Implementing provisions on the granting of a reduction on the rental value of owner-occupied property in hardship cases - Principle

1. Owners residing in their own single-family homes, condominium units, or apartments within multi-family buildings shall be granted a reasonable deduction if the imputed rental value is evidently disproportionate to the income and financial circumstances of the taxable person.

1. A deduction is granted if the imputed rental value determined according to the provisions of the implementing regulations is higher than one-third of the income available to the taxable person and the independently taxable persons belonging to their household (adult children, cohabiting partners) for covering living expenses, and if the taxable person would have to consistently draw on their assets to cover their living expenses.

1. The grant of the deduction is not applicable if the taxable wealth exceeds CHF 100,000 for single individuals and CHF 150,000 for other taxpayers, except when the taxable value of the permanently owner-occupied residential property at the place of residence exceeds 75 percent of the taxable value of all assets (assets before deduction of liabilities) according to the tax assessment.

1. All taxable income of the taxable person and the independently taxable persons belonging to their household are decisive.

2. Insofar as the income is only partially subject to tax liability, it is fully credited.

3. The imputed rental value or rental value of the owner-occupied property is not included in the income.

1. Medical, accident, and disability expenses may be deducted from income, insofar as they exceed the 5 percent deductible and therefore qualify the taxpayer for a deduction.

2. The following are not eligible for deduction

a. expenses related to the owner-occupied property;

b. all other tax-deductible amounts that may or may not have the character of income-producing expenses (such as professional expenses, interest on debts, special deductions for employment of both spouses, insurance premiums and interest from savings capital, charitable donations, among others).

1. If the taxable person is entitled to a deduction on the imputed rental value according to these implementing provisions, the maintenance allowance shall be calculated based on the full imputed rental value notwithstanding this deduction.

1. The taxable imputed rental value must, after deduction in cases of hardship, be at least 60 percent of the rental value (100 percent).

1. The deduction on the deemed rental value must be claimed by the taxable person.

2. The tax administration may inform the taxpayers about the deduction.