The rental value is established by the relevant cantonal tax authorities.
To assess this value, they take several criteria into account, such as :
- living area
- location
- year of construction
- type of building
Properties are valued locally and compared with similar properties, taking into account local rents.
In general, the rental value should represent at least 60% of the value that would be obtained if the property were let on the open market.
So how do you calculate the rental value of a property?
The calculation and amount of rental value vary considerably from canton to canton.
Different calculation methods and delays in adapting to current market conditions mean that rental values for two identical properties can differ considerably from one canton to another.
Let’s take the example of a rental value calculation in the canton of Vaud
A couple own a flat in Lausanne.
The living area represents a 90 square metre flat. It is located in a sought-after residential area, close to amenities and public transport. The building was constructed in 2008. It is a modern condominium.
The tax authorities in the canton of Vaud carry out an on-site valuation and compare it with similar properties in the same area.
The level of local rents is also taken into account.
For example, the rental value of the couple’s flat is set at CHF 2,200 per month.
Since the rental value rule must represent at least 60% of the available market value, the estimated potential rent for this flat is 3,520 Swiss francs per month.
Calculation: (2,200 x 60%) + 2,200
However, the percentage may vary depending on the canton and specific regulations (70% or 80%).
In addition, some tax authorities may apply a different percentage to determine the potential rent.
Finally, it should be noted that the potential rent may be influenced by other factors such as the state of the property market, rental demand in the region, the unique characteristics of the property, etc.
Do you have any questions about the rental value of a property? Would you like some advice?
Our advisers are at your disposal.
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