Tax on rental value
Tax on rental value
"I own the flat I live in. How does the so-called "rental value" tax work, and how is it calculated?"
Yves, Geneva
As a property owner, you are not only subject to wealth tax, but also to income tax.
Income tax is levied on all economic benefits received by the taxpayer, whether one-off or periodic, in cash or in kind. In the real estate sector, tax is calculated on the basis of the return on real estate assets. It is easy to see how owning a property can generate a certain amount of income from renting it out or usufructing it. However, the federal and cantonal tax authorities also levy a tax if the owner of a property reserves the right to use it. The tax authorities consider that the taxpayer gains an economic advantage by saving the amount of rent that he or she would have had to pay as a tenant. This income, known as the rental value, corresponds to the use value of the property calculated at market price. This involves comparing the property in use with other rented properties with similar characteristics. Making this comparison is not very difficult for the owner of a flat, but can be complicated if it involves a villa. Account will be taken of the living area, type of accommodation, furnishings (insulation, type of windows, number of bathrooms), age of the building, surrounding nuisances (airports, motorways), and the general location of the building, such as the amount of sunlight.
Useful information and documents, including the "questionnaire for determining rental value", are available at www.ge.ch/impôts.
So, as the owner of the flat in which you live, in addition to wealth tax, you must pay income tax calculated on the basis of the rental value of your flat. You must therefore attach to your tax return the questionnaire that you can complete directly online at the above address. The guide Rental Value Questionnaire 2009-2012, available on the above website, will help you to complete it properly.
