Motion M 5/26 calls for a partial earmarking of property gains tax proceeds for the creation of affordable housing. Specifically, 20 percent of the proceeds are to be allocated to the municipalities in whose territory the taxable property gains were realized. However, the cantonal government is recommending that the cantonal council not declare the motion admissible.
Its reasoning touches on a critical issue in the canton’s housing policy. The government considers lump-sum funds with highly fluctuating revenues to be the wrong approach, because this would divert resources from the general state budget without allowing for their use to be prioritized according to local needs. Instead, it points to existing planning law instruments and locally developed measures for promoting affordable housing.
Tax Remains Primarily a Fiscal Instrument
In its response, the government notes that the real estate gains tax in the canton of Schwyz serves primarily fiscal purposes. Under current law, gains from the sale of real estate located in the canton or shares therein are subject to real estate gains tax; under the monistic system, this applies regardless of whether the property is part of private or business assets.
Housing policy remains the responsibility of the municipalities
The decision is relevant for municipalities and project developers because, for the time being, it does not result in an automatic inflow of funds from real estate sales to finance affordable housing. Anyone seeking to create more affordable housing in Schwyz must continue to rely on municipal planning, specific support measures, and political decisions, rather than on a distribution formula prescribed by the canton.
The cantonal council will now decide how to proceed. If the motion is declared admissible, the cantonal government would have to draft a bill or constitutional amendment within two years. However, the council may also reject the motion or convert it into a postulate.
