Facts
Based on the cantonal tax law, the Zurich Cantonal Government Council issued a new directive in August 1996 on the valuation of properties and the determination of imputed rental values. Niklaus Scherr and the Zurich Tenants' Association then filed a constitutional appeal with the request to revoke this directive.
The appellants complained of a violation of the principle of legal equality under Article 4 of the Federal Constitution, as the directive resulted in the imputed rental values being on average only around 60% of the market value and the asset tax values for single-family homes and condominiums also being only about 60% of the fair market value.
Considerations
The Federal Supreme Court partially upheld the appeals. It held that the contested provisions are unconstitutional insofar as they result in the imputed rental values being significantly lower than 60% of the market value and the asset tax values for properties being massively below the fair market value in a considerable number of cases.
In its reasoning, the Federal Supreme Court stated that according to its case law, the imputed rental value must be at least 60% of the market value in order to be compatible with the principle of legal equality. When determining the asset tax values, the principle of legal equality must also be observed, whereby the legislator may provide for different valuation methods, but these may not…