Real estate Zurich homeowners must expect significantly higher taxes
Anyone who owns a house or apartment in the canton of Zurich must be prepared for significantly higher tax bills from 2027. The reason: the canton is reassessing all properties due to the sharp rise in real estate prices. The government is now proposing to reintroduce a hardship rule.
17.09.2024, 14:03
17.09.2024, 16:47
SDA
"We won't win a bunch of flowers with this deal," said Zurich Finance Director Ernst Stocker (SVP) to the media on Tuesday afternoon. He also made no secret of the fact that he regrets that no decision has yet been made at federal level on the abolition of the imputed rental value.
However, Stocker emphasized that the Zurich directive on the valuation of properties and the imputed rental value had to be revised one way or another. After all, two court rulings stated that many properties in the canton were undervalued. The last property revaluation took place in 2009, since when prices have exploded. An expert report commissioned after the court rulings confirmed the findings.
Re-introduce hardship rule
As a result of the revaluation, homeowners in the canton of Zurich will have to pay significantly higher taxes in future. According to Stocker, property tax values will increase by an average of 48 percent. Furthermore, the imputed rental values for single-family homes will rise by an average of 11 percent, and for condominiums by an average of 10 percent. The increase will vary depending on the type of house and region, said Stocker.
For certain households, this increase is significant, said the finance director. Significantly more households would then probably face financial challenges. "For this reason, the cantonal government wants to reintroduce the hardship rule at cantonal level," said Stocker. This was only abolished in 2023. According to the finance director, nobody should have to leave their home because of the higher imputed rental value.
The hardship regulation is intended to serve as a transitional solution until a possible basic law at federal level comes into force. Stocker was unable to say how many people will be affected by the hardship quota: "Maybe two or three percent, but we don't know exactly." The home ownership rate in the canton of Zurich is just under 27 percent.
New valuations will come at the beginning of 2027
The new directive is due to come into force at the beginning of 2026. This means that taxable homeowners will receive the new property valuations by post at the beginning of 2027 together with their 2026 tax return. The municipal tax offices are responsible for the individual valuations, as Harry Müller from the cantonal tax office said.
Various location classes are decisive for the valuation. The land values and location classes were recalculated for each municipality in Zurich. For example, there are now nine instead of seven location classes for the city of Zurich and seven instead of five for Winterthur.
To calculate the imputed rental value of single-family houses and apartments, a derivation rate is now set for each municipality rather than a uniform one. This will allow the different regional developments to be taken into account, said Müller.
Additional revenue of 85 million francs
The new valuations will bring additional revenue into the canton's coffers. The cantonal tax office estimates that the canton will benefit from CHF 45 million in income tax and CHF 40 million in wealth tax. The same applies to the municipalities.
"We are not making these reassessments because of the additional revenue," Stocker asserted. Of course, 85 million francs is "a lot of money", he said. But he made the comparison: it corresponds to a good one percent of the canton of Zurich's annual tax revenue. The new directive was above all legally necessary.
