Facts
In the tax return for the federal direct tax 1991/92, the taxpayer C. claimed a deduction for the rent paid for the apartment he rented for private residential purposes. In compensation, he demanded that a (to be estimated by the tax authorities) amount be credited to him as an "imputed rental value".
The tax administration of the canton of Basel-Landschaft did not allow either a deduction for housing costs nor did it credit the "imputed rental value" of the apartment. By decision of May 6, 1994, the Tax Appeal Commission of the canton of Basel-Landschaft dismissed the taxpayer's appeal.
Against the decision of the Tax Appeal Commission of Basel-Landschaft of May 6, 1994, the taxpayer filed an administrative court appeal with the requests to grant a deduction for housing costs and to apply the market value principle in determining the imputed rental value.
Considerations
The Federal Supreme Court dismissed the appeal. It stated that according to Art. 23 of the Federal Council Decree on the Levying of a Federal Direct Tax (BdBSt), the rental of a dwelling cannot be deducted from the pure income. This regulation is also not unconstitutional.
The Federal Supreme Court explained that the taxation of the imputed rental value of the owner-occupied property or apartment precisely serves the constitutionally necessary compensation for legal equality between tenants and homeowners. Other solutions, such as the abolition of the taxation of the imputed rental value while simultaneously waiving the deduction of…