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  #141  
Old 13.09.2012, 15:53
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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the best example in which the EmW
it is not only the best example, it is probably the only relevant example. it clearly shows that it EmW makes sense as there is no common sense reason why a guy owning a house should derive a tax benefit from living in it compared to him living in an identical house and renting out his own home.

all the other 'examples' put forward introduce additional attributes not associated with owner-occupation. e.g. comparing someone owning a 1.2m home to someone who has no assets and rents - well, big surprise that someone who has 1.2m pays more tax than someone who has nothing. this is nothing to do with owner-occupation.

if you want to argue that rich people who save should be given tax breaks, then feel free to do so, but don't try to hide it under a false argument that owner-occupiers are unfairly penalised.
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  #142  
Old 13.09.2012, 16:24
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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let's say i own a house outright and the EmW is 2000 per month and this is the same as the market rental value.

if i live there. then i pay, say, 20% tax on the EmW and so pay 400 per month.

if i move out and rent another place for 2000 per month, and rent out my own house for 2000 per month, then again, i am taxed 400.

the EmW makes OO and renting out the place tax neutral.

similarly, if a renter without property instead invested in something which provides income, he could take this income from his asset and use it to pay the rent. if the asset produces an income of 2000, then this would put him in the same position as the OO, as after tax, it could contribute 1600 to rent so the renter needs to pay an additional 400, the same as the OO.
Thank you for at least explaining it in a way I can understand!

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There's nothing wrong about owning your own property, but there' nothing super-right about it either, at least nothing that would justify not paying taxes for it.
So tax me on the property, like you do with the alcohol, car or whatever. Taxing something that doesn't exist is not correct.


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a principle of taxation is that it is neutral. what you are advocating is a tax policy to encourage owner-occupancy over all other forms of accommodation. i see that as neither necessary, nor desirable.

maybe a fixed income investor would likewise argue that if he managed to invest so much in bonds that he can pay his rent from passive income, that he too should deserve additional tax breaks? why should property get special treatment over anything else you choose to spend your money on?
What? Taxing is not and probably has never been neutral. People get tax breaks for all kinds of things that others don't get.

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While I'd be happy for Emw to be abolished, I don't see why having it is a problem.

Or have I missed something?
I don't necessarily have a problem with the amount. I have a problem with the whole concept. And one should be careful of what you wish for because a property tax could potential be higher.

Last edited by miniMia; 13.09.2012 at 16:37.
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  #143  
Old 13.09.2012, 16:53
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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I don't necessarily have a problem with the amount. I have a problem with the whole concept. And one should be careful of what you wish for because a property tax could potential be higher.
i think the concept is a good one. i'd prefer that EmW is not taxed and that rental payments are deductible - but I think the situation in switzerland is the second best thing.

you could also have council tax (as in the UK) or property value tax.

i consider EmW superior because:

1. It provides neutrality to OO, renters and LLs and so does not distort the housing market
2. Rental value is easier to ascertain than property value (availability of comparables - my alternative of not taxing EmW and making rental payments deductible would eliminate the valuation problem completely)
3. Does not have the pro-cyclical problems of property value based tax
4. Is less volatile than property value based tax (if property values double, then you would have seen your tax double in the last few years). given the volatile macro-economic conditions, rental based valuation is likely to provide a much less volatile basis of taxation
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  #144  
Old 13.09.2012, 17:11
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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i think the concept is a good one. i'd prefer that EmW is not taxed and that rental payments are deductible - but I think the situation in switzerland is the second best thing.

you could also have council tax (as in the UK) or property value tax.

i consider EmW superior because:

1. It provides neutrality to OO, renters and LLs and so does not distort the housing market
2. Rental value is easier to ascertain than property value (availability of comparables - my alternative of not taxing EmW and making rental payments deductible would eliminate the valuation problem completely)
3. Does not have the pro-cyclical problems of property value based tax
4. Is less volatile than property value based tax (if property values double, then you would have seen your tax double in the last few years). given the volatile macro-economic conditions, rental based valuation is likely to provide a much less volatile basis of taxation
3&4 are patently untrue, my EMW has had three values in the last 5 years, hardly unvolatile. It has been revised upwards by 50% in that time reflecting rental income and property value increases.
For 2 the number of "comps" might be less for purchases but this doesn't stop the tax authority from being able to come up with a valuation figure for tax purposes almost annually.
1. What neutrality? It applies to LLs and OOs but not to renters so hardly neutral.
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  #145  
Old 13.09.2012, 17:16
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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And one should be careful of what you wish for because a property tax could potential be higher.
This is a very good point.

Eigenmietwert is an income tax, not a fixed tax. You pay more at the peak of your earning life, but at least those retired on small fixed pensions are not hurt as badly.

In many US states it's a fixed tax. The properties I'm looking at are ca 20-30,000+ per year in property tax. Folks who have lost their jobs and pensions, although they long ago paid off their mortgages in full, are now losing their homes because they are unable to pay the property tax.
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  #146  
Old 13.09.2012, 17:17
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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it is not only the best example, it is probably the only relevant example. it clearly shows that it EmW makes sense as there is no common sense reason why a guy owning a house should derive a tax benefit from living in it compared to him living in an identical house and renting out his own home.
Aaaargh. This is driving me nuts. In no way have you anywhere explained how an owner-occupier could get a tax benefit. At best you've shown that in some very specific scenarios his additional tax may be offset by relief elsewhere, or may be only equivalent to someone who had some extra investments, but nowhere have you even given an example that _claimed_ an actual tax benefit for an OO.
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  #147  
Old 13.09.2012, 17:34
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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Aaaargh. This is driving me nuts. In no way have you anywhere explained how an owner-occupier could get a tax benefit. At best you've shown that in some very specific scenarios his additional tax may be offset by relief elsewhere, or may be only equivalent to someone who had some extra investments, but nowhere have you even given an example that _claimed_ an actual tax benefit for an OO.
it's very simple: just take my example, and without tax on EmW, the homeowner living in his own home, would be 400 chfs a month better off than if he did not live in his home.
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  #148  
Old 13.09.2012, 17:38
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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it's very simple: just take my example, and without tax on EmW, the homeowner living in his own home, would be 400 chfs a month better off than if he did not live in his home.
Of course a homeowner, once the property is paid for, will pay less per year than a renter - that's the whole point, after all (OK, not the _whole_ point, but much of it). But this is simply a result of owning his own home, and has nothing whatsoever to do with any 'tax benefits'.
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  #149  
Old 13.09.2012, 17:40
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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3&4 are patently untrue, my EMW has had three values in the last 5 years
only 3 values in 5 years!? that's not volatile at all. house prices are changing every single day!
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  #150  
Old 13.09.2012, 17:41
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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it's very simple: just take my example, and without tax on EmW, the homeowner living in his own home, would be 400 chfs a month better off than if he did not live in his home.
Hmm, I am too confused with all the abbreviations and numbers etc! I didn't get that either that the homeowner was better off living in his own home. I thought in both cases he had to pay the 400 EmW...anyhow, been on the computer too long today, maybe I misread something!
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  #151  
Old 13.09.2012, 17:42
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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Of course a homeowner, once the property is paid for, will pay less per year than a renter - that's the whole point, after all (OK, not the _whole_ point, but much of it). But this is simply a result of owning his own home, and has nothing whatsoever to do with any 'tax benefits'.
please take the time to read my example carefully: the homeowner has owned the property in both cases. simply changing only whether he lives in it or not would be neutral with tax on EmW. without tax on EmW, he would be 400 chfs a month better off living in his own home. this is the tax advantage if you scrap tax on EmW.
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  #152  
Old 13.09.2012, 17:43
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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Hmm, I am too confused with all the abbreviations and numbers etc! I didn't get that either that the homeowner was better off living in his own home. I thought in both cases he had to pay the 400 EmW...anyhow, been on the computer too long today, maybe I misread something!
no, you do not pay tax on EmW if you rent out your property! maybe this is the source of confusion for some of you...
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  #153  
Old 13.09.2012, 19:06
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i think the concept is a good one. i'd prefer that EmW is not taxed and that rental payments are deductible - but I think the situation in switzerland is the second best thing.

you could also have council tax (as in the UK) or property value tax.

i consider EmW superior because:

1. It provides neutrality to OO, renters and LLs and so does not distort the housing market
2. Rental value is easier to ascertain than property value (availability of comparables - my alternative of not taxing EmW and making rental payments deductible would eliminate the valuation problem completely)
3. Does not have the pro-cyclical problems of property value based tax
4. Is less volatile than property value based tax (if property values double, then you would have seen your tax double in the last few years). given the volatile macro-economic conditions, rental based valuation is likely to provide a much less volatile basis of taxation
2. Is not true in a small town where there are no homes rented out to compare with ie a town where nobody would bother renting (no lake or public transport or schools nearby) but people buy homes, well, because they can afford it! In these towns the market price would be more readily available. The EmW is pure fiction in such towns, as the rental value is probably zero.
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  #154  
Old 13.09.2012, 19:19
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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Many older people do no longer have a mortgage they can off-set against tax.
In CH, that makes them millionaires (most of the time)

http://www.wuestundpartner.com/studi...nd_12_3_en.pdf

Its like the guy winning the lotto saying: "oh shit, now I have to pay taxes!"
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  #155  
Old 13.09.2012, 19:24
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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it's very simple: just take my example, and without tax on EmW, the homeowner living in his own home, would be 400 chfs a month better off than if he did not live in his home.
So?

People with kids pay less tax than I do no matter where they live.
People who can deduct transport costs & work clothes pay less tax than me.
People who put money in their pension funds pay less tax than me.
Home owners who do major repairs pay less tax than me.
People who live in the commune next door pay less tax than me.

I'm sure there are many more examples. That's life.
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  #156  
Old 13.09.2012, 19:26
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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In CH, that makes them millionaires (most of the time)

http://www.wuestundpartner.com/studi...nd_12_3_en.pdf

Its like the guy winning the lotto saying: "oh shit, now I have to pay taxes!"

I don't understand how working to own your own home can be compared to winning the lottery.

But that doesn't matter because you clearly have a serious problem with older people. I hope you live to be one yourself.
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  #157  
Old 13.09.2012, 19:50
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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So?

People with kids pay less tax than I do no matter where they live.
People who can deduct transport costs & work clothes pay less tax than me.
People who put money in their pension funds pay less tax than me.
Home owners who do major repairs pay less tax than me.
People who live in the commune next door pay less tax than me.

I'm sure there are many more examples. That's life.
i think you posted in the wrong thread or totally missed the point.
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  #158  
Old 13.09.2012, 19:52
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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i think you posted in the wrong thread or totally missed the point.
Not sure I missed the point. But it's possible.
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  #159  
Old 13.09.2012, 21:57
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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Many older people do no longer have a mortgage they can off-set against tax.
Thats unusual in CH as mortgages generally don't get paid off below 65%, I guess your talking about people who lived in the UK before!
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Old 13.09.2012, 22:02
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Re: Abolition of 'Eigenmietwert' in retirement: vote September 2012

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So?

People with kids pay less tax than I do no matter where they live.
People who can deduct transport costs & work clothes pay less tax than me.
People who put money in their pension funds pay less tax than me.
Home owners who do major repairs pay less tax than me.
People who live in the commune next door pay less tax than me.

I'm sure there are many more examples. That's life.
The easyiest way to reduce your tax bill is to work less, as the saving is exponential! Highly recomended
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