Facts
On 12 May 1997, the Grand Council of the Canton of Thurgau enacted a law that set the imputed rental value for owner-occupied residential property at 60% of the market rental value. Several complainants filed a constitutional appeal against this legislative amendment, arguing that the proposed deduction from the market rental value violated the principle of taxation according to economic capacity.Considerations
The Federal Court dismissed the appeal. It stated that the Tax Harmonization Act allows the cantonal legislature to set the taxable imputed rental value lower than the market rental value, as long as the lower limit of 60% of the market rental value is observed. The contested provision of the Thurgau Tax Act, which provides for a deduction of 40% from the market rental value, meets this requirement. While the law no longer leaves any leeway between the statutory upper limit and the constitutional lower limit, it can be applied in a constitutionally compliant manner if the authorities ensure that the imputed rental value is actually at least 60% of the market rental value. The authorities are free to choose a suitable estimation method to achieve this goal.
The Federal Court held that a certain schematization and lump-sum approach in tax law is unavoidable and permissible, as…