Conversion of an attic into living space - no deductibility of costs

Facts

A.A. and B.A. acquired a property in U. with a residential building and an attached barn in 1998. In 2004, they converted the barn into a living space with a kitchen. In 2010, they converted the attic into a bedroom with a dressing room and bathroom. The appellants claimed the planning and conversion costs totaling CHF 45,554 as maintenance costs. However, the tax authorities only allowed the flat-rate deduction for privately used properties in the amount of CHF 2,388.

Considerations

The Federal Court confirmed the decisions of the lower instances. The conversion of the attic into a bedroom with a dressing room and bathroom constitutes a change of use that is economically equivalent to new construction. Therefore, the…